Encouraging economic and market conditions bode well for shopping centre developers and retailers as they gear up for RECon Europe. The event, formerly known as Retail Connections, takes place March 22 in London.
“Low interest rates and the sheer weight of capital bearing down on European real estate mean that many investors remain positive, despite concerns over geopolitical issues such as immigration and terrorism,” said Yvonne Court, partner and head of International Consultancy for EMEA Cross Border Retail & Leisure at Cushman & Wakefield in London.
Investor and retailer confidence is demonstrated by such new projects as the 100,000-square-metre Posnania mall that opened in Poznan, Poland in October. Developed by Apsys, the centre has 300 stores, plus a wide assortment of entertainment and restaurants.
This is also a time of challenge, however, Court says, noting that the industry is coming to grips with the changing needs of tenants and shoppers, disruptive technologies, and a variety of social changes.
One key theme is customer convenience. Media-Saturn Holding Co., the parent company of Media Markt, Saturn, and Redcoon, three of Europe’s largest electronics and white goods retailers, is focused on opening smaller units that are easier to reach for more customers. The new format is roughly 1,000 square meters versus the 2,500-square-metre standard store.
“Despite ecommerce, proximity to the customer is key,” explained Edgar Breed, Media-Saturn’s head of real estate for Northern Europe. “We know that on a group level, of the people who buy from us online, approximately 50 percent of the people come to our store to pick up the goods that they have ordered online.”
Food and beverage-related companies face a busy year ahead as F&B offerings become a more central part of shopping centres and high streets. Patafritas, a Greek restaurant group, has expansion plans. Right now, the group is looking for more opportunities in the U.K. as well as the Netherlands, Germany, and Poland, says Babis Sgouridis, its marketing and business development manager. Besides Patafritas, its other brands include Olive Oil & Oregano Mediterranean Grill, a casual dining restaurant.
Patafritas’ key challenge, says Sgouridis, is finding the right local partners. “It’s not an easy job,” he said. “You have to feel how to grill.”
The Jamie Oliver Restaurant Group is also opening eight additional Jamie’s Italian outlets, five in high street locations in Shanghai, Reykjavik, Oslo, Lisbon and Shanghai, and three in the Oslo, Nice, and Vienna airports. Jamie’s Deli concept, tested last year at the Oslo Airport, will also expand this year, in the Nice, Vienna, Schiphol (Amsterdam) and Dusseldorf airports.
“In terms of further expansion we’re still very keen on finding partners in new territories with our focus being on Spain, Poland, Sweden, Denmark, Mexico and New Zealand; all really excite us with great long term potential,” said Nick Clarke, international business development manager for Jamie Oliver Restaurant Group.
Court sees a major shift underway for retail real estate towards enhanced service. “Twenty years ago, we had tenants,” she said. “Now we have customers. In 20 years’ time, we’ll have guests.”