The construction of shopping centers slowed down in the Czech Republic last year

Prague - In 2008, 60 percent of the originally planned area for shopping centers was built in the Czech Republic. Out of a total of 250,000 planned square meters across 14 centers, nine shopping centers actually opened with a combined area of around 150,000 square meters. For 2009, developers are planning to build even fewer retail centers. This is indicated by the results of statistics published today by the consulting company Cushman & Wakefield.
    "There have always been delays in opening shopping centers, whether the reasons were technical, caused by delays in construction, or administrative, caused by delays in obtaining various permits. Last year, the global financial crisis added to these factors," said Martin Žížala, head of the retail team at Cushman & Wakefield.
    However, the expert does not directly link last year's slowdown in the construction of retail centers to the financial crisis. According to him, the planning and construction of a shopping center takes an average of three to four years. "It is therefore clear that the centers that were planned to open in 2008 had their financing secured long before the outbreak of the crisis. If the opening date of some projects was pushed from fall 2008 to spring 2009, the main reason can be sought in technical conditions," Žížala stated.
    The total area of shopping centers in the Czech Republic exceeded 1.9 million square meters last year. In terms of the area of shopping centers per 1000 inhabitants, however, the Czech Republic ranks just below the EU average. While the EU had 200,000 square meters of commercial space per 1000 inhabitants in July 2008, the figure in the Czech Republic is 186,000 square meters. On the other hand, the Czech Republic exceeds the values of other countries in Central and Eastern Europe. For example, in Slovakia, only 137 square meters of retail centers were available per 1000 inhabitants last year.
    Last year, the Czech Environmental Information Agency CENIA recorded 55 new proposals for the construction of shopping centers of various sizes in the EIA system. In 2007, there were 50. At the beginning of last year, more than 250 shopping centers were already operating in Czech cities.
    However, 2009 could be even leaner in terms of shopping center construction than last year. "In 2009, developers are currently counting on opening new centers with a total area of about 110,000 square meters, which would represent one of the lowest values since this format was introduced to the Czech market in 1997," said Alexander Rafajlovič, head of the market research department at Cushman & Wakefield.
    According to him, behind the expected downturn is also the fact that there is now practically no city in the Czech Republic with more than 50,000 people that does not have a shopping center, or where developers have not at least presented plans to build one. The period of filling in the white spots on the map is reportedly slowly coming to an end in the Czech Republic, 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 edges of cities; developers are said to be turning their attention more toward city centers. Large projects will continue to decline. For example, in downtown Prague, up to 150,000 square meters of new retail space should be created in the next five years, both in new shopping centers and in arcades.
    Some shopping centers in Prague are already struggling with low foot traffic due to increased competition, poor location, or a lack of suitable shops. Tomáš Drtina, managing director of the analytical firm Incoma Research, estimated that in the coming years, there will be dozens of little-visited shopping complexes in the Czech Republic.
    According to Drtina, an important factor will be whether these less successful shopping centers have a long-term investor who will support the project and try to make the retail offer more attractive. Otherwise, there is a risk that some shopping centers may turn into storage facilities, auto showrooms, or office complexes.
    Due to a lack of customer interest and declining revenues, retailers are increasingly suing shopping center operators and seeking, for example, rent reductions. The Arbitration Court at the Chamber of Commerce is resolving dozens of such disputes.

    The most significant new shopping centers in the Czech Republic opened in 2008:

City	Name of the center	Area (m²)
Prague	Arkády Pankrác	38,000
Jihlava	City Park Jihlava	26,000
Kladno	Centrum Oáza	17,800
Most	Central Most	17,373
Pardubice	Palác Pardubice	16,000
Zlín	Zlaté Jablko	12,500
Prague	Galerie Fénix	11,165
Kolín	Futurum Kolín	10,000
Total area	#?-:nbsp;	148,838