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REAL ESTATE - RETAIL - WORK, SHOP, EAT AND PLAY - SLOVAKS DOING IT ALL AT THEIR LOCAL SHOPPING CENTRES

Retail growth far from over

SHOPPING centres have become an essential part of life in Bratislava. The streets of the capital city's Old Town appear deserted, especially during wintertime, in comparison with the packed shopping centres where families tend to spend a large portion of their free time.

SHOPPING centres have become an essential part of life in Bratislava. The streets of the capital city's Old Town appear deserted, especially during wintertime, in comparison with the packed shopping centres where families tend to spend a large portion of their free time.

What is it that people find so attractive about these centres? The answer is that there is so much to do. You can go shopping, work out in a gym, see a film and finish the day with a good meal. Locating retail, entertainment and often office space in the same centre creates a win-win situation for the public as well as developers. Locating different types of premises in such centres has become more important over the years.

Igor Ballo, CEO of developer IPR Slovakia, said that the first shopping centres in Slovakia tended to be hypermarkets anchored by grocery chains in undeveloped locations outside city centres.

Although these sites were easier and quicker to plan and construct, they generally did not respect established shopping patterns within each town. The key was to deliver a centre quickly and get in before the competition.

According to Ballo, the next generation of shopping centres will be located closer to or even in city centres, near residential areas and established transport hubs.

"People are increasingly less willing to deal with long traffic jams and increased drive times to reach retail or office centres outside the downtown," Ballo said in an interview with The Slovak Spectator.

"In previous years, many people would say: "Well, I have a long drive ahead of me, but at least I will be able to find a place to park"."

Ballo predicts that if quality retail and office space with good services and parking becomes available in the centre of Bratislava, shoppers and office tenants will want to return to the downtown core, closer to their friends and their homes.

"That's why we are going to reconstruct the Bratislava main train station and turn it into a shopping centre, among other things," Ballo said.


Entertainment a must


Modern shopping centres are a relatively new phenomenon in Slovakia. The first to arrive was the Polus City Centre, opened in 2000 in Bratislava by the Canadian-Hungarian outfit TriGránit.

Petra Klasová Hándlová of TriGránit Management is now managing director of Polus, and was also present at the opening of Prague's first shopping centre in 1995.

"It's interesting that shopping centres in the US, which is the birthplace of the concept, as well as the first Prague shopping centre, do not have grocery hypermarkets. The reason is that shopping centres there are understood mainly as places for spending time, for entertainment," she said.

Klasová Hándlová said that while a shopping centre can exist without a grocery store, it cannot survive without entertainment and restaurant premises.

"Shopping centres have become part of people's leisure time. It's not just about commerce. Families should spend time together, and shopping centres realize that. Entertainment is a must in such spaces. For example, cinemas and excellent restaurants are now important parts of the centres," she said.


Offices and shops in synergy


Locating office space near or in a shopping centre is a common strategy. On the one hand, office buildings contain hundreds of people who get hungry three times a day and need various other services. As a result, retail space in such combined-use centres is expensive.

On the other hand, employers don't have to worry about their staff taking two-hour lunch breaks, as retail-administrative centres will often include dry cleaning and shoe repair services, a pharmacy and even a medical centre, Klasová Hándlová said.

Ballo of IPR Slovakia added: "Office tenants like to have their lunch breaks and entertain clients nearby without having to use their cars or go outside, especially in bad weather."

After tenants become used to high quality services they are often not willing to return to lower standard premises even if it would save money.

Apart from the fact that the offices provide retailers with a regular source of income, they can also share some costs, such as for parking, if office workers, retail staff and shoppers use the same lot.

"By having a proper mix of entertainment and top quality architecture, a retail centre can create a unique sense of place and become a destination where people want to work, shop, have fun, be entertained, and, increasingly, live nearby," Ballo said.


Management difficult but pays off


Having different types of premises in a single centre means that managing the various parts can be a challenge. And although a shopping centre might appear to be one unit, it may consist of several separate legal entities. The owner has to be flexible enough to finance, rent and/or sell all parts of the complex, requiring various types of agreement between the various legal entities and owners and administrators, Ballo said.

Klasová Hándlová emphasized that despite the complexity of managing such a project, it is to every centre's advantage to have different types of premises.

"It works just fine," she said. "It would be worse if it was not connected like that."


More to come


Although the number of shopping centres in Bratislava is growing and new projects are being introduced every year, Ballo of IPR believes the city still has room for more.

"If you compare the amount of prime, mixed-use shopping and commercial space in Bratislava to similar cities in Western Europe in terms of square metres, there is still a dramatic under-supply of such space in Bratislava.

"There is still demand for well-designed, well-located centres, and there will continue to be in the years to come. You have to look at these regional centres from the long-range point of view, say over 30 to 40 years, during which consumer purchasing power in Bratislava and Slovakia as a whole is sure to increase dramatically, he said."

Klasová Hándlová added: "I say that all competition is welcome. Competition forces you to improve your performance."

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