Crisis, according to experts, will slow down the construction of shopping centers in the Czech Republic

Prague - According to experts, the global economic crisis will slow down the expansion of shopping centers in the Czech Republic, which have been growing like mushrooms after the rain in recent years. Developers now have worse access to bank loans, and therefore some planned projects are unlikely to come to fruition. Currently, around 270 shopping centers of various sizes operate in the Czech Republic.
The managing director of the analytical company Incoma Research, Tomáš Drtina, said today at the Retail Summit conference in Prague that last year, 20 shopping centers and 15 hypermarkets were opened in the Czech Republic. By the end of 2008, however, due to the financial crisis, the first projects had already been suspended. "Banks halted financing for dozens of projects," Drtina stated. Jan Koutný from Tesco Stores ČR also complained today about the worse access to loans. "It’s a problem to get loans. There is a lack of money and loans are expensive," Koutný pointed out.
Because many shopping centers are at various stages of construction, according to Drtina, the cancellation of projects will reflect in the availability of retail space only after some time.
In 2008, according to data from the consulting firm Cushman & Wakefield, 60 percent of the originally planned shopping center area was built in the Czech Republic. Of the total 250,000 planned square meters in 14 large centers, nine shopping centers with a total area of about 150,000 square meters actually opened. For 2009, developers are planning to build even fewer retail centers.
According to a study by the consulting firm CB Richard Ellis, there is 1.83 million square meters of large shopping centers in the Czech Republic. Since 2004, this number has nearly doubled. The year 2008 was the third strongest year in history in terms of overall completed areas.
"The year 2009 will be very weak with 110,000 square meters of newly supplied area and comparable to 2003. The projection for 2010, which is 250,000 square meters, is significantly higher, but it can be expected that many projects will be postponed due to the current situation and possible financing issues," noted Paulína Husová from CB Richard Ellis.
Behind the expected downturn is also the fact that there is practically no city in the Czech Republic with over 50,000 people that does not have a shopping center, or where developers have at least not introduced plans to build one. Thus, the era of filling in the white spots on the map is reportedly slowly coming to an end, and each additional center will represent direct competition to another, usually already established project. One of the trends will be the end of construction on the outskirts of cities; developers are reportedly shifting their focus to city centers.
Some shopping centers in Prague are already struggling with a low number of shoppers due to increasing competition, poor location, or the composition of stores. Retailers dislike low foot traffic and often sue the operators of shopping centers, demanding a reduction in rent. The arbitration court at the Chamber of Commerce is resolving several dozen similar disputes.