Expansion of shopping centers in the Czech Republic has ended; they are awaiting modernization

Prague, February 2 (ČTK) - According to experts, the main wave of expansion of shopping centers in the Czech Republic has ended. Investments will now focus more on the expansion or modernization of older shopping centers, which will try to maintain their positions in the domestic market in this way. This follows from the statements of experts at today’s Retail Summit conference.
    "This year, we do not expect (in the Czech Republic) the construction of new shopping centers. The largest wave of their expansion is coming to an end,” said Alexander Rafajlovič, head of market research at the analytical company Cushman & Wakefield. He added that this year only the construction of smaller shopping parks or retail spaces in city centers can be expected.
    According to Pavel Klimeš from EMCM, a company specializing in the management of shopping centers, the reconstruction of older shopping complexes is gaining importance lately. The modernization will primarily concern shopping centers built six to ten years ago. "Due to the competition, which is becoming increasingly fierce, and the effort to maintain the value and positions of these projects, significant activities in the area of redevelopment are expected,” Klimeš predicts.
    Reconstruction, according to Klimeš, can also help those shopping centers that, for example, are in a worse position due to poorly set projects. It is easier to attract tenants to a reconstructed shopping center that has a history and customers than to a new project, he noted.
    In the Czech Republic, about three hundred shopping centers were operating in the middle of last year according to data from Incoma GfK. The most numerous are small shopping centers with rental areas from 5,000 to 19,999 square meters, of which there were about 170 last year. They are followed by small retail parks, which Incoma GfK estimates to be around 50. The area of these commercial complexes, which are usually located on the outskirts of cities, ranges from 5,000 to 9,900 square meters.
    Last year, there were 23 medium-sized retail parks with rentable areas of 10,000 to 19,000 square meters. There are 30 medium-sized traditional shopping centers, whose area ranges from 20,000 to 39,999 square meters. There were nine large shopping centers with areas of 40,000 to 79,999 square meters. There are currently ten large retail parks with areas exceeding 20,000 square meters. There are currently four very large shopping centers with areas exceeding 80,000 square meters, including the Letňany shopping center in Prague.
    Shopping centers have been a phenomenon of domestic retail since the late 1990s when their construction picked up pace. However, they are now experiencing tough times, as about one-third of their visitors have reduced their spending due to the economic crisis. Many shopping centers have reported a decline in turnover, and some less quality centers have had to cope not only with a decline in customers but also with the departure of tenants.