Romania, which joined the European Union in June 2007, has been showing tremendous growth on an admittedly low base, said Razvan Gheorghe, managing director of Cushman & Wakefield's Bucharest office. The country's GDP growth, 6.57% last year, is projected to grow 7% in 2008. Its chief attraction is its large urban population – 55% of its 21.6 million residents live in a city, and the country boasts 25 cities with more than 100,000 inhabitants. Salaries, too, have risen (by 27% last year to 313 net euros per month), and spending power is boosted by expatriate workers sending 7.1 billion euros back.
The result is an interest in development. Romania now has 910,000 sm of shopping center space, with 1.9 million sm of new development in the pipeline."It's a promising country, and we'll deliver on what is promised," Gheorghe said.
Turkey, which already has a healthy supply of space in major cities Istanbul, Ankara and Izmir, still has opportunities in markets to the east, said Koray Özgul, CEO of developer Corio Turkey, Istanbul.
"The eastern part of Turkey and Anatolia haven't been touched," he said. "The second-tier cities are very promising."
With 171 centers already operating, another 145 centers are under construction. They will serve a population of more than 70 million, and projected to grow to 80 million by 2010. More important, 30% of the population is 14 or younger, creating the shoppers of the future, he added.
Similarly, opportunities in Portugal exist outside its major cities of Lisbon, Porto and Algarve. After three difficult years, the economy is rebounding, said Luis Pires, a general manager of French developer Ségécé in Carnaxide, Portugal. While still below Eurozone standards, the improvement in GDP growth, as well as a population of 10.6 million, have boosted development in secondary cities and the arrival of new formats.
"Through 2010, there are 800,000 sm of projects in the development pipeline," Pires said. "Shopping centers [malls] will be the main format, but we also will see the arrival of retail parks [power centers]. And developers are now looking at smaller cities in the interior."
But the newest competitor – and opportunity – may well be literally out of this world. Virtual worlds (in which real people interact in computer-based simulated environments using avatars) such as SecondLife, World of Warcraft and Habbo, have achieved the same market penetration as mobile phones, said Seth van der Meer, creative director of strategic consulting firm Sandfire Bv, Ankeveen, Netherlands. And the average user spends 10 to 20 hours per week, approximately 30% of his or her free time, in that virtual world.
"Is it possible that virtual worlds are a competition to shopping centers?" van der Meer asked. That's particularly possible since many of these worlds provide virtual items for sale, including clothing for avatars and other equipment needed to exist in that world. In fact, van der Meer estimated that one-quarter of the time spent in the virtual world involves shopping.
"World of Warcraft would be the 32nd largest GDP in the world," about equivalent to Ireland, van der Meer said. "All of that is based on purchases. Shopping malls and retailers can learn a lot from virtual worlds."
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