Outdated Belgian malls fail to provide 'an experience'

Brussels' aging shopping centres are in danger of failing to meet growing consumer demand for an 'experience' as owners have no incentive to undertake refurbishment, PropertyEU's Investment Briefing on the Benelux markets heard this week.

Peter Wilhelm, CEO of Brussels-based mixed-use developer Wilhelm & Co, told the briefing that shopping centres have proved to be one of the most resilient property segments in the current downturn. However, consumers require additional reasons - an 'experience' - to come to a shopping centre rather than to purchase items online.

Offering this experience takes money and imaginative, new concepts involving a mix of functions. The trend, the investment briefing heard, has reached the Netherlands and other countries, but has yet to become firmly established in Belgium.

'Take a city like Brussels where most of the shopping centres are between 25 and 35 years old. The problem is there is no incentive to refurbish because there is no other competition and the retailers continue to pay their rent, Wilhelm said. 'It is not viable to have such old shopping centres, yet there have been very few refurbishments. In a few cases there have been refurbishments that were done very well. In other cases I have turned up at the opening and wondered whether they had started the work yet because there was hardly any change at all.'

Another problem is that the common Belgian form of acquiring a stake in a asset by buying certificates has no provision for refurbishment.

Wilhelm & Co by contrast has spent a lot of money to offer an 'experience' at its retail-anchored Médiacité scheme in Liège,Totalling 160,000 m² on a former brownfield site of 6.5 hectares, the project combines a two-storey shopping centre with leisure, cultural and economic activities centred around a media cluster.

'One way to measure whether you are successful is to look at how long people spend in your project. We have established that people are staying more than two hours at a time at Médiacité, which means they come for more than buying carrots and a pair of socks. They want to stay as they are enjoying themselves and this is one of the most important criteria for success today,' Wilhelm said.

Fellow panellist Heino Vink of CEO of Multi Development which is the largest European developer of retail-led mixed-use projects, said active management of shopping centres - a service which both Multi and Wilhelm & Co provide - is becoming increasingly important. 'A shopping centre is not just a pile of bricks or lots of steel; it is a living entity and you need to feed it and take care of it. Managing and keeping a centre lively will remain one of crucial factors in maintaining the value of a retail mall in coming years.'

See more news from the Benelux Investment Briefing in the June edition of PropertyEU Magazine. Click on the link below to subscribe: