Behind the scenes they may be, but retail centre managers produce visible results

Retail centres: a few thousand sqm., about one hundred shops, cafes, services, a multiplex and entertainment sector, plus 30,000 customers a day. 

Who makes these  giants function?
Retail centre managers have been around in Poland for some time now but have remained in their employers' shadows. Big developers or retail chains, such as Metro AG are very well-known, but few people have heard of Metro Real Estate Management, for example, a company which was  specially established to manage retail developments.

I.
"Managing  retail properties can be divided into three stages", says Michael Atwell, head of the retail asset management team of Cushman & Wakefield H&B. ,The first is  the design stage, when we discuss operational issues, such as maintenance rooms, goods-delivery, cleaning, security, parking, the manager's office, technical equipment and the integrated Building Management System (BMS). Such consultation with the architects, facilitates the smooth functioning of the project and can considerably increase efficiency, as well as lower  operating costs".
These suggestions to architects are often rejected by investors, who want to achieve the lowest possible costs at each stage of development and often ignore longer-term considerations. All the managers Eurobuild talked to, such as Thorsten Machus of  Metro Real Estate Management, said that  this short-sightedness can be very damaging. In his opinion, mistakes made at the design stage are the most problematic and difficult to remove.

II.
The second stage is setting-up this 'management'. It is carried out during the period leading up to the opening of the centre and is when a staff hierarchy is established, recruitment begins and job descriptions are prepared.
"The Centre Manager should be 'in place' at least one year before the opening of the development, and the remaining staff - three months before the opening", says Michael Atwell of Cushman & Wakefield H&B.
Contracts with service companies are also concluded during this stage, and tenant manuals, regulations and instructions worked out. The actual costs of operation and principles of their distribution are estimated and the promotion and marketing campaign must be prepared before the opening of the retail centre.

III.
The third stage is property and asset management. The purpose here is to increase the value of the retail centre by: monitoring the costs of operation and invoicing, collecting recoverables such as rents, service charges, marketing and utilities, reporting to the owner, co-operating with tenants and service companies and overseeing the maintenance of the  building.

The grand opening
The manager is involved in marketing the retail centre during all stages of both construction and  day-to-day functioning. After analysing market demand, the centre is advertised to potential tenants and consumers.
Poles are becoming increasingly demanding and need to be attracted to new developments. Retail centres managed by Apsys organise cultural 'animation' events, GTC orders research into consumption habits and then uses this knowledge, and Cefic believes that it can appeal to customers because its 'Arkadia' is perhaps Poland's biggest retail and entertainment centre.

Tenant's performance
"The primary objective of  managing agents is to increase the capital value of the investment," says Michael Atwell. That can be achieved by: finding ways to restructure lease agreements, reviewing tenants' trade performance and careful monitoring of the competition and market trends. Managers also check if it is possible to amend lease agreements - of course, for their own benefit: "When we notice that a given shop isn't attracting customers, we consider whether it should be moved to another place within the shopping gallery or if the lease should be terminated", says Grzegorz Latala, Managing Director of Apsys Polska. "If a tenant is doing very well, they can be offered larger premises", claims Yoram Reshef, Director of Galeria Mokotów in Warsaw and Retail Centre Managing Director of the Globe Trade Centre.

Who does it and for how much
How many people are needed to supervise and manage a big retail centre? "GTC (the owner) has five employees at Galeria Mokotów", Yoram Reshef informed us. Michal Pielat told us that there are about four people working at each development managed by Cefic Polska.
Companies managing retail centres sign an agreement with the owner, specifying remuneration for their services. Usually it is a certain percentage of the proceeds from leases. It would thus be difficult for owners to cheat managers,  who collect all the rents, and know precisely how much they should be earning each month.  Owners too can be confident that managers will do their best to ensure that all shops pay their rent on time.