CEDER 2024 in review: The future of retail

During their presentation held at the beginning of CEDER 2024, CBRE spoke of a revival of retail spending growth, with CEE countries and Romania amongst the top performers. They also noted that there is a shift of development focus from shopping centres to retail parks, with retail parks gaining traction in secondary and tertiary cities. Another important piece of information they gave the audience was the fact that retail that drives experience is performing best in the market at the moment.

Later, during the Future of Development panel, when asked about the current trends of the market, Silviu Stratulat, Managing Partner of Stratulat Albulescu Attorneys at Law, confirmed that there is a lot of interest in retail on the market, and especially into retail parks, which can address smaller communities. He added: “And it's very easy to deploy, it's very easy to attract tenants and (…) to create a hub (…). That is what makes the retail park very attractive.”

Marius Barbu, Group Asset Director at NEPI Rockcastle, expressed his view that in retail, it is essential to create “community hubs that are built around retail and exchange between people; [this] has been for years and for ages a human activity.” When asked whether online shopping was a danger to the traditional retail business, he said that it has been proven that online is just another channel, which will coexist with the traditional channel. “It's a channel that is relevant for some types of customers and (…) retail branches. For the foreseeable future, [there will] always be the need for personal interaction.” He also expressed his opinion that online shopping is more problematic when it comes to ESG: “People are ordering ten times more or two times, three times more than they need. They test it at home, then they send it back, which is quite expensive and not so good for the environment.”

Talking about the differences between shopping centres and retail parks, Łukasz Komierowski, President of the Management Board of Redkom Development, explained that, in his opinion, building retail parks is not only easier to do, but has plenty of advantages: “They are definitely economically more interesting for the tenants. There is a huge gap of the costs of the service charge.” He added that, when tenants are looking for new locations to expand, retail parks are a good direction to take: “You can really dynamically grow your network within 20, 50, 100 locations here, which you can't get with the shopping malls.”

To continue this idea, and talking about the future of development in retail, he said that he believed in downsizing. “I think the tenants would look for smaller companies. They would look for more units, will go further, deeper in the country, closer to the customers, closer to the clients, closer to the homes, which again is easier for retail parks. They are smaller. So, you can get in smaller towns. You don't need such a big scheme or the purchasing power [of] a huge town.”

Confirming the information provided by CBRE, Komierowski explained that the future of retail revolved around the idea that people need experience. “They would need to not just go shopping. They need to have some additional features. They need to have pleasure; they need to have fun.”

Regarding the future of retail, Marius Barbu said it is important to think about what the customer wants and to be flexible enough to integrate services and functions which were not traditionally included in retail parks and shopping centres.