ECONOMY

Developers help change the face of retail sector

Property development companies’ shift toward creating more modern commercial spaces is altering the picture of retailing at a fast pace. The total surface covered by shopping centers operating in Greece today is calculated by property services company Savills to be 400,000 square meters, showing a 26 percent yearly rise in 2004, although the ratio of 37 sq.m. per 1,000 inhabitants keeps Greece in last place in Europe. This may not be easy to change, but in the near future significant new developments covering more than 250,000 sq.m. will be added to the domestic commercial and recreational map, with Greek as well as multinational chains grabbing the lion’s share of demand for space in the new shopping centers. In the apparel sector, the Inditex group, spearheaded by the Zara brand, continues to expand and along with Vardas are the big guns behind several new commercial developments where they participate as «basic lessees.» In the furniture domain the successful entry – invasion for many – of Ikea into the Greek market is forcing the other players to revise their strategy as the Swedish chain intends to expand its presence in Athens with a second outlet, and later in Patras, Crete and Thessaly. Heavy demand for space is also noted in the electrical goods sector, as Dixons and Media Markt are striving to secure the few good spots that satisfy their requirements. The first Media Markt will open at Alimos, in southern Athens, according to sound sources, while the idea of participating in the shopping center at Maroussi is probably being abandoned. The cosmetics sector also has a significant share of demand for new space. It is a market with a particularly high growth rate, currently dominated by the Hondos Center and Beauty Shop chains. Also expanding is Sephora, a recent arrival in the market, while Douglas from Germany is showing its interest by testing the waters. A new arrival is expected in the supermarket domain, too, with the Plus chain of Germany’s Tengelmann group eyeing Greece after the success of rival Lidl. On the other hand, the market for factory outlets and shopping parks remains at an embryonic stage. The contacts that Britain’s McArthur Glenn had with REDS for the purchase of land at Yialou in eastern Attica did not bear fruit, so the British giant is still searching for a plot on which to create a discount outlet. Until then, Elmec Sport will remain the market leader, since, in addition to its outlet on Pireos Street, it is developing its second store, expected in early 2006, in the shopping park of the airport. That 130,000 sq.m. park hosts Ikea, Kotsovolos and Elmec Sport’s Factory Outlet; its composition will probably be finalized in June when Athens International Airport SA (AIA) will decide on offers for the park’s last tenant. Among the companies bidding are the GEK-Terna group as a constructor-developer, toy company Jumbo and the Praktiker chain, which is bolstering its position in the Greek market ahead of the likely entry of its main competitor in Europe, France’s Leroy Merlin. AIA has been allocated the Eleftherios Venizelos Airport’s land until 2026. In March, the company invited expressions of interest for proposals for the park’s last plot of 26,000 sq.m. About 12,000 sq.m. of that is to be built on. According to the terms of the invitation, the bidder to be chosen will complement the existing lessees, being of commercial or even recreational character, but large-scale apparel product outlets are excluded.