Poland and Romania accounted for four of the 10 biggest completed retail developments in the past three years, according to PropertyEU Research.
If we had to single out one group that has truly been on a rollercoaster ride since the outbreak of the global financial crisis, we would have to point the finger at the developers. As financing dried up and investors got cold feet, projects across Europe stranded or were abandoned altogether. The repercussions were felt in both Western and Eastern Europe and extended to Russia and Turkey. While both Western and Eastern Europe now appear to be back on track with institutional capital lining up for high-profile schemes in established cities, Russia and Turkey have again become no-go areas for many western investors following recent geopolitical developments.
In CEE, by contrast, South African capital has discovered the potential of the region and for the first time since PropertyEU launched its annual retail developers survey and ranking, New Europe Property Investments (NEPI) has secured a place in the top 5 this year based on the total volume of projects completed between 2014 and 2016.
Rise of Romania
The company, which is listed on both the Johannesburg and Bucharest stock exchanges, rose 12 places to 4th position this year after opening eight new schemes in Romania in the three-year period under review. In fact, one of its Romanian schemes – Mega Mall in Bucharest – ranks as the sixth-largest development completed in the past three years.
Romania remains a key focus for the company where it has another six projects in the pipeline in the coming years. Two other new projects are located in Serbia, in line with the company’s strategy to expand its portfolio beyond its main market and into other neighbouring countries including Slovakia, Croatia, the Czech Republic and other CEE countries which are recent or potential candidates for EU membership.
In the aftermath of the global financial crisis, Romania was struck off the list of both local and foreign developers, but in recent years its status has undergone a review and a number of players have returned to pick up from where they left off. A case in point is the ParkLake Plaza shopping centre in eastern Bucharest which opened its doors at the end of 2016.
Irish developer Caelum was one of the victims of the crisis which saw its joint venture with Portuguese developer Sonae Sierra to build the 70,000 m2 scheme scuppered after the company collapsed under the weight of its heavy debt burden. But in 2012 the pair went back to the drawing board and this time their partnership bore fruit – albeit with a slight delay of four months due to the fact that construction work was not ready on time.
Romania continues to rise in our retail developer rankings. The country figures in third spot this year in terms of the top 20 pipeline developments with Openville Timisoara, a 70,000 m2 retail scheme being developed by Iulius Management Center as part of a mixed-use development bringing together offices, a park and entertainment functions. Other CEE countries that figure in the top 20 pipeline developments include Bosnia and Herzegovina, Serbia and Slovakia. Poland also appears in the ranking with a development in Warsaw driven by French company Immochan, the development arm of retail chain Auchan.
Poland is the posterboy for cee
Another French player that has long been active in Poland is Apsys. The Paris-based company ranks second this year in our overview of the biggest schemes completed in the last three years with its 98,000 m2 Posnania centre in Poznan (pictured). Another large scheme that likewise came on stream in 2016 in a regional Polish city was the Silesia City Center redevelopment in Katowice, a project of Hamburg-based ECE.
Thanks to players like ECE, Poland has become the posterboy for the growing maturity of the region. Apysys was a pioneer but is by no means the only western developer that has become comfortable building new schemes in the country’s regional cities. ECE, for example, also brought a project in Poznan on stream last year. Overall, ECE completed just under 400,000 m2 of retail projects in the period under review, propelling it to first position in this year’s line-up from third place last year.
ECE is also active in several other countries in the CEE region including the Czech Republic where it operates three malls in total and Slovakia where it owns and manages one. It also operates five retail schemes in Hungary and one in Bulgaria.
By contrast, the number two in our ranking – Paris-listed Unibail-Rodamco – has a much smaller focus on the CEE region. None of the projects that it completed between 2014-16 are located in any of the CEE countries. That said, it is working on a number of new schemes and extensions in Poland, the Czech Republic and Slovakia.
In Wroclaw, it is currently putting the finishing touches to a 65,000 m2 scheme which is due to open its doors later this year and it is also working on its new 55,000 m2 Bubny shopping centre in Prague. The new mall is due to open its doors in 2021, but elsewhere in the Czech capital it is working on an extension of an existing scheme – Centrum Chodov – which is set to be completed in the course of this year.
