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TABLE OF CONTENTS Editorial Regional Quotes

6 8

Regional Retail Development Caution for retail development and investment

Regional Retail Development Low level of new retail development

Regional Outlet Centres The next generation of outlet centres are coming

Poland Overview Poland’s retail sector is emerging from the crisis

Hungary Overview Developers have concerns over retail development

Czech/Slovakia Overview Czech and Slovak’s retail seen as consolidated

Regional CEE Investment Awards Region’s investment and associated sectors celebrated at annual CEE Investment Awards

Regional CEE Investment Awards Region’s investment markets are in good shape

Regional CEE Retail Awards Nominations are now open for the 14th annual CEE Retail Awards & Marketplace

Retail Guide 2021

PAGE 10 Caution for retail development and investment

Although the retail sector is expected to make a significant comeback from the lockdown, it is still faced by the additional longer-term challenge of the growing use of e-commerce and a preference for purchasing from home, which in turn has been accelerated by the coronavirus pandemic. Developers, shopping centre owners and retailers are now striving to adapt their projects and retail offerings to quickly meet the changing demands of tenants and consumers.

The next generation of outlet centres are coming Fashion outlet developers are bringing a new standard to the region’s outlet market. The post-pandemic period coupled with the growing importance of entertainment, food, digitization and services has created new impulses and opportunities for the outlet sector. Nowadays, modern outlet shopping experiences are not only a place to get good bargains, but they are also destinations for quality time, and now need to offer upmarket architecture as a magnet for residents and tourists.

Poland’s retail sector is emerging from the crisis Retail in Poland recovered noticeably in the second and third quarters of 2021. This sharp rise is primarily attributable to sentiment indicators. Both consumer sentiment and retail sentiment increased over the year. The labour market and retail sales also continue to provide significant support due to their above-average levels. The encouraging news is that, compared with the corresponding period of the previous year, the country is on the up, with some of the strongest gains recorded in the region.

Developers have concerns over retail development Retail development in Hungary has been slow in recent years as developers have had concerns over the level of consumer spending following the financial crisis. Further, stringent planning regulations concerning shopping centre development and subsequently the impact of Covid-19 and the subsequent lockdown and the rise of online retail and its negative impact on demand and footfall in bricks & mortar retail has also put pressure on the sector. However, reports suggest, demand, and sales volumes are rising with consumer confidence returning to pre-pandemic levels.

Editorial Gary J. Morrell The CEE retail markets are facing challenges concerning the longer-term viability of existing assets and proposed new developments in a post-pandemic environment as e-commerce-use has been increasing in the region, where consumers have traditionally had a preference for the physical shopping experience in a brick and mortar environment. This is despite remaining health concerns over pandemic-related issues in public shopping areas and the newly discovered convenience of online shopping by many consumers, as they can engage directly with retailers, who are offering improved online services. In the current pandemic impacted market environment, banks appear to be unwilling to provide finance for shopping centre projects on favourable terms and concerning an exit strategy, many investors have a wait-and-see attitude towards retail assets as logistics and residential are the new investment sectors of choice for a large amount of domestic and international capital looking for a home. On their part, many retail centre owners are similarly taking a wait-and-see approach, looking for more certainty in the retail markets. In reaction to these new and changing consumer practices, the widely held view is that retail scheme owners and potential developers will have to adapt to the developing expectations of tenants and consumers. This is about design, tenant mix, leisure and R&B component, sustainability requirements, anti-virus measures, location and accessibility of retail centres from residential areas, to be viable and successful in the long term and have the option of an exit strategy. In this way, developers are marketing their projects as a new generation of shopping centres and owners of older retail schemes are undertaking redevelopment, renovation and extension of their projects to adapt to developing expectations from tenants and consumers, sometimes renaming and rebranding the centres. About planning, developers now, even more, need to find a suitably-sized development site at a transport hub with direct and easy access to the complex from urban areas. An increasingly attractive option is for the retail element to be part of a mixed-use project with office, service, hotel or residential elements. Therefore the different sectoral components have a mutual benefit with for example office staff and residents utilising the retail, services and leisure services of a project. This also adheres to sustainability requirements that developments need to contribute to the infrastructure of the surrounding area. The future of the retail sector remains uncertain, although consumers will continue to do their shopping or utilise services in bricks and mortar centres, whether for basic food shopping or a more leisure-oriented shopping experience. The challenge for retail owners and developers is to adapt their offers to the changing retail environment.

Central & Eastern Europe Russia - CIS Retail Guide Volume 41, Number 1, November 2021 Publishing House Kitbridge Media Sp zo.o. Kaleńska 5, 04-367 Warsaw, Poland Publisher Craig Smith craig@europaproperty.com +48 577 100 620 Editorial Director Winston Norman winston@europaproperty.com +48 506 535 293 Editor Gary J. Morrell gary@europaproperty.com +36 703 199 068 Journalists Gary J. Morrell Winston Norman Elie Issa Alex Webber Ewan Jones Poland Country Manager Sylwia Gajda sales@europaproperty.com +48 501 091 751 Hungary Country Manager Gary J. Morrell gary@europaproperty.com +36 703 199 068 Romania Country Manager craig@europaproperty.com Administration admin@europaproperty.com Subscription subscription@europaproperty.com Art Director Daniel Zbroszczyk graphic@europaproperty.com

Retail Guide 2021

Regional

Quotes Barbara Horatz

Partner | Marketing & Retail, TORG International The face of retail has changed in the past 18 months without comparison, we all agree. What was an undercurrent before has evolved exponentially - more than one fifth of all retail purchases are today via the internet, retail in the high street has been hard hit, millennials are used to order, return and re-order online. And so on and so forth. In our societies values have changed. The pandemic has elated the importance of togetherness, social communities and interaction. We are concerned with the future of our planet, what we as a society, as individuals and as responsible companies and entrepreneurs can do to contribute to our world of tomorrow. However, the need for human beings to socialize and to step out of our bubble is a fundamental one. Retail destinations will have to change their face forever. They have to be exciting and entertaining; they have to make you feel good, invite you to dine and wine, they need to go way beyond shopping.

Pepijn Morshuis CEO, Trei Real Estate

The pandemic has barely slowed our activities, and the same is true for demand on the side of tenants and shoppers. We have also realised that the need for modern retail premises in small and mid-size towns is larger than we assumed when we launched our activities. This goes to show that demand for retail parks remains strong in Poland. This was confirmed by our market analysis of 2021, which we compiled in collaboration with JLL for the second consecutive time. 2021 may well become a banner year for Poland’s retail sector, with 209,000 sqm of leasing area in new retail parks completed. We will soon achieve the objective of holding 50 Vendo Parks in our proprietary portfolio but see potential for further developments in Poland. The newly announced venture with Patron Capital will allow us to step up the pace of expanding and scaling our business.

James Turner

Group Managing Director, Sierra Balmain Physical retail has always evolved. Technology and the pandemic has accelerated this process, but we draw comfort in a central fact; technology changes how we do things but not what we do. We have more choice about when and where we want goods and services and this is the way we look at things. As Sierra Balmain we have long seen our role extending beyond pure shopping centre (though it is at our core) but rather as urban space creators and managers. Retail, culture, workspace, logistics, leisure, entertainment and lifestyle are all elements that coexist in our everyday lives and should be reflected in our urban environments. The skill though isn’t just to “plonk’ these elements together and tick the boxes, but it is in how the ecosystem is managed once it has been designed. This involves a wide range of skills from innovative research to broad use and application of technology. It goes without saying, but a heavy dose of passion is also required.

Last Mile Guide 2021

Quotes

Regional

Dominik Leszczyński CEO, DL Invest Group

Recently, we finalised the sale of the DL City shopping centre in Poland. Although, we can’t disclose the value of the transaction, we can say that the return on equity of the transaction is 253 percent and the return on the investment comes to as much as 63 percent. This transaction represents confirmation of the still dormant potential in the retail property market. And I don’t just mean retail parks, which have been a consistently desirable asset class since the outbreak of the pandemic (and this popularity, in my opinion, will continue to grow), but also shopping centres, whose star has waned a little in recent months. We believe (and our faith has been confirmed by DL City’s buyer) that well-managed and well-tailored projects are still attractive assets in terms of investment opportunities. In the following months we expect banks to be cautious and selective in financing projects involving the retail market, however, we do see signs of recovery and increased interest in financing and refinancing of projects and a return to normality in the medium term.

Márk Balástyai

Project Director of Etele Plaza, Futureal Due to the pandemic, digitalisation and therefore the growth of the e-commerce sector has accelerated over the last 1,5 years but it doesn’t pose a threat to offline retail as the market pie is growing as well. Offline shopping is still relevant, investors believe in this sector. Futureal’s Etele Plaza is a good example as the occupancy rate reached over 90 percent by the opening of the shopping centre despite the Covid-19 situation. Offline and online shopping will strengthen each other but the market players have to focus on customer experience, and they need to align their services to the shifting demands to keep and increase their competitiveness. The €300 million Etele Plaza was designed to be the first smart plaza in Hungary providing a personalised shopping experience through its proprietary mobile app and cloud-based services. It also introduced a ground-breaking Hungarian digital invention to help the blind and visually impaired.

Peter Píš

Director of Commercial Real Estate, JTRE

The fundamentals of shopping centre development have always been about the shopping and lifestyle experience repeatedly attracting lots of shoppers and visitors; and, consequently, throughout the years of retail development, we have witnessed the development of shopping centres across different city locations with a wide range of positioning characteristics. However, not all of these shopping centres became successful enough before the pandemic and therefore we would be naive to expect that a return for these centres to a relatively new normal will be feasible after the pandemic has gone. Mobility is critical! The return from the home office to work is critical! Mobility stimulates the footfall traffic and hence demand for apparel, cosmetics, food & beverage, and services etc. Yes, the online sales increased, but the increase is limited as it is linked to the brick-and-mortar experience and both channels correlate with each other. I think that the worst is behind us when it comes to the pandemic, but other issues such as inflation, and supply chain problems will need to be addressed.

Retail Guide 2021

Regional

Retail Development

Colosseum Mall in Bucharest

Caution for retail development and investment Gary J. Morrell Although the retail sector is expected to make a significant comeback from the lockdown, it is still faced by the additional longer-term challenge of the growing use of e-commerce and a preference for purchasing from home, which in turn has been accelerated by the coronavirus pandemic. Developers, shopping centre owners and retailers are now striving to adapt their projects and retail offerings to quickly meet the changing demands of tenants and consumers.

Despite the challenges to bricks and mortar shopping, there is little possibility of oversupply of shopping centres as new development has been restrained in many parts of the CEE region in recent years. Although there has been a step up in the number of customers shopping online and the penetration of e-commerce across Europe, according to Savills, the penetration of e-commerce in the Central European region is lower, indicating that consumers in Central and Eastern Europe still like the physical ex-

Retail Guide 2021

perience of shopping in a store, despite concerns over pandemic related safety issues. “According to external sources, Hungary has a 10 percent share of e-commerce in total retail sales. This is clearly at the bottom of the European league table,” commented Gábor Borbély, head of business development & research at CBRE Hungary. “In the CEE region the Czech Republic is the most advanced with a 25 percent share. We expect this gap to remain stable, although the share of online activity will grow rapidly

in Central Europe (by circa 5 percent in five years). Western Europe is a mix, as the UK, Netherlands and the Nordics have a higher share of online than Austria and Southern Europe, which have lower penetration and less dynamic growth.” The statistics portal, Statista puts the share of e-commerce penetration in CEE retail as of 2020 at 10 percent for the Czech Republic, 8 percent for Slovakia, 7 percent for Romania, and 5 percent for Hungary and Poland respectively.

Retail Development “There is no clear figure for e-sales as a percentage of total retail sales, but we would estimate this at around 12-13 percent currently. While e-commerce has been growing sharply in Romania in recent years, it has done so alongside brick-and-mortar stores. So, while physical stores will for sure slow down, in the end, we do not think that brick-and-mortar will be in trouble down the line,” commented Simina Niculita, director of retail at Colliers Romania, on the market in Romania. According to market trends, the future of retail is migrating towards community centres, which are shopping centres providing retail, leisure, entertainment, culture and sports activities being in the close neighbourhood of residential and office complexes. “Retail, in general, is going through a dramatic change,” commented Erika Garbutt-Pál, head of retail, A&T services at CBRE Hungary. “We knew that these trends were developing, e-commerce was already happening before, but the growth in online sales and the changes accelerated with Covid. During the pandemic we have realised what is most important to us: freedom of movement and the time spent together with friends and family. Shopping centres need to capture these trends and provide activity possibilities, shopping and F&B for the whole family. Shopping centres will change and must change, but the biggest transformation must come from the retailer’s side. Brands are rethinking their traditional business models and retailers have to adapt their concepts according to customer demands.

We will see more of the combination of traditional retail, pick up points, special customer services etc., all in one unit.” Commenting on the relation between the retail and logistics sectors in Romania, Simina Niculita, said: “Logistics is changing in quite a few ways to meet changing demand amid the pandemic. Firstly, we are seeing schemes being developed to cater to the needs of e-commerce, which need quick and easy access to Bucharest to offer competitive delivery dates; this also includes fresh interest for last-mile schemes. Secondly, as modern retail has been expanding throughout the country, it too requires a suitable logistics network.” She continued: “Logistics is already the hottest sector in Romania (and many other parts of the world) judging by the growth rate it is seeing, with the stock increasing by at least 10 percent per year in recent times.

Regional

And given that Romania still has a modern industrial and logistics stock per capita of around one-third of Poland’s and one-quarter of the Czech Republic’s, for sure there will be much more investment pouring into this sector over the following decade.” In the investment market, Colliers estimate that the regional office sector achieved 36 percent of CEE (Poland, the Czech Republic, Hungary, Romania, Slovakia and Bulgaria) investment volume in the first three quarters of 2021. Industrial recorded 31 percent of the total volume and retail 16 percent, reflecting current sentiment to the two market sectors in CEE and wider European markets. Colliers recorded an average CEE 100 basis point inward movement of logistics assets with a 180 basis point inward movement for Poland. Industrial yields are in general the

CEE Yields Source: Colliers

Office Industrial Shopping Centres

Czech 4.25 Poland 4.7 Hungary 5.25

4.5 4.4 6

5.25 6.5 6.5

Point Centar Zagreb by Bluehouse Capital

Retail Guide 2021

Regional

Retail Development

second-lowest after office. At the same time, the retail sector stands in third place across the region. Retail transactions are still being concluded, for example in Zagreb Bluehouse Capital sold the 13,500 sqm Point Shopping Center. The complex has been operating successfully with long-term international and Croatian brands. Prime shopping centre yields for Zagreb are estimated at 7.25 percent. Concerning an exit strategy, investors and banks are reluctant to invest and finance retail projects. At the same time logistics has quickly become the sector of choice when it comes to investment strategies.

e-commerce has experienced a boom during the lockdown period which has proved to be sustainable in the longer term

SIMINA NICULITA

DIRECTOR OF RETAIL, COLLIERS ROMANIA

In terms of investing in shopping centres, there is quite a lot of interest, but rather in smaller schemes; we are seeing less interest from investors and banks for large dominant shopping centres. This does not mean that possibilities for the development of large schemes does not exist or would not fit in certain locations, quite the contrary, some towns in Romania would easily integrate a new major dominant scheme; rather it is just that these take longer to get off the ground in the current backdrop.

ARVI LUOMA

CO-FOUNDER AND CEO, BLACKBROOK

With e-commerce growing rapidly, there has been unprecedented demand for logistics. Considering the UK is approaching 30 percent e-commerce penetration and still has some way to go by most estimations, the fact that most of Europe is around 1015 percent illustrates how much growth is anticipated. This will require modern, sophisticated and ESG accredited supply chain infrastructure. From fulfilment centres to last-mile facilities, through to efficient convenience retail sites with a captured client base. Historically retailers dictated how, when and where. Today it’s the consumer who wants to get what they want, when they want and where they want. Modern supply chain infrastructure can deliver this. But space is limited in major urban conurbations and local authorities are hesitant to permit industrial space near residential areas. Similarly, regional locations simply do not have any supply as the demand has never existed. So, there is a vast supply-demand imbalance across the board that needs to be met, which at the same time has ESG impacts to consider. While there are challenges, technology is helping to shape what is possible, in terms of construction methods, operational efficiencies, optimisation and use of space, and carbon footprint reduction. This all bodes well for both the industry and the consumer. There is also substantial capital available for the sector so it will remain a rapid growth sector for the near term, and in the long term serve consumer demands. Retail is most certainly not dead, just how it is ultimately delivered has changed. There is a clear cross-over between bricks and mortar and e-commerce. There are synergies, and a balance will be struck. The winners will stand out with optimal use of real estate.

Retail Guide 2021

Regional

Retail Develompment

Etele Plaza is on a major Budapest residential and transportation location

Low level of new retail development Gary J. Morrell As the retail sector is faced by the challenge of e-commerce, accelerated by concerns regarding the coronavirus crisis, retail developers are looking to adapt existing projects to meet changing demand, therefore new projects are increasingly mixed-use developments at transportation hubs with direct access to residential areas or in central locations or retail parks serving regional cities.

“The retail sector has had to adapt to changing consumer habits and preferences with the threat of e-commerce concerning both new development and the redesign of existing retail projects,” said the architects Paulinyi & Partners, designers of the recently completed Etele Plaza shopping centre development in Budapest. Developed by Futureal and designed by Paulinyi & Partners architects, Etele Plaza is located at a transport hub at the Kelenföld railway station, metro line 4 and the approach section of the M1-M7 motorways. In addition to the retail and service elements, the wider complex includes the phased, 65,000 sqm Budapest One Business Park. According to Futureal, the complex, locat-

Retail Guide 2021

ed in the western Kelenföld district of Budapest, has 236,000 people within a 10-minute travelling distance and a further 165,000 passengers are estimated to travel through the transport hub daily. Tibor Tatár, CEO of Futureal, describes the project as “an environmentally friendly complex with a rentable area of 55,000 sqm that brings the next generation of plaza design to Hungary. Due to its excellent location as well as the unique digital, sustainability, health and safety features, there is a huge demand among retailers for the business opportunity Etele Plaza can offer to them.” The project follows the strategy of Futureal to develop what it defines as “innovative shopping centres with the cooperation of

the local government, investors and leading stakeholders in the property market.” A similar development of this ilk by the developer is the Corvin Promenada urban redevelopment project which delivered a shopping centre, street-front retail, services and restaurant space, offices and residential space all on a 22-hectare site. Corvin Promenade is an internationally recognized development project. It has won the European Commercial Property Award for the Best Mixed-Use Development of Europe and the FIABCI Hungary Real Estate Development Award. In 2014 the project received the Urban Land Institute’s (ULI) Global Award for Excellence. In Bratislava, the mixed-use Stanica Nivy by HB Reavis consists of 70,000 sqm of new

Retail Development shopping centre space. In addition, the mixed-use development consists of a 30,000 sqm office tower, the tallest office complex in Bratislava, supported by a bus terminal. In a neighbouring city centre project, the 25,000 sqm retail component of the 116,000 sqm phase 11 of the Danube river-front Eurovea complex by the Slovakian developer JTRE, the extension will extend the retail offer at the complex to around 85,000 sqm with a scheduled completion date of the end of 2022/2023. “JTRE will also continue shaping space for living, working, relaxing and having fun. The development of the contemporary Eurovea City waterfront district continues apace. This will be followed by Nové Lido, which will complement and expand Bratislava’s new centre on the Danube’s right bank,” said the developer, currently celebrating 25 years on the market. “Retail as part of mixed-use complexes depends on location, population, project size, design and other prerequisites for a successful mixed-use project. Continued development of residential housing, the rise of its prices and disappearing boundaries between private and social life, work and play will motivate developers to add value, sense of place and increased quality to their projects by moving towards a mixed-use model. Retail will play an integral part in such new mixed-use developments. Since traditional shopping centre developers and owners are facing big retail industry challenges and for years there has been a big discussion about shopping centre evolution, it may be tempting to state that, to make the project more viable and sustainable, it is expected that redevelopments or new shopping centre developments will consist more of the mixed-use elements,” commented Pavol Kopernický, head of retail agency at Cushman & Wakefield Slovakia. In the historic centre of Prague, the Savarin project by Crestyl Group consists of the reconstruction of seven buildings into 39,000 sqm of retail, 20,000 of office and 8,000 sqm restaurant space. The project on a 17-hectare site will connect Wenceslas Square with Na Příkopě and Jindřišská. The project is due for completion in 2022. Also, in the historic centre of Prague the Masarycka office, retail and hotel mixed-use project by Penta will include 10,000 sqm of retail, due to be delivered in early 2023. The project, designed by Zaha Hadid Architects studio, is located on a brownfield site adjacent to the Masaryk railway station and includes the renovation

of the railway station in conjunction with Czech Railways. In the Covid market environment, retail parks are regarded as being in a better market position than shopping centres, due to the tenant offering and physical structure concerning pandemic concerns. From a more positive perspective, the evidence is that there is potential for new shopping centre development, albeit with the developer recognising the need for new formats and changes in design about pandemic concerns and the developing expectations of consumers. Belgrade is seeing a strong pipeline of activity for retail parks with at least five projects under construction across Serbia. Immofinanz has announced several new retail parks in Serbian in secondary cities. IKEA has invested €50 million in the development of the 30,000 sqm Ava Shopping Park in the south-eastern outskirts of Belgrade adjacent to an existing IKEA store. “Since 2015, deliveries in the retail sector have averaged circa 160,000 sqm of new modern retail schemes per year and we see no change to this level over the coming years. What has changed is tenant mix, as we now see more of a focus on smaller and medium-sized towns (say, up to 100,000150,000 inhabitants) and retail parks, with fewer and fewer large schemes in the big cities. This is because the big towns are quite competitive and after testing the untapped towns, developers have got wind that these may be quite generous in terms of results. These developments are spread all over the country, there is no clear region coming out on top,” said Simina Niculita, director of retail

Regional

at Colliers Romania, on the development possibilities in the country. In Bucharest, the owners of the Colosseum Mall aim to extend the complex to around 75,000 sqm and adapt the complex to meet new market challenges. “The expansion of Colosseum Mall will breathe new life into the retail market in Bucharest, which has been facing challenges, in the unpredictable and long-term pandemic context. Even under these difficult circumstances, this form of offline retail demonstrates resilience and a high degree of adaptability,” commented Mihai Dinu, general manager of Colosseum Mall. Colosseum Mall’s expansion will integrate a unique food court concept, designed to respond to changes in consumer behaviour in the context of the pandemic, who are now willing to spend more time outdoors or in well-ventilated areas. Thus, a large part of the food court retailers will own terraces, while the meal will be served both indoors and outdoors. The construction intended for the new commercial spaces is designed to allow additional stages of development in the future, namely offices, the expansion of commercial spaces at the upper level and other large individual commercial spaces, totalling an additional leasable area of 25,000 sqm. In conclusion, in the current market environment, those developers who can adapt their projects to the new circumstances will be the winners in the longer term.

HopStop Siedlce in Poland

Retail Guide 2021

Regional

Outlet Centres

Modern outlet shopping experiences now need to offer upmarket architecture as a magnet for residents and tourists

The next generation of outlet centres are coming Winston Norman Fashion outlet developers are bringing a new standard to the region’s outlet market. The post-pandemic period coupled with the growing importance of entertainment, food, digitization and services has created new impulses and opportunities for the outlet sector. The first outlets established in the region consisted almost entirely of commercial space intended for shops and boutiques. After almost 20 years of their functioning, consumer behaviour and expectations have changed. Due to the growing e-commerce for designer, fashion and lifestyle brands the shopping experience itself has become more and more important.

“The outlet sector has proven to be resilient, both before and coming out of the pandemic. As we have observed over the years – outlets do good in good times and even better in bad times,” commented Barbara Horatz, Partner at TORG International. However, nowadays, modern outlet shopping experiences are not only a place to get good bargains, but they are also destinations for quality time and need to offer upmarket

Retail Guide 2021

architecture as a magnet for residents and tourists. “A strong investment in digital services and close cooperation with tenants, along with our centres’ attractiveness to consumers, have successfully mitigated the pandemic’s impact on our industry,” said Daniel Losantos, CEO of Neinver. “Despite the complexity and uncertainty of the current environment, the sales recovery is very encouraging and

once again shows the company’s resilience and agility, and the brands’ commitment to continue growing with us,” he added. Outlet specialists have identified that besides the main trigger to get great brands 30-70 percent off compared to the regular retail price there is an increasing customer need to create a location to spend qualitative time with family and friends as well as to make shopping more convenient. Therefore,

Outlet Centres food courts, a diversified category mix and brand offers, great retail marketing with promotions and events as well as new services for more convenience are crucial. A prime example of this shift is the new extension of Designer Outlet Warszawa. With an additional 5,500 sqm and more than 25 new stores and restaurants, Designer Outlet Warszawa is the new flagship outlet destination of Poland with a gross lettable area of 23,000 sqm and a unique mix of more than 130 international fashion and lifestyle brands. Katarzyna Ciemińska, Centre Manager of Designer Outlet Warszawa, commented: “We have welcomed more than 30 new brands, including those not yet available in outlet format, who have opened their first and only store in Poland. It is an honour for us to have so many premium brands complementing the already attractive offer of the centre. The new brand line up makes Designer Outlet Warszawa the most attractive outlet shopping destination not only for the residents of the Mazowsze region but also for many international tourists”. Thomas Reichenauer, Managing Director of the operator ROS Retail Outlet Shopping emphasized the importance of the project for the Polish outlet market: “We are very proud to manage this ambitious project and to celebrate this new exciting phase for Designer Outlet Warszawa, which is one of our flagship outlet destinations across Europe. With this new extension and the newly acquired tenants, the centre will strengthen its

pole position in Poland. Furthermore, we are strongly working on further extensions of our Polish centres, Designer Outlet Gdansk and Designer Outlet Sosnowiec,” he said. The outlet also boasts a newly designed food court, which will accommodate food concepts with a fresh & healthy food offer mixed with international well-known F&B brands. According to the developers, with the reopening of the F&B offer, Designer Outlet Warszawa will be the best day-trip destination and meeting point for consumers in Warsaw. Developer Fashion House opened its second outlet centre in Bucharest following an investment of €25 million. The project is located in the eastern part of the city and spans over 12,000 sqm. More than 100 new jobs have been created through the opening of the first phase of Fashion House Pallady. The development of the second and final phase will start in 2022. Pallady, designed by Romanian architecture studio DMA, is the first major part of a much larger retail and leisure park under development by Liebrecht & wooD Group. “We are confident in the fundamentals of the outlet centre market and committed to meeting a growing consumer demand,” said Brendon O’Reilly, Managing Director, Fashion House Group. Tbilisi Outlet Village, the first outlet at the crossroads of East and West, is on track for an Autumn 2022 opening. Work has begun on the 20,000 sqm GLA development just outside the capital of Georgia. Developed by

Regional

Georgian Outlets & Resort Group (GORG) in close collaboration with TORG International, it heralded as the very first outlet in the region. According to the developers, the opening of Phase 1, consisting of 12,500 sqm and 70 units, is well on track. Upon completion, the development will be a major contribution to the local economy. It is expected to attract more than 7 million visitors in its first three years alone including a significant number of cross-border travellers from Azerbaijan, Armenia, Russia and Turkey. It benefits from a strong catchment area made up of Tbilisi’s 1.4 million resident population. Financed by the Domus Group with the support of TBC Bank, one of Georgia’s leading banks, it is a strategically important project for Georgia’s national economy, especially in the post-pandemic period, and is set to play an important role in the growth of Georgian tourism offering a world-class shopping experience to international visitors attracted by the culture, history, cuisine or wine, thus extending their stay in Georgia and increasing tourist expenses. Barbara Horatz, Partner at TORG International, added: Tbilisi Outlet Village will not only create a memorable, but also a safe shopping experience with its open-air design and feel-good atmosphere. We are proud to be 50 percent signed at this point, including a host of high-end, international brands. This is confirming the reputation of Tbilisi as the fashion capital of Eastern Europe and one of the top emerging countries.”

The outlet sector has proven to be resilient, both before and coming out of the pandemic

Retail Guide 2021

Regional

Outlet Centres

Tbilisi Outlet Village

Tbilisi Outlet Village will bring together a variety of international and Georgian brands across a total of 110 carefully curated stores. The architects, Barcelona-based L35, have designed the outlet centre as a fusion between tradition and modernity, reinterpreting the city’s historical facades and courtyards whilst bringing in iconic, contemporary shopfronts. Another sign of the changes afoot in the sector and the responsibility real estate has to clean up its act concerning the environment and the impact of real estate on global carbon levels is the adherence to ESG strategies. For example, VIA Outlets, a leading owner-operator in redefining the outlet shopping experience with a portfolio of elev-

Retail Guide 2021

en premium outlet centres in nine European countries, successfully placed the issuance of €600 million senior unsecured fixed-rate green bonds due 2028. The issuance was 6x times oversubscribed attracting 190 orders from institutional investors for €3.6 billion. The bonds have a 7-year maturity and an annual coupon of 1.75 percent. This is the first ‘green bond’ ever issued by an outlet owner-operator in Europe. The proceeds will be allocated to repay the majority of outstanding debt and to allow the company to execute its growth strategy in the coming years. In parallel to the bonds, a €100 million revolving credit facility was arranged with a set of relationship banks.

Otto Ambagtsheer, Chief Executive Officer at VIA Outlets, commented: “A key milestone for VIA Outlets, this initiative will enable us to continue our work to redefine the outlet shopping experience and be instrumental in further driving our 3 R’s growth strategy of remodelling, remerchandising and remarketing. At the same time, it also allows us to future-proof our centres from a digital and sustainability point of view as part of our recently launched sustainability strategy ‘Beyond Sustainable’.”

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Poland

O ver view

Prime retail in Poland is still suffering from the post-pandemic slump

Poland’s retail sector is emerging from the crisis Winston Norman Retail in Poland recovered noticeably in the second and third quarters of 2021. This sharp rise is primarily attributable to sentiment indicators. Both consumer sentiment and retail sentiment increased over the year. The labour market and retail sales also continue to provide significant support due to their above-average levels. The encouraging news is that, compared with the corresponding period of the previous year, the country is on the up, with some of the strongest gains recorded in the region.

Although the Polish retail market is still struggling with the effects of Covid-19, forecasts seem favourable compared to the rest of Europe. According to Oxford Economics, GDP in Poland is likely to grow at an average of 3.5 percent per year between 2021 and 2025, much higher than the figure for the EU as a whole and the Eurozone (2.8 percent).

Retail Guide 2021

The after-effects of the pandemic are gradually fading. According to the Polish Council of Shopping Centres (PRCH), August 2021 had the highest footfall level since the beginning of the pandemic, with 94 percent of the figure recorded in August 2019. Similarly, the Retail Institute reports there has been steady growth in the turnovers of shopping

centres since May 2021, a period in which no new limits on trade have been introduced. Stationary retail is slowly but surely getting back on track, and e-commerce has stabilised at the level of 7 percent to 8 percent of the total retail sales (according to data from Statistics Poland).

O ver view According to JLL, Poland’s development pipeline reflects a shift in retail format structure. Currently, shopping centres account for 61 percent of total modern retail space and continue to be the most popular retail format among clients. However, the share of their supply has been steadily decreasing over the years (from an 89 percent market share in 2000 to 74 percent in 2010), with retail parks, stand-alone retail warehouses and convenience centres taking increasing shares. Consequently, shopping centres, with their dominant position, are working hard to meet the requirements of today’s customers and become a combination of online and offline worlds, satisfying the needs of today’s shoppers. However, says JLL, the vacancy rate in shopping centres operating in Poland’s major agglomerations grew slightly from 5.3 percent in August 2020 to 5.9 percent in August 2021, reflecting not only the echoes of the pandemic but moreover due to the final withdrawal of Tesco from Poland. According to Avison Young, there was around €0.5 billion in retail investment volume in Q1-Q3 2021. There is a clear division between the two types of investors currently active in the retail market. One group is focused on retail parks, convenience centres and single-anchored properties occupied either by food stores or DIY chains, ideally secured by a rock-solid covenant. The second group is searching for opportunities, purchasing buildings with significant value-add or redevelopment potential.

The market seems to confirm that opportunistic sales of shopping centres have also been targeted by investors over recent months, with the disposal of two large properties, Galeria Malta in Poznan and Galeria Rumia in Rumia, finalised in Q3 2021. JLL reports that a few more transactions of this type are likely to be finalised in the remainder of this year. The largest transaction recorded in Q3 was the disposal of six hypermarkets with a total floor space of 107,600 sqm by Griffin Real Estate. An undisclosed purchaser invested €87 million in the portfolio consisting of Auchan-anchored malls. The leases with the French retailer had just been renegotiated and extended for 12 years. Due to the limited flow of attractive products of such kind to the market, some investors have started to secure new projects as early as the development phase. Patron Capital, the pan-European institutional investor focused on property-backed investments, and Trei Real Estate, an international developer and asset holder for residential and retail real estate, have formed a new 75:25 joint venture to develop and hold retail parks in Poland under the Vendo Park brand. The partners plan to invest about €140 million over the next three to five years, with an initial target of between 15 and 20 Vendo Parks in regional Polish cities. Five Vendo Parks are already confirmed to be in the development pipeline. Funding for the acquisition comes from Patron Capital’s recently

Poland

closed Fund VI. Avison Young Poland advised Patron Capital and Trei on the transaction. Wiktor Lesinski, Principal at Patron Capital, said: “Due to the continued strong fundamentals that underpin the Polish market and the evolving consumer preference towards convenience-driven shopping, this joint venture represents an attractive opportunity for our strategy and builds on our previous experience in Poland. We look forward to working with Trei and benefitting from its local presence, extensive network and experience with retail parks as we realise our strategy for this joint venture in the years ahead.” Pepijn Morshuis, CEO of Trei Real Estate, said: “Entering into a joint venture with an external partner represents an important strategic step for Trei along its growth trajectory. We will soon achieve the objective of holding 50 Vendo Parks in our proprietary portfolio but see the potential for further developments in Poland. The collaborative venture with Patron will allow us to step up the pace of expanding and scaling our business. We also realised over the past years that the demand for retail parks in the smaller towns of Poland is bigger than initially assumed.” Following the sale of the entire business to Salling Group, the disposal of the former Tesco hypermarkets by Tesco UK continues. In the last quarter, the British retailer concluded the sale of a property in Opole, with a few more advanced processes likely to be completed in the remainder of this year. In the meantime, redevelopments of former hypermarkets which traded in the last two

Retail parks are becoming ever more popular in Poland

Retail Guide 2021

Poland

O ver view

years are progressing, e.g. Tesco’s former properties in Puławy and Częstochowa are currently being converted into modern retail parks. “Considering the fast-paced recovery of both turnover and footfall in large shopping centres since May, we are noting a distinct improvement in the sentiment towards this class of assets. If this trend continues, we expect investors will reconsider large-scale transactions soon,” commented JLL. Avison Young observed a continuingly high demand for convenience retail. There were 12 deals of convenience retail schemes, with a large share of these located in small towns, with a population lower than 50,000. Although there is no recent transactional evidence in 2021, JLL estimates that the prime yields for shopping centres at 5.25 percent. The prime cap rates for the best retail parks remain stable, at around 6.80 percent; however, the high level of interest and limited availability of really core products may result in compression in the short term. “With multiple schemes and portfolios being already under offer or construction, this asset class will contribute to increasing of the total volume of the sector in 2021 and also next year. As a result of strong investors’ demand, we have already noticed a yield compression and we expect this trend to continue,” concluded Michal Cwiklinski from Avison Young.

Galeria Andrychow

ADAM KIERNICKI

SENIOR DIRECTOR, RETAIL INVESTMENT, JLL

This year’s retail investment turnover has so far exceeded €450 million across ca 30 transactions, of which around €160 million was completed in Q3. The investment market has been dominated by transactions for small schemes in the retail park and convenience centre segments. This translates into an average transaction value of only around €17 million, which is 70 percent below the pre-pandemic average in 2019. However, it is worth remembering that the revival observed since May in large shopping centres – both in terms of turnover and footfall – may also soon translate into a step up in interest in this asset class and an increase in the scale of transactions.

Retail Guide 2021

Hungary

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Recently delivered Etele Plaza in Budapest

Developers have concerns over retail development Gary J. Morrell Retail development in Hungary has been slow in recent years as developers have had concerns over the level of consumer spending following the financial crisis. Further, stringent planning regulations concerning shopping centre development and subsequently the impact of Covid-19 and the subsequent lockdown and the further rise of online retail and its negative impact on demand and footfall in bricks & mortar retail has also put pressure on the sector. However, reports suggest, demand, and sales volumes are rising with consumer confidence returning to pre-pandemic levels.

As a result, there has been no major shopping centre deliveries for as many as nine years, despite some planned projects by leading international retail developers such as ECE and Echo Investment. Therefore, the opening by the Hungarian retail developer Futureal of the €300 million Etele Plaza project after several delays is seen as a milestone for the Budapest shopping centre

Retail Guide 2021

market and a project that has freshened the city’s retail offer. The indications are that Hungarians in large part still have a preference for the physical experience of shopping in a physical store as brick & mortar shopping still dominates. Euromonitor put online penetration in the Hungarian retail market at 10 percent as a share of e-commerce in total retail sales.

This is clearly at the bottom end of the European League, according to Gábor Borbély, head of business development & research at CBRE Hungary. Retail analysts see this first new large-scale Budapest shopping centre market entrant for several years as a welcome entrant to the Budapest shopping centre market. Futureal acquired the brownfield development site at a major railway, metro, tram and road intersection on the western edge of Budapest 15 years ago.

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Hungary

There is a rise of e-commerce and last mile facilities near Budapest

“Etele Plaza is the latest generation, carefully designed shopping centre that meets the current needs of shoppers and visitors. Over the later ten years our industry has been talking about entertainment and the whole shopping experience has to be entertaining from the moment you start from home to the moment you arrive back,” says Tibor Tatár, CEO of Futureal on the new project. The new market entrant improves the age profile of the shopping centre market as it is the first new development in ten years and 63 percent of shopping centres were not refurbished over the last ten years, according to CBRE. A further 22 percent of stock has been renewed or built recently (including Etele Plaza) while 15 percent is up for regeneration. “I do not see radical change in supply and demand in the next two years in the retail sector. Retailers are optimistic and planning stronger expansion from 2022. They are optimising their portfolios and taking longer time to approve new stores, but they are expanding and planning for the further,” comments Erika Garbutt-Pál, head of retail at CBRE Hungary. “There are no major shopping centre projects in the pipeline, however we are working on several restructuring and repositioning of existing malls. The majority of our shopping centres are older than 20 years, they need to renew and follow today’s trends, otherwise they will lose concerning both tenants and customers,” she added.

Shopping centre stock in Budapest stands at 822,000 sqm with the recent addition of the 55,000 sqm Etele Plaza, according to Cushman & Wakefield. This is a low supply of stock and retail density by European standards. JLL estimate total retail stock in Hungary at over 2 million sqm. Etele Plaza, designed by the Hungarian Paulinyi & Partners, includes around 180 retail outlets, restaurants, cafés, multiplex cinema, gym and 1,300 parking lots. The complex is BREEAM Very Good certified and Futureal is looking to achieve WELL certification, although there is currently no accreditation system for shopping centres. “We did a shopper profile, for example a young couple with small children living in block housing or a wealthy Buda family with high spending power to try to understand what is the shopping experience, what entertains them and what draws their attention from a profile-by-profile perspective. All these details were designed into the complex and this includes several thousand elements from tenant experience, this is from a visual and digital experience and how they approach the shopping centre by public transportation or by car. By thinking from a profile-by-profile perspective we have tried to tick as many boxes as possible and I think that this has been slightly different to the approach of previous shopping centre developers. We even sacrificed income on certain tenants as we needed their function and they could not afford to pay such a high rent,” adds Tibor Tatár.

Shopping centre owners, consultants and financers see the need to adapt centres to meet constantly changing tenant and consumer needs. “Landlords of existing centres have commenced full refurbishment of centres with a strong emphasis on F&B and leisure elements,” commented Cushman & Wakefield. In this way several shopping centre owners have undertaken renovation and extension of existing projects with proposed re-openings scheduled for 2022. CPI Property Group is renovating and extending the Campona shopping centre in South Buda that will bring GLA up to 70,000 sqm. This will consist of 66 percent retail space, 30 percent restaurant space and 15 percent leisure. The company currently operates five shopping centres across Hungary. Another major Hungarian developer, Wing is redeveloping the EuroCenter shopping centre in north Buda with a scheduled completion date of spring 2022 that will bring the complex to 45,000 sqm of space. Concerning high street retail as part of mixed-use complexes, Horizon Development completed the retail component of the Szervita Square office, retail and residential complex. Further, the Emerald Residence hotel, residential hotel and retail complex by Biggeorge Property, also located in the historic centre of Budapest is due to deliver an up-market retail component. Another possible area for development is for regional retail parks with a large grocery content. In this way SES Spar European Shopping Centers delivered the €24 million,

Retail Guide 2021

Hungary

O ver view

11,000 sqm S-Park Kaposvár. The development aims to serve Kaposvár and the surrounding region. Erika Garbutt-Pál sees retail development as part of mixed-use complexes. “I believe this is the way forward and the pandemic is further proved that we need more of these mixed used projects. We like to work closer to our home, we would like to do some sport, entertainment, or social activity close to our workplace and carry out all our daily needs, shopping and services within ten minutes from where we work and live. These must be all covered in a well-planned mixed used development.” The pandemic has further proved that we need more mixed used projects

ERIKA GARBUTT-PÁL

HEAD OF RETAIL, CBRE HUNGARY

We are living in a very fast changing world where online and offline are both developing. Retailers are trying to change, trying to find the best balance between physical stores and e-commerce. In the future, shopping centres have to provide a very pleasant environment, many-many services and a combination of pick-up points, flexi offices, wide selection of F&B, culture and entertainment. All these are huge investment costs. At this moment other asset classes are much more attractive for investors, especially industrial and logistics. But this is also driven by retail – not directly – but through e-commerce. Retail was, is and will be always an investment with higher risk and especially now with the current rental conditions.

ROS APPOINTED AS PROPERTY MANAGER ON M3 OUTLET POLGÁR ROS Retail Outlet Shopping welcomed M3 Outlet Polgár to its outlet portfolio in Hungary, where the company has been present since 2016 with its shopping destination Premier Outlet Budapest. As of 1 October, ROS Retail Outlet Shopping will take over the management of M3 Outlet Polgár. The Vienna-based company has been appointed by Outlet Real Estate Ingatlankezelő Kft to level up the Hungarian outlet. Opened in May 2008, M3 Outlet Polgár is a popular outlet centre in Eastern Hungary with 34 stores on a gross lettable area of 10,900 sqm and more than 100 international fashion and sports brands such as Nike, Adidas, Puma, Gant, Geox, Triumph, Tom Tailor, Salamander and many more, 30-70 percent off, all year round. M3 Outlet Polgár is the only outlet centre within a radius of 200 km and has a catchment of over 2,5 million inhabitants within a 90-minute-drive. It is located in the square of four county seats, one and a half hours away from the capital Budapest. Furthermore, M3 Outlet Polgár is also easily accessible from the three neighbouring countries of Ukraine, Romania and Slovakia. The mandate increases the portfolio managed by ROS Retail Outlet Shopping in Hungary and provides further evidence of the operator’s increasing strength in Europe. Since 2016, ROS also manages Premier Outlet Budapest in the country, which recently teamed up with Coniq’s digital platform to collect and use customer data to improve footfall, sales and loyalty.

Retail Guide 2021

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Czech/Slovakia

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Eurovea in Bratislava by JTRE

Czech and Slovak’s retail seen as consolidated Gary J. Morrell The Czech Republic and Slovakian retail markets could be seen as consolidated with low shopping centre development pipelines. Although there are major ongoing city centre development projects as part of mixed-use developments with service, leisure and office elements in response to perceived changing consumer demand. At the same time, shopping centre owners are looking to redevelop, update and extend the existing stock. Confidence in retail demand remains generally positive for the post-pandemic period, despite restrained development pipelines.

According to Cushman & Wakefield, there are many ways in which shopping centre owners need to adapt/renovate and redesign their centres to meet changing market demands this list should be extensive and will not only cover changing tenant needs but also changing consumer needs, as well as environmental and technological changes. “Most importantly, such a list cannot be

Retail Guide 2021

generalised and should be created for a particular project, ideally in close collaboration between architecture/construction, retail/ leasing, marketing and financial/investing professionals,” commented Pavol Kopernický, head of retail agency at Cushman & Wakefield Slovakia. Around 140,000 sqm of shopping centres are currently in different stages of develop-

ment in the Czech Republic. These include extensions, reconstructions or redevelopments of older schemes in all cases, according to Jiří Kristek, head of industrial & retail warehousing at Cushman & Wakefield in the Czech Republic. Limited new supply mainly consists of retail parks located in smaller cities and regional centres, says JLL.

O ver view The timing of projects remains uncertain, mainly due to the permitting process and therefore many developments are not expected to be delivered until 2023. Total retail stock in the Czech Republic stands at around 3.85 million sqm, from which 68 percent consists of shopping centres. The current pipeline includes 30,500 sqm of space in Brno with the second most retail stock after Prague at 207,000 sqm and shopping centre stock density of 750 sqm per 1,000 inhabitants, according to Cushman & Wakefield. This compares to Prague with 650 sqm per 1,000 inhabitants. In the centre of Prague, construction is ongoing on the long-awaited Masarycka office, retail and hotel mixed-use project by Penta Investments that will include 10,000 sqm of retail, and is due to be delivered in early 2023. The project, designed by Zaha Hadid Architects studio, is located on a brownfield site adjacent to the Masaryk railway station and includes the renovation of the railway station and the project has been undertaken in conjunction with Czech Railways. In the historic centre of Prague, the Savarin project by Crestyl Group consists of the reconstruction of seven buildings into 39,000 sqm of retail, 20,000 sqm of office and 8,000 sqm restaurant space. The project on a 17-hectare site will connect Wenceslas Square with Na Příkopě and Jindřišská. Cre-

styl Group purchased the development from the Irish developer, Ballymore and the project is due to be completed in 2022. Despite the impact of the pandemic on the performance of shopping centres, new schemes are opening across Slovakia. Retail stock in the country stands at around 2 million sqm, 64 percent consists of shopping centres and 28 percent retail parks, with the majority located in the Bratislava, Kosice, Zilina and Nitra regions, according to JLL. Prime shopping centre stock totals 1.3 million sqm with an estimated 160,000 sqm under construction as of summer, including the recently delivered Nivy Mall and the Eurovea extension in Bratislava. The recently delivered retail component of Stanica Nivy by HB Reavis consists of 70,000 sqm of new shopping centre space. In addition, the mixed-use development consists of a 30,000 sqm office tower (the tallest office complex in Bratislava), and is supported by a bus terminal. According to the developer, the retail element attracted around one million visitors in its first 24 days of operations and is 90 percent let. The complex has been awarded BREEAM Communities Excellent accreditation. The only ongoing large-scale retail development in Bratislava is the 25,000 sqm retail component of the 116,000 sqm Danube river-front Eurovea complex by the Slovaki-

Czech/Slovakia

an and CEE developer, JTRE. The extension will extend the retail offer at the complex to around 85,000 sqm with a scheduled completion date of 2023. JTRE purchased the development from Ballymore who developed the first phases of the project in 2014. The second mixed-use phase will also consist of 44,000 sqm of office space and 47,000 sqm of high-rise residential consisting of 500 apartments. JTRE have secured a €116 million loan from a syndicate led by Tara banka, which Peter Korbacka, chairman of Eurovea, sees as a sign of confidence in the ambitious project, given the impact of Covid on the development markets. Although questions have been raised about the possibility of market saturation in Bratislava the projects are seen as providing a new generation of retail as part of wider commercial and leisure complexes by the developers. Concerning retail as part of mixed-use complexes, Cushman & Wakefield sees the success of mixed-use projects as depending on location, population, project size, and design. “The continued development of residential housing, increase in prices and disappearing boundaries between private life, social life, work and play will motivate developers to add value, sense of place and increased quality to their projects also by mov-

Stanica Nivy by HB Reavis

Retail Guide 2021

Czech/Slovakia

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New Nivy Zone in Bratislava

ing towards a mixed-use model. The retail will play an integral part in such new mixeduse developments,” said Pavol Kopernický. Outside the capital JTRE delivered the second phase of the Eperia shopping cen-

tre in Preslov that extended the complex by 11,000 sqm, extending the retail element by 50 percent and adding a multiplex cinema. JTRE opened the 22,000 sqm first phase of the development in 2017.

The largest regional pipeline project under construction is the 26,000 sqm Promenade shopping centre in Nitra, which is due for completion in the first half of next year.

PAVOL KOPERNICKÝ

HEAD OF RETAIL AGENCY, CUSHMAN & WAKEFIELD SLOVAKIA The fundamental motivation for owners/investors is the renovation and redesign of shopping centres. The motivation to adapt/renovate and redesign shopping centres is mainly set by the age of the building, intended property ownership length, market competition/ pressure, expected redesign effects on property profit increase from the rentals, thus the property value. There are already many seven years and older shopping centres on the Czech and Slovak market where we can expect exciting redevelopments in the upcoming years

ANDY THOMSON

HEAD OF CAPITAL MARKETS CZECH & SLOVAKIA , COLLIERS

In terms of volumes, new retail supply is expected to remain somewhat limited and future development will lag supply. This does not mean to say that there will not be changes and the sector will not stand still – shopping centre owners for example will need to refurbish/adapt their space to accommodate changing retailer and customer demands. Similarly, we are aware of several city-centre projects which we expect to move ahead as the market improves. Demand is expected to increase (compared to the last couple of years) given the increases in tourism and reduced restrictions around Covid assuming vaccinations continue to have a strong impact.

Retail Guide 2021

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CEE Investment Awards

CEE Investment Awards Gala 2021

Region’s investment and associated sectors celebrated at annual CEE Investment Awards Winston Norman EuropaProperty has completed its 11th annual CEE Investment Awards at the Intercontinental Hotel in Warsaw. The awards gala was heralded a great success and were well-received by all the winners and their guests. The gala ceremony looked fantastic and was once again witnessed by a select group of around 200 senior European and Central European real estate professionals; affirming the event’s status as a true landmark for the investment and associated real estate sectors.

Griffin Real Estate, CBRE Investment Management, Blackbrook Capital and Zeitgeist Asset Management were this year’s big investment winners, collecting multiple awards across all the main investment categories. Panattoni, Ghelamco, Echo Investment and BLD Homes walked away with some of the big development prizes. Griffin Real Estate was deemed this year’s best overall investor largely on the back of

Retail Guide 2021

its successful transactions and diversified investment strategy. Griffin won three awards on the night including Opportunistic and JV investor and Investment Deal in the €50 – €100 million category selling six retail properties in Poland to a confidential buyer. A new investor to the region, Blackbrook Capital, was recognised by the jury for its successful entry into the Central and Eastern European market. The investor collected two

awards including Warehouse Investor and Professional of the Year for the company’s Founder and CEO Arvi Luomo. GTC was awarded Office Investor on the back of its successful investment throughout the region. The regional investor/developer acquired two top-class office assets from WING in Budapest as well as de-investing its Serbian office portfolio to Indotek for a record-breaking sum and return.

CEE Investment Awards Cornerstone Investment Management and Crestyl Group were recognised for their spectacular entrance into the PRS market with the acquisition of Spravia (previously Budimex) in the Investment Deal €100 million + category. Zeitgeist Asset Management was recognised as a Residential Investor for its acquisition strategy throughout the region, and its recent PRS purchases and Student housing development. The firm also collected the Value-Add/Core + Investor prize. Investment recognition also went to CBRE Investment Management as Investment Asset Management Firm and Core Investor. The firm was also recognised for its acquisition of two 7R industrial facilities in Poland. pbb Deutsche Pfandbriefbank was voted this year’s Bank of the Year. The specialist bank was recognised for its core business of lending and the important role it plays in supplying credit to the real estate industry. Panattoni collected the Warehouse Development of the Year award for the BTS development for Weber in Poland. Warsaw Unit was voted Office Project of the Year. The recently developed office complex was deemed by the jurors to be the best example of a leading Class A office development as well as accentuating the strength of the developer’s advanced technological innovations and modern development solutions. Ghelamco also collected the Future Project award for the soon to be operational skyscraper The Bridge. Another future project recognised by the jurors was Tbilisi Outlet Village by Torg International.

Another success from the investment and development side came from Park Lake Developments’ Park Lake Office Center in Bulgaria. The recently developed, and sold onto German investors SAP for around €50 million office building, was a great example of the region’s growing interest to international investors. Other developments recognised by the awards included Futureal’s €300 million Etele Plaza in Budapest. This smart retail development was deemed by the jurors as the best example of modern retail development for today’s omnichannel retail environment. Galeria Andrychow by Equilis and Acteeum in Poland won the Retail Park award. Trei Real Estate, a prolific retail park developer won the Retail Developer of the Year award. Echo Investment, a leading real estate development company operating in Poland and focusing on the development of largescale city-forming commercial projects, took the Office Developer of the Year award, after being recognised by the Jury for its continued successful sustainable development model across Poland. The developer also won Mixed-use Development for their successfully received Warsaw Breweries project. This year has seen the region’s residential market grow in importance. In this way, this year’s awards ceremony celebrated residential development and investment throughout the region. Bulgaria came out a strong favourite. BLD Homes received two awards, one for the company’s Secret Gardens residential project and another for Residential Developer of the Year.

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A personal award was handed out to CPI Property Group’s Marcin Mędrzycki for Property Manager of the Year. CBRE was awarded Property Management Firm and Corporate Agency of the Year and Arcadis walked away with the Project Management Firm award and Professional Service Provider. Other company awards were given to New Work Offices which won Serviced Office Provider. TPA Poland was once again voted this year’s best Tax and Financial Adviser, and Dual Asset was voted the best Title Insurance Provider. Other industry winners included Dentons as Law Firm, Kajima as Construction Firm and APA Wojciechowski Architects as Architectural Firm of the Year. Accentuating the strength and interest in the region’s commercial real estate sector and associated industries, were the prizes for Manufacturer of the Year won by Toyota Motor Group and DHL Supply Chain won Logistics company. Poznan was recognised by the jurors as a Polish city that is excelling in its green initiatives and offering agreeable terms and opportunities for investors and sustainable investment and development. On behalf of our sponsors, judges and attendees, we offer our congratulations to all the winners. Foundations are already in place for next year’s event, which promises to be even better. The 12th annual CEE Investment Awards will be held on October 26/27th, 2022.

Retail Guide 2021

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CEE Investment Awards

Region’s investment markets are in good shape Expert panellists at EuropaProperty’s CEO Investment Forum agreed that the investment markets of the CEE region are performing well and are in good condition despite the pandemic. At present, the best-performing markets are the warehouse and logistics sector as well as growing interest in the private rental sector. Overall, investment volumes are expected to return to pre-covid norms.

“Poland is the main market, it’s very liquid,” said Dieter Knittel from pbb Deutsche Pfandbreifbank. “A certain product can be found in Poland that investors like. It’s a big market with many regional cities. In this way, it is similar to the German market. Exits are more attractive and there’s a broader investment base.” Lukasz Bialecki from Bank Pekao commented: “Over the next 12 months the warehouse sector will continue to be strong. The PRS is the next best, however, there is a lack of product here. The offices will re-emerge and come back. I see the biggest problems in retail. However, the hotel sector will recover quickly. On the downside, there is crazy pricing on logistic exits which is not sustainable in the long term. Also, products are really expensive or have too much risk.”

Retail Guide 2021

Arvi Loumo from Blackbrook Capital, said: “We launched last year with a billion euros. We are looking for legacy assets – the ones that can ride through the market cycles the best. Also, we need to be opportunistic to make it work. Poland is proving to be an important and growing market for industrial tenants. We have a strong conviction about future growth here.” Anna Duchnowska, Invesco, commented, “We like to work with JVs and local partners across the region. The last mile and PRS sectors are very interesting for us at the moment.” Hubert Abt from New Work Offices, commented, “Prices across the board are rising. In my view, energy costs are a potential drawback when considering Poland and could be a hindrance to future investment strategies.

ESG initiatives are playing a big role today. Green credentials are a very important element for investors with the rise of green bonds. Institutional investors may not invest in Poland because of its lack of ESG credentials. This could lead to an exit being a problem for investors.” Arvi Loumo, concluded: “The challenge is to create a sustainable transaction – not just in terms of ESG but with good finance and good tenants etc. Using ESG audits for the benefits of products and how to improve them. What can be done for older assets? Where can savings be made to keep the cost down and help with ESG initiative directives?”

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CEE Investment Awards 2021: Full List of Winners EuropaProperty is delighted to announce the winners of 11th Annual CEE Investment Awards for investment, sustainable development, and business excellence in Central and Eastern Europe. Once again the awards were handed-out to a full house of participants at the Intercontinental Warsaw Hotel.

Professional Service Provider Arcadis

Serviced Office Provider New Work Offices

Architectural Firm APA Wojciechowski Architects

Bank pbb Deutsche Pfandbriefbank

Logistics Company DHL Supply Chain

Corporate Agency CBRE

Title Insurance Provider DUAL Asset

Retail Developer Trei Real Estate

Mixed-use Project Warsaw Breweries - Echo Investment - Poland

Tax and financial advisor TPA Poland Manufacturer Toyota Motor Group

Residential Developer BLD Homes

Retail Project Etele Plaza - Futureal – Hungary

Warehouse Developer Panattoni

Retail Park Galeria Andrychów - Equilis and Acteeum Group - Poland

Law Firm Dentons Construction Company Kajima Project Management Company Arcadis Property Management Company CBRE Property Manager Marcin Mędrzycki - CPI Property Group

Office Developer Echo Investment CITY Poznan Future Project The Bridge - Ghelamco - Poland Future Retail Project Tbilisi Outlet Village - Torg International - Georgia

Warehouse Project WEBER Panattoni BTS - Panattoni - Poland Residential Project Secret Gardens - BLD Homes - Bulgaria

Office Project Warsaw UNIT - Ghelamco - Poland SEE Office Project Park Lane Office Center - Park Lane Developments - Bulgaria INVESTMENT DEAL €100 million + Acquisition of Spravia (previously Budimex) by Cornerstone Investment Management and Crestyl

Retail Guide 2021

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CEE Investment Awards

€50-100 million Griffin Real Estate sells six retail properties to a confidential buyer Under €50 million CBRE Investment Management acquired 7R Park Poznań East and 7R Park Sosnowiec Residential Investor Zeitgeist Asset Management

Office Investor GTC Warehouse Investor Blackbrook Capital Investment Asset Management Company CBRE Investment Management JV Investor Griffin Real Estate

Opportunistic Investor Griffin Real Estate Value add/Core + Investor Zeitgeist Asset Management Core Investor CBRE Investment Management Professional Arvi Luoma - Blackbrook Capital

Georgia’s first outlet project took home the award for Retail Project of the Future at the CEE Investment Awards in Warsaw. Developed by Georgian Outlets & Resort Group (GORG) in close collaboration with TORG International, the team behind Tbilisi Outlet Village is thrilled to have been recognized as Retail Project of the Future at the 11th “EuropaProperty Investment Awards”. Robert van den Heuvel, Partner at TORG International, said: “We feel hugely honoured to receive this prestigious award for Eastern Europe. Ever since we started working on Tbilisi Outlet Village almost three years ago, developing Tbilisi Outlet Village has been an amazing journey - a great team effort! A big thank you goes to the relentless efforts of the local investors who have been giving us all their trust since day one. The response so far has been overwhelming. Never in my career have I seen a project leased over 50 percent at this early stage of construction including so many top brands. We are determined to make Tbilisi Outlet Village the #1 outlet in Eastern Europe.”

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CEE Retail Awards

Nominations are now open for the 14th annual CEE Retail Awards & Marketplace Winston Norman The CEE Retail Awards & Marketplace is the region’s premier awards show and experience celebrating the retail industry. Widely recognised as the market benchmark for retail success in Central and Eastern Europe, EuropaProperty is proud to host and present the 14th annual CEE Retail Awards Gala & Marketplace. This eagerly anticipated occasion will take place LIVE & ONLINE on January 27, 2022, at the Intercontinental Hotel in Warsaw.

THE FLAGSHIP RETAIL EVENT FOR THE REGION The CEE Retail Awards & Marketplace is dedicated to today’s new look networking environment and delivers a professional

Retail Guide 2021

platform for deal-making, relationship building and one-on-one or group discussions on the evolving retail investment and devel-

opment opportunities that are presenting themselves to the market. The event opens with the CEE Retail & CEO Networking Forum, a series of discussion panels covering the hot topics and relevant issues for today’s dynamically evolving

CEE Retail Awards retail sector. The Retail Forum provides an opportunity to hear from some of the retail market’s top thought leaders, as well as opportunities to discuss and explore the retail industries most important topics. STAY CONNECTED WITH MARKETPLACE This event consists of forums, networking, retailer platform, awards gala and online marketplace, as well as providing an excellent opportunity to make new contacts and renew existing business relationships on a professional networking platform. These are unprecedented times and EuropaProperty is fast becoming a multidisciplinary enterprise with an array of mediums to help the industry move forward. Therefore, The CEE Retail Awards and Marketplace is active and available to attendees and sponsors to utilise immediately.

E-RETAIL & INNOVATION Meet the most active retailer, innovators, e-retailers, investors, developers, bankers, asset managers and CRE professionals active or looking to enter the region. With over 600 directors – local, regional and international participants – this event is not to be missed. As a backdrop to the whole event is the Marketplace and Retailer Networking Platform, an online marketplace where developers and retailers can meet to discuss, formulate and make deals.

Regional

EuropaProperty is expecting more than 500 participants including many retailers doing business or planning to do business in the region. This event is subject to considerable media coverage with local and international media present. This ensures participants, companies, and award winners, an extra opportunity to publicize themselves and of course the retail sector throughout the whole of Central and Eastern Europe. To enter a nomination or get more information about the event please visit www. retailawards.eu.

KEY RETAILERS At the awards gala, retailers, real estate companies, projects and individuals will be presented with awards of acknowledgement by the industry for their contribution to the development of the retail commercial real estate market in the region for 2021.

Retail Guide 2021

Regional

Retail Guide 2021

CEE Retail Awards

EUROPAPROPERTY

PROVIDES

COMPREHENSIVE

AND

UP-TO-DATE

NEWS,

INFORMATIONS AND ANALYSIS ON COMMERCIAL REAL ESTATE MARKETS AND RELATED BUSINESSES. SUBSCRIBTION ONLY € 499 ANNUALLY

Subscribers will receive by post: Annual Publications: March “EuropaProperty Real Estate Guide” October “EuropaProperty Investment Guide” November “EuropaProperty Retail Guide” Weekly E-newsletter One year subscription to the Cee/Russia-CIS CRE e-newsletter Additional Beneﬁts: 20% discount on a VIP delegate ticket to all Europaproperty conferences and events Invitations to all Europaproperty VIP cocktail events throughout the region *Price does not include 8% VAT

Subscribe online at www.europaproperty.com or contact us at: admin@europaproperty.com Retail Guide 2021

The MIPIM 2022 edition promises to be rich in terms of learning, benchmarking, networking and trading during the 4-day event with 70% of the exhibition area already booked 6 months prior to the event & a programme of ﬁrst-class talks exploring a new theme, ‘Driving Urban Change’. We are MIPIM, guiding and inﬂuencing the urban building landscape, everywhere.

In a context where real estate must reinvent itself to embody our futures cities, we believe we can join our forces and make a diﬀerence with a positive contribution to the urban change.