Are the crowds any thinner in the shopping malls this year? Most would take that as a highly negative sign, but a more nuanced approach should take into account whether on-line retailing isn’t finally having an impact on how long you wait at the counter. Whatever the answer, a recent study by CBRE suggests that on-line retailing is definitely making itself felt in the product supply changing.
‘Online retailing is an established activity across much of Europe and expected to grow further over the next few years,” says Patrick Kurowski, Director of Industrial Department in CBRE. “It is already a significant driver of logistics market activity, and its future growth will introduce significant challenges and opportunities for the logistics networks needed to support it. This is not merely a case of increased demand for generic logistics space.”
There’s no question about it: technology is disruptive. And adapting to new shopping trends turns out to be just as important for trucking companies as it is for retailers, points out Kurowski. “It will also require the development of higher specification logistics buildings tailored specifically to the needs of online retailing, and capable of handling higher levels of mechanization and process complexity.”
Across Europe 40% of 16-65 year olds use the internet to shop and 47% browse for goods online. Both behaviors are significantly more prevalent in northern and western Europe (Sweden, Germany, UK and France) than they are in southern Europe and CEE.
Retailers expect the online proportion of their total sales to double from 5% to 10% over the next two years. While 70% currently regard themselves as primarily traditional “bricks and mortar” retailers most have begun the process of evolving into multichannel retailers, with 63% expecting to be fully-integrated multichannel retailers over the next two years.
Overall internet access in Europe has risen by nearly 400% since the year 2000, and credible estimates put the rate of future growth in online retailing in Europe at 12-15% per annum over the next five years.
MAPIC has begun in Cannes, and the French Riviera is on its best behavior weather-wise. Out of respect to those who aren’t here, we won’t go into the details. In fact, so far, it’s look like there may be quite a few no-shows. We’ll see how the final numbers turn out, and this European transport strike looks set to make life miserable for anyone travelling today. We’ll be tracking new developments on display here, along with catching up with some of the various outlet center developers and retailers we’ve noticed on display. Just a note: no CEE projects seem to have made it into the final voting for the awards, that are announced tomorrow. Updates to come.
Mint Investments has completed its purchase of Olomouc City in a transaction made possible by a forced auction, led by the Naxos auction agency. One of the conditions of the purchase was that the buyer pay for the asset within 30 days, and with this condition cleared, the transactions has been closed.
Mint Investments partner Sebastien Dejanovski said he’d been pleased his company had been able to pick up the shopping center at what he called an interesting price (CZK 373m/€15m). “At the moment, there are quality tenants in the center. What’s more, we’re certain Olomouc City has great potential for further development. However, for us, what’s crucial is that it fits in perfectly with our retail property portfolio.” The company owns Laugaricio in Trencin, OC Rynovka in Jablonec, Cestlice Retail Park, and its newest center, Breda & Weinstein, is about to open in Opava.
A couple of recent studies make for interesting reading (this from Hospodarske noviny), if you’re interested in the tourist sector. Foreign tourists used to come to the Czech Republic to fill their shopping bags with crystal, but those days are over. Where as in 2006, crystal made up 23%of all good bought by visitors, that figure has now fallen below 10%.
Instead, the interest in fashion has taken of, rising to more than 65%. “Foreigners have worked out that it if they get the VAT back, it pays to buy the luxury brands,” says Jiri Macas, director of Global Blue, which arranges VAT refunds.
Russians are the biggest buyers, in terms of volume (around CZK 20bn), but that’s primarily because they’re the biggest group of tourists. Contrary to popular belief, though, they’re not the biggest spenders, coughing up CZK 6,600 on an average visit. Thais, on the other hand, spend nearly CZK 16,000. Who knew?
So, we noticed an article on a Romanian site that claimed GTC was considering closing down some of its mall in Romania. That’s hardly unprecedented, when you think that Immofinanz is currently doing just that in Arad with one of the disasters it inherited from Immoeast when that company imploded (more on that in the Sept. issue of CIJ). But that’s not only a difficult process, time -consuming and sensitive, and it’s not really something one speculates idly about in an earnings report.
The news seemed to be related GTC’s release of financial data for the second quarter, in which it’s pretty up front about the fact that it’s rough in Romania at the moment (its portfolio there took a €14m valuation hit, apparently the victim of Romania’s it’d-be-funny-if-it-weren’t-so-serious political squabbles (hopefully over, now?) But closing malls seemed a bit extreme, and there wasn’t much hint of such a move when we last spoke with GTC.
So when we got through to them headquarters in Bucharest, they weren’t any too thrilled by what they called rumors, nor could they figure out where they were coming from (outside of the usual suspects). In any case, while admitting that times are indeed difficult in regional Romania, CEO Shimon Galon derided the reports, calling them nonsense and saying there are no plans to close anything.
Following a severe storm and what from pictures looks like at least localized flooding, there’s been a partial roof collapse at Galerie Gniezno. The building’s operator Apsys said that water had collected too quickly to allow drainage, leading to some portion of the roof caving in. The building was evacuated and has been closed to the public, with structural experts now in the process of determining the full extent of the damage. In a statement, Apsys says the building, which was opened in 2005, undergoes technical inspections twice a year, and is managed according to the requirements of Polish law. Something, however, must have gone amiss for such an even to take place, though there’s no way to even begin speculating what that might be without further information. Some initial images available here.
What’s most important, of course, is that at this point no one seems to have been hurt, but once again, a good deal of luck seems to have been involved. It would be naive to keep relying on good fortune, though, as supplies are notoriously limited.
Galeria Neptun, located in Stargard Gdanski, has secured the building permit it needs to move forward, meaning construction should begin in April. Completion of the 25,000 sqm GLA project is expected by spring of 2014. Cushman & Wakefield will be the exclusive leasing agency for the project. It’s also been retained to prepare needed zoning planning changes and the completion of a comprehensive building permit design.