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Retail market shifts to regions

“After a certain period of damping, which lasted from approximately 2010 until 2012, investors again renewed activities in the retail development,” Peter Pohanka, head of retail leasing at CBRE Slovensko, told The Slovak Spectator. “During the previous year there were announced or started constructions of several shopping centres and some of them have been already opened.”

(Source: Courtesy of C&W)

“After a certain period of damping, which lasted from approximately 2010 until 2012, investors again renewed activities in the retail development,” Peter Pohanka, head of retail leasing at CBRE Slovensko, told The Slovak Spectator. “During the previous year there were announced or started constructions of several shopping centres and some of them have been already opened.”

Pohanka recalled then the first outlet centre in Slovakia, One Fashion Outlet in Voderady opened in October 2013 and a smaller combined project of a retail park, The Mall Trnava, opened in March 2014.
Lukáš Šarközi, consultant of retail leasing at Colliers International in Slovakia recalled the start of construction of a new retail project in Poprad while construction works on projects City Arena in Trnava and Dituria in Levice continue. The latter, with the opening planned for November 2014, is an example as to what direction the retail market in Slovakia will go.

“Retail projects in towns with a population below 40,000, to be successful, will have to offer a unique position in the town’s centre in combination with a low saturation of retail areas and an empty place on the map of the existing outlets in the case of key tenants,” said Šarközi.

Market watchers agree that the basic trend in Slovakia is the orientation of tenants on less saturated regional and even local markets. Pohanka uses H&M as an example, which will for the first time open its outlet in two towns with populations below 50,000: in Levice and Spišská Nová Ves.

Eurovea changed hands



Probably the biggest property deal ever in Slovakia on the retail property market was the acquisition of the shopping centre Eurovea in Bratislava by Slovak financier Peter Korbačka.

Peter Nitschneider, the head of the valuation and research department at JLL in Slovakia said when assessing the acquisition that the new owner obtained a quality product with great potential.

Korbačka, controlling less than 20 percent in J&T Real Estate, acquired Eurovea as a private person via his Cypriot company Trenesma Limited from the original owner, Irish Ballymore International, the TASR newswire reported. While the value of the transaction remained unannounced, there was speculation that it was as much as €500 million. Korbačka’s aim is to bring the shopping centre that now targets the upper middle class to a wider public.

New arrival

The opening of Bory Mall in November 2014, with a price tag exceeding €150 million and developed by the Penta investment group, is a highly anticipated event on the retail market. It will be a new addition to the already quite well saturated market in the capital, but built in a locality which so far lackes big shopping centre. It will be located between Bratislava’s boroughs Lamač and Devínska Nová Ves while in the area of over 54,000 square metres it will offer 200 shops, restaurants and cafés.

The shopping and entertainment centre will be part of a new Bratislava’s borough Bory, which had its construction delayed by the economic crisis.

“Also the expert public is waiting to see how the interest of clients will re-distribute between Bratislava’s shopping centres,” said Pohanka, adding that each shopping centre needs a certain period for stabilisation and reaching an optimal performance and visit rates, which can last even two years under current conditions.”

Along with Bory Mall, there is the expected completion of shopping centres in other parts of Slovakia, City Arena in Trnava and Forum Poprad later in 2015, which should become dominant centres in these cities, Cushman & Wakefield wrote in its retail Marketbeat Snapshots for the second quarter of 2014.

There is also an expected resurrection of the original €1 billion Pharos project of shops and offices near the Bratislava airport and the Avion shopping park. After re-drawing of the project and reduction of investments, there arrives the first company, Bauhaus DIY shop with goods for construction and garden, which launched construction of its 20,000-square metre shop in July. Other companies which plan to have their shops in Pharos are Decathlon, a chain of international sports brands, and the furniture store Sconto.

The probable date of construction of Business Park Pharos is given as 2014-2020 and costs are estimated at €236 million, the project website reads.

On the other hand, HB Reavis withdrew from the project to build Aupark in Trenčín and returned the land to the city. The main problem was the overly high price for building a roundabout to make the shopping centre properly accessible.

For more information about the Slovak business environment please see our Investment Advisory Guide.

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