Technology will continue to boost e-commerce and drive the transformation of shopping centres into logistics platforms, says Alexander Otto, CEO of ECE Projektmanagement.
Which trends and developments do you hope for most for your business in 2018?
I hope that consumers will continue to value the advantages of brick-and-mortar-shopping with its unique atmosphere, services, exciting food concepts, and individualised customer services. In addition, I would like to see some interesting centres or portfolios with value-add potential on the market to enable our fund (ECE European Prime Shopping Centre Fund) to further expand its business.
What do you fear most in the coming year?
I don’t have any fears as such. The growing impact of e-commerce is a continuing challenge for any physical retailer, of course. Political disruptions can also be dangerous. We are closely monitoring developments in Turkey, for example.
Will you be expanding or scaling down your business?
We will actively terminate some management contracts for very small centres that don’t fit in our quality portfolio. At the same time, our refurbishment business is booming: We have just launched our ‘At your Service’ initiative and will invest €160 mln in modernising and implementing services at approximately 60 centres in a first step. We will also expand our developments in the non-shopping sector, i.e. logistics centres, hotels, and office projects.
What is set to have the biggest impact on your business?
Technology, as it boosts e-commerce and supports omni-channel businesses at the same time. I strongly believe that shopping centres will be shopping and logistics platforms in the future and technology will drive this development now and in the years to come. With our ‘Digital Mall’ we are already testing a platform where customers can check the availability of the products on offer at a centre and reserve items which then can be tried on or simply collected at the mall.
What will trigger the next downturn in real estate?
Prices are extremely high at the moment with very few properties on sale at all, so when interest rates rise there might be a change when some players have to sell some of their assets. This is not necessarily a bad thing.
