Retailparks in CEE: successful endeavour or stopgap?

Because the large cities are already swamped with shopping malls the retail parks in CEE are on the rise. However, the expansion has been slowed down noticeably by the economic crisis. But in the medium term the potential is enormous. So far only a quarter of the sales area potential has been utilised.

But already it is difficult for the very large retail parks (GLA over 30000sqm) to find a suitable spot. For medium or smaller sized parks the coming years will show many new projects. One reason is that the investment volume for a retail park of the same size is much lower than for a fully blown shopping mall. Therefore financing is much easier and the risks involved for the developer, banks, investors and tenants are manageable.

The future determining criteria for success will be how well the project adapts to the local customers’ needs. Many existing units show technical weaknesses: bad location, wrong branch mix and bland implementation and support. Sustainability in the sense of long-lasting success in this asset class will be the crucial factor for the future.

Quick and dirty construction, renting and selling will no longer be possible. However, the opportunities vary greatly by country and they have to be sought out and verified (!) carefully.