Stuart Rough, Chairman of global architecture, urbanism and design practice Broadway Malyan, and designer of award-winning retail projects including the Forum Coimbra Shopping Centre, said:
“The rise-and-rise of internet shopping will continue to be a key challenge facing retail property professionals in 2014, requiring physical operators to innovate and get creative in order to survive in an increasingly virtual world.
“Globally, we will continue to see a lot of innovation coming from emerging Asian retailers – and not just in China – with fresh, young and trendy brands, including value-led and off-price operators, appearing in more malls – and the approach being increasingly transported into central Europe.
“Expect the repositioning of existing centres to continue apace, with projects key to the future success of centres and their ability to attract increasingly fashion-conscious shoppers. Also expect the future-proofing of malls, in terms of building in additional flexibility to accommodate wider, non-core retail uses, and to create clear and strong differentiated propositions in crowded markets.
“In this context, we predict that consumers will increasingly want to visit the best possible retailers in a single trip – and if that means travelling further for a better shopping experience then modern consumers will be increasingly willing to do it. The result will be the continued and growing separation between the retail markets in the major European cities and the rest.
“In Poland, for example, second and third tier cities – sometimes called ‘white spots’ on the Polish retail map – are proving challenging to retail developers. They are finding that rental levels in these locations are not high enough to justify viable developments. By contrast major destinations such as Warsaw are surging ahead.
“With that in mind, and funding still being hard to come by, the owners of local and smaller-scale malls and retail parks will have to continue to think creatively in order to stay relevant, fresh and retain their customers. Many will continue to modernise their existing centres with repositioning and extensions, and this is especially the case in locations where infrastructure improvements are making access to these existing centres much easier.
“Where demand is stronger – the affluent suburbs of major cities being a good example – intermediate district centre malls and retail parks are worth watching in 2014. With mega-mall development still looking overly ambitious in the current market, much of new retail and leisure development will be in smaller neighbourhood malls and retail parks. We predict these smaller centres will be a growth opportunity and a trend that will continue during 2014.
“Planning systems will continue to present challenges for developers, including in the CEE region, however discussions are likely to continue in many Eastern European countries on how best to improve planning and support economic growth.
“However, changes in policy will take time and looking forward to 2014 we don’t expect to see any significant improvements that will impact on the market – therefore the challenges of navigating planning systems will remain a key issue in 2014.
“To sum up, in 2014 I expect the European retail property market to be characterised by the continued repositioning of existing centres and extensions to the most successful malls, amid a continued polarisation of the major cities from the rest – and, based on our current project experience, an increasing confidence returning to markets such as Romania.”
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