22 June 2004 05:40
European Mall Giant Opens Shop in Moscow
The general manager of ECE's new Moscow operation, Stefan Zeiselmaier, is confident that his company will be
able to do good business in Russia.
Eyeing Russia's booming retail market, Europe's largest developer and operator of shopping centers, ECE
Projektmanagement, will open its Moscow office next month.
In an interview in the small downtown office -- still slightly smelling of fresh paint --which is to have its
official opening on July 15, Zeiselmaier said that Russia is "one of the most important markets for ECE
today."
"As the market is becoming more and more professional, local developers are becoming interested in professional
shopping-center management," he said.
Hamburg-based ECE has 76 shopping centers under its management and 13 more currently under construction in Germany,
Austria, Switzerland, Poland, Czech Republic, Hungary, Turkey, and Qatar. The company is owned by Germany's wealthy
Otto family.
ECE specializes in large shopping centers, but also engages in the redevelopment of railway stations, as well as in
the construction of office centers and logistic parks. The combined floor space of ECE's various retail projects is
2.2 million square meters and they have 7,200 tenants.
No turnover figures for ECE are available, but the shopping centers under its management generated about $8.4 billion
in sales last year. The company owns, either partially or completely, only about half of the 76 shopping centers it
operates, Zeiselmaier said.
ECE offers all the services needed to develop a shopping center -- from concept development and architecture to
marketing, leasing and management.
"It is a long-term business for us. We want to stay, and not just fly to Moscow once in a while to say
'hello, we are here,'" Zeiselmaier said, adding that ECE will be sending its Russian staff for lengthy
training programs in Germany and other countries.
However, Zeiselmaier stressed that ECE was not planning to construct its own projects over the next two years, but
would concentrate on the management of shopping centers for its local partners.
"We do not want to be investors in Russia just now. We only see ourselves as a service company that offers its
shopping center know-how," he said.
The growing maturity of the local market played a key role in ECE's decision to expand its operations further
east. The company will initially concentrate on Moscow and St. Petersburg, but the regions are also proving to be
"very interesting."
"Several years ago, shopping centers were only an investment for two to three years. Everybody was speaking in
very short terms -- but now it is really changing and people want to have shopping centers that are successful over the
next 10 years at least," Zeiselmaier said.
He added that as the market continues to grow -- by the end of 2005 the amount of retail space in Moscow is expected
to double -- shopping centers that do not meet certain standards will not be able to compete with more professional
malls and will either go bankrupt or would have to be converted for other uses.
"Today, you can still make money with shopping centers that don't have the best locations or the best
tenant base, but in five years when we will see the new generation [of shopping centers] they will be empty," he
said.
Zeiselmaier could not say specifically how many projects ECE would like to have under its management in Russia, but
said that the company was already conducting studies for "Russian investors" and was in concrete discussions
for "at least five very big projects."
A realtor source said that ECE has expressed interest in the ambitious $350 million retail project to be built under
Ploshchad Vosstaniya in St. Petersburg.
Market specialists see ECE's expansion in Russia as yet another sign of the retail market's dynamic
development.
Ilya Shershnev, a development director at Swiss Realty Group, said that ECE, which is known for its large-scale
projects, will follow the market trend of Moscow shopping centers' growing size, set by the likes of the Atrium and
Mega malls.
"Russian consumers have long been used to shopping in large complexes -- it is only the format that is changing.
It used to be open-air markets and fairs with hundreds of stands, now it is hypermarkets with hundreds of shops,"
Shershnev said. "I am confident that a company that has numerous professionals in [shopping center] architecture
and construction, will be able to build exceptional projects in Moscow, such as the Altmarkt-Galerie in
Dresden."
At the Exhibition of Real Estate Professionals in Cannes last March, ECE, which operates four shopping centers in
Turkey, had a Turkish-themed stand, complete with traditional pastries and girls dressed in national costumes.
"But next year it has to be Russian music, Russian dancing and Russian food," Zeiselmaier joked.
.TX-..**********************************************
[The Moscow Times] |
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