"Green fields" for shopping centers are decreasing, brownfields are on the rise

Prague - There is a growing shortage of available land for new commercial and retail centers around Czech cities. The number of greenfield developments is thus decreasing. The price of available land has risen year-on-year on average by 22 percent. Consequently, interest in sites of old factory halls and complexes, known as brownfields, is increasing. The results of an analysis focused on the supply of available land for the construction of commercial and retail centers were announced today in a press release by AAAIndustry.
    "In terms of demand for land for the construction of commercial and retail centers, it is becoming increasingly difficult to secure. There are very few areas designated by the zoning plan for this purpose, if any at all, and greenfield developments are practically no longer emerging," described the situation the Director for Strategy and Development of AAAIndustry, Břetislav Cieslar. And even when greenfield developments do occur, they are very rare. Alternatively, they arise on plots that investors would have overlooked just two or three years ago, he added.
    "In our opinion, the potential for large shopping centers on greenfield sites is largely exhausted. There are existing regional shopping centers, around 50,000 square meters of rentable space, which serve as a natural magnet for people from the surrounding area within tens of kilometers," said Oldřich Špůrek, the director of the Czech subsidiary of the investment and development company Meinl European Land, to ČTK. The company is, among other things, a major owner of shopping centers in the Czech Republic. New projects, according to him, must already encounter problems with demand, traffic accessibility, and customer reachability.
    In this situation, investors are increasingly turning to old factory halls and complexes, so-called brownfields. A brownfield is a plot of land or a building that is not effectively utilized, is neglected, and in many cases contaminated. The property cannot be used without revitalization, which often incurs costs in the tens or hundreds of millions of crowns.
    The state has therefore been financially supporting the regeneration of these sites in recent years. For the years 2007 to 2013, the Czech Republic has approximately 14 billion crowns available from European Union funds for projects related to business properties and the remediation of old environmental burdens.