ECONOMY

Great scope for shopping centers identified in the Greek market

Shopping centers have dominated the Greek market and the whole of Europe. The new malls have mushroomed in all European cities, and during 2006 and 2007 more than 14.8 million square meters of new shopping centers will open for European consumers, according to international consultancy company Jones Lang LaSalle. The greatest activity is recorded in southern Europe, since in Italy and Spain there are malls covering a total surface of 4 million sq.m. that are under construction and will begin operating in the next couple of years. In Central and Eastern Europe, figures are equally impressive: The new centers about to begin operation in Russia and Poland within the next two years are estimated by Jones Lang LaSalle at 1.8 million sq.m., while in Germany and the Netherlands this figure comes to 1 million sq.m. In the Greek market, figures are clearly smaller and in the next two years no more than 120,000 sq.m. of new shopping centers are expected, at least for the time being, not including discount stores or big box developments such as Ikea. A key role in the development of new shopping centers is seen to be provided by the tenders of Olympic properties, which seem to be the solution to the permanent problem of development companies: The securing of the appropriate plot or property at a normal cost. After the first three tenders for the post-Olympics use of installations, two new major malls have emerged, on Kifissias Avenue and in Galatsi, with a combined surface of 80,000 sq.m. «Regarding shopping centers, the Greek market clearly shows a considerable scope for development,» argues Dika Agapitidou, head of Athinaiki Economiki which represents Jones Lang LaSalle in Greece. «The main economic figures such as disposable income and employment justify this optimism, although the concentration of many projects in a limited area (Athens), may hide some risks due to the oversupply of commercial spaces,» she notes. There is no easy answer to the question of how many malls can coexist in Attica today: «The domestic market definitely shows some peculiarities as compared to the rest of Europe. In Athens we have many strong shopping markets, while the climate during most of the year works in their favor unlike in the rest of Europe, particularly in the north,» says Agapitidou. She further suggests that «this is a transitional phase for the retail market, which is dominated now by the presence of large developments and the arrival of major chains from abroad.» The presence in the Greek market of big retailing names, which besides shopping centers are involved in high-street stores, intensifies competition and this is expected to work in consumers’ favor. In the rest of Europe, however, most of the activity is covered by developments far from the city center, due to the lack of available plots and to town planning restrictions. In Central and Eastern European countries, such as the Czech Republic, Poland and Hungary, interest turns to smaller cities that have no shopping centers, since Prague, Warsaw and Budapest are showing signs of saturation. In the UK, France, Germany and Netherlands, development companies are turning to facelifts in major cities’ centers, with malls having a leading role in the general planning. On the other hand, in Spain the vast majority of shopping centers are developed in the suburbs of big cities. The transformation of malls across Europe is particularly interesting, especially concerning architectural innovations, space arrangements, the blending of uses and main leasers. During the 1990s, entertainment was the main vehicle for the creation of new destinations which could attract huge numbers of consumers. The same model was followed in the first major malls developed in Greece, including those currently under construction, with a cinema multiplex, bowling centers and bars. French shopping centers were the exception, relying mostly on supermarkets. Now this is apparently changing, with developers choosing more and better stores. There is a growing sense against the need for the creation of a «destination,» while several companies realize that adding entertainment does not guarantee the success of a shopping center.