The expansion of shopping centers will now head to smaller towns

Prague - In the coming years, the expansion of shopping centers in the Czech Republic will accelerate, and their developers will, according to experts, focus more on smaller cities. So far, large shopping centers have mainly been established in Prague, Brno, or Ostrava; now, provincial cities and towns with populations of 50,000 to 100,000 should also see increased development. In addition to these new markets, investors are also concentrating on the central areas of cities, where shopping centers are not yet widespread.
     Based on data from Incoma Research, as of July this year, there were already 206 shopping centers operating in the Czech Republic, of which 35 largest have 50 or more tenants.
    "Shopping centers are definitely not in crisis. Several dozen more projects are being prepared in the regions," said František Diviš from Incoma Research at a professional conference in Prague today. According to Diviš, the expansion of shopping centers is expected to accelerate in the next two years, with ten to twenty larger projects expected to be completed. In addition to regional cities or cities with populations of 50,000 to 100,000, shopping centers will also be more frequently constructed in city centers, as lucrative peripheral areas are mostly occupied. "New concepts will also be used more, such as outlet centers, discount shopping centers, or multifunctional centers," Diviš pointed out.
    For example, the retail chain Globus has teamed up with the development company Codeco, which will build new shopping passages at some Globus hypermarkets, featuring dozens of smaller shops and services. The first shopping center has been in operation for several months at the Globus hypermarket in Olomouc, and others are set to open next autumn in České Budějovice and Liberec. Afterwards, Globus hypermarkets in Pardubice, Ústí nad Labem, and Opava, as well as a planned large store in Karlovy Vary, will follow.
    Although the expansion of shopping centers will continue rapidly, Diviš emphasizes that it will take a long time for the Czech Republic to catch up with advanced Western European countries in terms of the number of modern shopping complexes. "We do not yet have such strong purchasing power. The shopping centers we are building in cities with 100,000 residents can be built in these countries even in cities with 50,000 residents," he noted.
    The growing number of shopping centers, however, has an adverse effect on their visitor numbers. Some tenants of shops in domestic shopping centers have recently begun to complain that there are not as many customers as the owners of these centers promised. Retailers are refusing to pay rent because of this, and the first disputes have had to be resolved by the arbitration court at the Chamber of Commerce.
    Diviš today warned of similar problems. "In certain localities, the number of shopping centers or their tenants having problems will increase," stated Diviš, suggesting this may lead to searching for alternative uses for shopping center premises.
    Whereas in 1996, according to Incoma Research data, there were no large shopping centers with more than 50 tenants in the Czech Republic, in 2001 there was one such center for every 1,800,000 residents. This year, there is one large shopping center for every 350,000 residents, and by 2008, this figure is projected to drop to 250,000 residents.
    The area of modern shopping centers in the Czech Republic at the end of last year, according to data from the international company DTZ, was 1.34 million square meters. From 2006 to 2008, new shopping centers with a total area of an additional 580,000 square meters are expected to be built in Prague and larger cities.
    According to DTZ data, Prague currently accounts for roughly 580,000 square meters of modern shopping centers, and the planned construction for 2006 to 2008 includes approximately another 240,000 square meters. Among the largest projects in Prague will be Arkády Pankrác (38,000 square meters), ECM City Arena (6,000 square meters), Centrum Palmovka (12,200 square meters), Palladium (40,000 square meters), and Outlet Airport Centre (48,000 square meters).
    In regional cities, the area of shopping centers in the first half of this year exceeded 800,000 square meters, of which 200,000 square meters was in Brno, followed by Ostrava (nearly 100,000 square meters) and Olomouc (65,000 square meters). The planned construction outside Prague from 2006 to 2008 is expected to comprise around 340,000 square meters of new retail space, allocated to projects such as Palác Pardubice, Plzeň Plaza, Hollandia Liberec, Exit 66, City Park Jihlava, Forum Ústí nad Labem, and Forum Liberec.
    Experts from DTZ also predict significant growth in so-called outlet centers, which offer cheaper branded goods and are currently not very widespread in the Czech Republic. The first domestic outlet center opened in 2003 in Hatě. For instance, the Devo Group is now building an outlet center with a retail area of 20,000 square meters on the 66th kilometer of the D1 highway heading from Prague. Completion of this project is scheduled for spring next year.
    The area of modern shopping centers in the Czech Republic increased last year by about one-fifth to more than 1.3 million square meters. In terms of population, there were 132 square meters of this space per 1,000 people in the republic, while the European average was 171 square meters.