The lack of high street retail in many Central and Eastern European cities was cited as an investment opportunity during PropertyEU's recent investment briefing in Warsaw.
The lack of high street retail in many Central and Eastern European cities was cited as an investment opportunity during PropertyEU's recent investment briefing in Warsaw.
City centre retail was singled out when a panel of real estate professionals was asked for their preferences on how to invest a notional €500 mln in CEE retail. The briefing was held at the ReDI retail trade fair in Warsaw.
MOKOTOWSKA
Sean Briggs, managing director of retail agency in Eastern Europe for Colliers International, said he would go for Poland and Romania, a large country and starting from a much lower base. 'Ideally I would go for trophy assets though I am afraid €500 mln is not enough,' he said.
High street retail would be an alternative, as unlike many big cities in Western Europe, people still tend to live in the centre of Polish cities. 'I have long felt that in the major cities in Poland there’s a real affinity with the city centres but historically all the development has been around them because of the ease of getting sites on the periphery. The more I look at city centres the more I see opportunities for buying up smaller properties.'
Briggs said Mokotowska was an example of a street that has become a destination for young Warsaw artists and high-end shops.
Looking to the upcoming generation was key, according to David Brodersen, senior vice president of portfolio management Europe at Heitman. 'It seems we all agree on high street. I would ask the group here to think about where their children are going to shop because it is not about us anymore. Really it is a question of looking at the demographics of the future.'
DEARTH OF SHOPPING CENTRES
Anna Duchnowska, director asset management at Invesco Real Estate, Poland, also nominated high street retail due to the lack of such locations, compared to cities in Western Europe.
Shopping centre development was another option. Earlier the briefing heard that Warsaw will need about 17 new shopping centres to meet the demand of the coming years. This supply gap would be interesting for an opportunistic investor, said Duchnowska. 'It may not be 17 but a number of new centres are required so if you have a joint venture partnership with an experienced developer and if there is a plot of land available in Warsaw this would definitely be something worth looking at.'
RETAIL AND LEISURE
'I would definitely go for Poland as it will remain the number one destination for the next 5-10 years subject to political stability,' said Elio Szmawonian, board member of developer Mayland Real Estate.
Szmawonian said he would invest in retail and leisure real estate. Poland was well-placed geographically, he said, and had plenty to offer in terms of tourism but this resource was being under-utilised. 'There's a huge potential - I would invest in those real estate products for which being a tourist destination and retail centre are the main activities.
Szmawonian agreed there would be a continuing need for new shopping centres in Warsaw, and therefore he would invest in first and second generation retail schemes that could fill this requirement after repositioning and remodelling.
He cited the Dom Mody Klif shopping centre as an example. 'When Arkadia and Zlote Tarasy came everyone said Klif would die. Yet, Klif has carved out a niche market position for itself, with a refurbishment as the final step, and it is still very much alive.'
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