First on the scene

Aneta Cichla, ‘Eurobuild Central & Eastern Europe’: When do developers really start leasing a shopping centre that is still only at the planning stage?

Jacek Wachowicz, a board member at Globe Trade Centre: Our team starts to draw up the tenant mix, the offer and the profile of the planned shopping centres quite early – as soon as at the concept stage. At this time we want the anchor tenants to have the deciding vote. They participate, within specific limits of course, in the commercial design of the centre. During such meetings, which often take the form of workshops, we find out quite a bit about the functioning of certain brands and their needs and expectations in terms of retail space. We know these companies very well, the way their business strategies evolve – and we always try to be up to date and get a full picture of the situation. We have used such a method in the case of Galeria Północna. Together with the tenants we wondered how best to design the centre so that it fits in with the latest trends. We have listened to a lot of comments and taken some of them into account. The first few leases in Galeria Północna were signed a year or a year and a half before the launch of the construction work, which is to start in the autumn. The same method is to be used for the
project in Wilanów.

What do you take into consideration when structuring the tenant mix?

First of all we take into consideration what the market expects. I mean the customers – because it is they who will be ultimately shopping and spending time in our centres, and it is for them we are building the mall. And they want new, interesting ideas and retail offers. We have carried out surveys, research and questionnaires for shopping preferences and residents’ expectations in Białołęka as well as Wilanów district. We have also held public consultations with reference to the planned centres, adjusting their profiles to the results we have obtained. In both cases we have received positive feedback regarding the idea to build a mall. The respondents have very often pointed out that there is a lack of broad, modern offer in this area, so based on this we started the commercial planning of Galeria Północna and Galeria Wilanów. From the point of view of the developer, as I have already said, tenants are the intermediary between us and the ultimate customer and an important element, which is why we have also relied on their knowledge.

So who is the modern customer? What do they need?

In both cases – Galeria Północna and Galeria Wilanów – the customer is very demanding. Respondents in the survey emphasised that they would choose the best and the most modern project. Our malls are planned as first choice centres, in terms of the time needed to access them and their offer in comparison to rival malls. First of all, we will create an attractive extended entertainment, cinema and restaurant area as well as recreational areas around the centre and indoors. There will also be modern car parking to support the centre on the upper levels as well as under the ground. Having analysed the answers, we have noted that the need for the presence of chain tenants with their superior concepts and flagship stores is very important. Therefore both projects will feature a Reserved outlet. Things are similar in the case of Cinema City, which is to open its latest format in Galeria Północna. This will have the latest technology and a modern interior design concept. We are in the process of signing a similar agreement for Galeria Wilanów.

Who are developers currently building shopping centres for? Perhaps they should start to think about the elderly? On the one hand, Polish society is getting older – on the other there is a lack of provision for older customers.

Developers have always built for the same group, i.e. consumers – and this has not changed. The methods and technology used differ, but the intention remains the same. Our idea is to create a place that will be more attractive for customers than our competition. One that will offer a more interesting tenant mix, better entertainment and catering functions. A place that will be easier to access and more aesthetic. We have invested a lot of energy in examining the market and consumer expectations; we also have a great deal of experience gained from our earlier retail projects. All of this gives us confidence that Galeria Północna and Galeria Wilanów will be such centres.

As far as the customers themselves are concerned, we do not have a market where the elderly would be the dominant group and this will not change for a long time. We follow the trends closely as well as changes in consumer behaviour. When there are considerable shifts, we will certainly adjust our projects to fit in with their needs as well as possible.

You mentioned the growing significance of the entertainment offer. What else currently counts when devising the
profile of a shopping centre?

The entertainment offer is an important element of a mall nowadays. In the centre in Białołęka, the cinema section, particularly the foyer, will also be combined with an extended restaurant, bar and entertainment section so that all this creates one organism. We will make sure that the stores opened in both centres are as modern as possible and offer more than other malls. What we will offer in terms of spending free time will be much more interesting and attractive than in older centres. The idea for the tenant mix has diametrically changed over this period of time and we have followed it. We will put the emphasis on the catering area. Many interesting local restaurants and fast food concepts are now emerging in Poland and it is worth featuring them in our malls. Our mix will combine tenants offering casual dining cuisine, fast food, restaurants and cafés. The food court will be exceptional in terms of the tenant mix, as well as the design. We have employed an international consultant for this purpose, who has worked with other developers on the catering mix and restaurant concepts of the latest shopping centres in Prague and Bratislava.

Fashion will of course still reign supreme. The mix will include popular and not so common brands, either making their debut in Białołęka and Wilanów or opening one of their first few stores in Poland. In a few cases we will be the prime mover in bringing these brands to Poland. I can assure you that Galeria Północna’s offer will be unique. We will create an exceptional project.

Entertainment and recreation also involve fitness clubs, which have recently become fashionable. What brand of fitness club will feature in Galeria Północna?

The fitness concept will be present in Galeria Północna, but this is unlikely to have a standard format. We want to be different. We want to offer something else, something more interesting than what is available in other malls. Fitness chain operators are very interested in locating their clubs in our centres, but we want a unique approach, which is why we have not made the final decision for the form of this zone yet.

So what will the shopping centre look like?

For Galeria Północna we expect to have a public outdoor area. In order to do this we will develop the roof, which will have the cinema, restaurant and entertainment area on one side and a car park on the other. So the customers of those will have a direct access to this section. An open area including greenery and paths has been planned out between the zones. In the summer we are planning to put out restaurant tables and cafés there as well as make the recreational area available for practising sports. We will also be developing this idea in our project in Wilanów, where we have promised to create squares around the building. Furthermore, we are applying for a LEED ecological certificate for the design stage of Galeria Północna. The centre will also be hi-tech: as well as environmental systems it will also have modern navigation and information systems.

Let’s come back to the issue of international tenants. How have the negotiations with these been going?

They are extremely long negotiations. Foreign companies follow their own development strategies and to acquire such a brand many factors need to be in place at the same time. It is necessary to find local partners (if we are talking about companies that develop through franchising) and a suitable retail project. All of this must be preceded and confirmed by research into the attractiveness of a given product for Polish consumers. We started negotiating with these tenants at an early stage in the designing of the centre, which turned out to be the right decision because by doing so it is easier to integrate the design with the strategic development plans of the brand for the future.

Does the fact that you are currently offering areas in two malls help you in the leasing process?

There are tenants who are only interested in one shopping centre for various reasons. However, we discuss both projects with the majority of them. It is easier because we negotiate only once. The effect of scale mainly emerged because nothing has been built in Warsaw for the last few years. Our advantages are the locations – in two different places in Warsaw and the advancement of the project – the construction process is to start any day.

Why has the leasing process for shopping centres recently become longer so that malls are now not fully leased out on their opening dates?

Ours will be. In Galeria Północna we have tenants for 30 pct of the available area, that is, 20,000 sqm, and another 20 pct is at a very advanced stage of negotiations. Galeria Wilanów has a slightly lower leasing level, but this will change very quickly because, as I have already mentioned, nothing has been built in Warsaw for a long time and nothing will be built soon, at least close to our centres. We will be the first ones in these neighbourhoods.

However, our tenants’ expansion plans are the basis of all this. If retailers are not planning to grow, nothing will help us even if we built malls made of gold. The tenant interest is obvious for the projects we are developing. Warsaw has one of the lowest retail space saturation indexes, which makes it an attractive field for the expansion of retail chains. There is also the purchasing power of the city’s residents, which is considerably above the average, and in Wilanów amounts to as much as 170 pct of the average for the entire country. The market in Warsaw now demands new projects.

At what stage is the construction of Galeria Północna?

We have finished all the preparations and expect to receive a building permit in the middle of the year. Construction work on the centre will start directly after the permit becomes final.The general contractor has already been chosen, but I cannot disclose the company’s identity.

When is the opening planned?

If everything goes according to schedule, the opening is to take place in spring 2017.

Active player

Since it was established in 1994, the Globe Trade Centre group has been active on the real estate markets of Poland, Romania, Serbia, Croatia, Bulgaria, Slovakia and Hungary. The company has developed 60 commercial buildings with a leasable area of over 1 mln sqm, as well as nine residential projects with an area of over 400,000 sqm. GTC is currently the owner and manager of 34 commercial and office buildings as well as shopping centres with a combined area of over 652,000 sqm.