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.
CBRE has helped a private Austrian group dispose of the Prague 13 office project Metronom. The 34,000 sqm office project has been waiting to happen for at least a decade, but somehow never got built. That’s surprising, on the face of it, considering it sits right on top of the Nove Butovice metro station and across from a shopping mall (granted, not exactly the most successful one ever).
The owners, originally connected in some fashion with Doughty Hanson (which also used to own the Nove Butovice Business Park) seem to have decided the current development environment didn’t suit them and sold it to a company (i.e. HB Reavis) better suited to the times. Originally, the project was being sold along with a 20,000 sqm residential component, but the owners were advised to split the plot into two separate investment packages to increase the final price (and probably its sell-ability). The residential portion could end up being sold soon as well, as it happens.
“I wouldn’t say it’s the best time to sell such projects,” says one market observer. “But it’s a good time to buy. A lot of companies are coming under pressure from the banks, so they have to sell. They’re not selling for the price they wanted to achieve, but the price that the market is telling them.”
This should be music to the ears of agents everywhere, but they’re hoping someone will turn up the volume a bit higher…
CBRE has named Tomas Hegedus the new managing director of its Slovak office, after Joerg Kreindl was made Head of Office Agency and Tenant Representation for Central and Eastern Europe (CEE). Tomas has served as the general director of PHVH Solutions since 2004. Joerg Kreindl will now be based in Warsaw, having served in the Bratislava office for six years.
With the holiday season almost upon us, charity initiatives will be hitting the road soon. The Polish office of CB Richard Ellis has thrown its hat into the ring early, with a month-long Movember drive during which the men of the office will grow moustaches. The idea is to support to families with children suffering from MPS (Mucopolisaccharidosis) and to raise awareness about the disease which affects the development of bones and affects the organs, senses and the brain. For more information (on the disease, and on how to give), click on the info brochure. (or click on the picture to see your favorite ‘stache up close…)
Great discussion at the CIJ Investment Roundtable in Hungary today at Bank Center. It certainly wasn’t all doom and gloom, but the panelists agreed that Hungary’s knack for attracting scary headlines isn’t helping matters.
On the positive side, strong projects continue to perform, providing a certain level of comfort to developers and investors who know they’re investing into projects with solid fundamentals. And if a certain trio of major transactions were to go through, which would silence the pessemists, at least for a time.
And investors continue to land at Budapest’s new airport in order to scout out the opportunities. Unfortunately, they’ve been running into increased resistance from banks to agree to financing of new transactions, to the point that some investors won’t begin due diligence until some level of credit agreements have been put in place. And clearly, the country is still in a tight spot, with the consumer spend continuing to be squeezed by unemployment and the Swiss franc mortgage mess.
There was an overall consensus that it would be helpful if there were a more active approach towards outside investors, be it from the state, the city or from the private sector.
We’ll be featuring excerpts from what was an open and frank debate about the state of the property market in the November issue of CIJ.
DTZ Echinox and Jones Lang LaSalle have been chosen to represent the Cocor Mall in lining up leases for the 10,000 sqm retail center. Cocor, a €24.5m investment, is located in central Bucharest and was reopened in 2010.
In office news, medical service center Medlife has rented 3,000 sqm from Rompetrol in a deal brokered by by CB Richard Ellis. The 10-storey building is located on Calea Victoriei in the center of the Romanian capital. Rompetrol, which has retained ownership of its old headquarters, has moved to the City Gate office building in a deal that was also brokered by CBRE.
Posted in Agency, deals, developers, office, retail, Romania
Tagged Bucharest, CBRE, Coro, DTZ, JLL, retail, Rompetrol
The consolidation bonanza continues, as CB Richard Ellis announces its purchase of property manager EMCM. The company gives CBRE coverage in the Czech Republic, Slovakia, Poland, Latva and Lithuania with a client list that includes Invesco, ING REIM and Carpathian.
Mike Strong, Chairman & CEO of CBRE in Europe, Middle East and Africa (EMEA), said: “We are continually enhancing the retail solutions we offer to clients across EMEA, with our established local market expertise linking to our wider global network in both traditional and emerging retail destinations.