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The Warsaw Voice » Real Estate » October 27, 2011
The Real Estate Voice
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Long-Term Planning is Key
October 27, 2011   
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Renata Kinde-Czy¿, member of the management board at Metro Group Asset Management, talks to Witold ¯ygulski.

Last year, Metro Group Asset Management became the manager of the Magnolia Park shopping center in the southwestern city of Wroc³aw. The center, which was in poor condition at the time, was recently named the Shopping Center of the Year in the second Retail Awards competition held by the Polish Council of Shopping Centers (PRCH). Magnolia Park also topped the Rzeczpospolita daily’s league table of Wroc³aw shopping centers in terms of service quality. How did you manage to achieve this spectacular success within such a short time?
It is without a doubt the result of hard work by all the members of our team and the strategy our company pursued on this project. The marketing policy of the shopping centers, their tenants, volume of sales and relations with the local community were the criteria taken into account by PRCH in granting the award. As regards the marketing policy, it is part of the strategy we work out for each facility. First, we conduct due diligence to examine the existing state of affairs. Then we identify areas where improvement is needed and start to carry out our program. In the case of Magnolia Park, we completely changed the marketing strategy, advertising strategy, methods of communication, and the events strategy for the center. As regards the tenants, we managed to raise their sales by 10 percent in a year. Meanwhile, in the first three quarters of 2011 average sales of Polish shopping centers dropped by 1 percent, according to PRCH data. So it was an excellent result. Additionally, we introduced new tenants to the center in a move that increased its attractiveness and expanded its range of products and services.

Speaking of relations with the local community, we offered theater plays and summer theater workshops for children. We used the mini-amphitheater in front of the Magnolia Park building for this purpose. We also took part in campaigns to support flood victims, blood donation campaigns and campaigns to help terminally ill children. Another issue is the expansion of the center to include a Castorama hypermarket and a H&M store. As a result, the center’s rentable space will increase by almost 12,000 sq m.

Metro Group Asset Management manages all the M1 facilities which were among the first to appear in Poland after the change of the political and economic system in 1989. What do you do to make these facilities stay competitive with regard to new shopping centers?
Since M1 is a chain there are obviously many common elements in our strategy, but we treat each center in an individual way. We assess its market position, the purchasing power of the local population, competition on the local market, planned investment projects, employment, unemployment and many other factors. On the basis of this study, we create a development strategy for the center. We want the owners, tenants and customers all to be satisfied. For the tenants we organize numerous campaigns designed to boost their sales. For the customers we organize campaigns rewarding those who do their shopping in our centers. Additionally, we are expanding our centers one after another to widen the range of products and services they offer.

What, in your view, are the most important features of a good shopping center manager?
The facility manager definitely plays a key role for the customers, tenants and the owner of the center. What is needed in order to be successful and make the center attractive to all three interest groups is above all long-term planning. The manager has to look carefully at what takes place around the center—the situation in the country as a whole, developments on the local market, and existing trends. The manager has to act wisely, always trying to make life easier for tenants and help them to reach their goals. Special care should be taken to keep the costs of shared space down because these costs are in practice as high as the rent itself. In the M1 chain, despite this year’s increases in real estate tax, insurance expenses and utility bills, we again managed to cut costs by around zl.1 million. Openness and communication skills are other features of a good manager. The more the interested parties work together, the more successful we are.

How do you think Poland’s shopping centers will develop in the years to come?
Today, the market is highly saturated. Looking at statistics, over the past decade the size of Poland’s shopping centers has increased almost threefold in terms of square meters per head of population. Considering that the purchasing power of the population is now lower owing to the crisis, I do not expect many new shopping centers to be built in the near future. Instead, I think, in a new trend, the market will undergo segmentation, with a clear division into premises of different categories. We are also likely to witness the expansion of some new chains, which have long been announcing plans to enter the Polish market. And I hope that more centers will be offering products designed specifically for children.
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