Warsaw's malls look on the bright side

Jarosław Pierzchała: Galeria Mokotów is one of the first shopping malls in Warsaw. How did the appearance of subsequent malls affect its popularity?

Janusz Stupkiewicz: It did affect the popularity to some extent. When we opened Galeria Mokotów in 2000 it was practically the only third-generation shopping center in Warsaw. The opening of Wola Park and Blue City did not change anything. Then Arkadia appeared and, due to its mass-scale character, became a more-often visited shopping center than Galeria Mokotów, which had previously been the most visited mall in Warsaw. What is noteworthy is that Arkadia did not take away the image of Galeria Mokotów, which is still the leading "top of the head" brand according to responses people give when asked to name a shopping center.

JP: How does Galeria Mokotów distinguish itself from all of this new competition?

JS: The main characteristic which can be easily noticed is the tenant mix. Galeria Mokotów is practically the only large mall in Poland which has stores of the best fashion brands, such as Versace, Max-Mara, Marella and others.

JP: Galeria Mokotów is very popular with expats. Do you run any marketing initiatives which target this particular group?

JS: We have had campaigns in hotels and in the in-flight LOT [Polish airlines] magazine. However, the main reason for its popularity [among expats] is the location near office buildings as well as its proximity to Wilanów and Konstancin-Jeziorna, which are considered enclave areas for expats.

JP: Will Galeria Mokotów undergo any more expansion?

JS: There has been one large and one small expansion. Currently we are planning two more small expansions. We also have a large project in mind, but it is too early to talk about it. We definitely haven't said the last word.

JP: It seems that the market for large shopping centers has reached the level of saturation in Warsaw. Would you agree?

JS: At the moment it seems that there are enough of them. However, some are not doing very well and any new shopping center would weaken their position. The saturation is temporary - the population of Warsaw is rising quite dynamically and so are the salaries. There will certainly be space for more than one large shopping mall in a few years. Tenants are still desperately looking for spaces in large malls in Warsaw because they know that in a few years when that market is worth a lot it may be too late to enter.

JP: What are Unibail-Rodamco's plans for Poland as a whole?

JS: The philosophy of Unibail-Rodamco is that it should reach a dominant position in whichever country where it operates. We are trying to reach that position in Poland. We are interested in taking over dominant centers in dominant locations.

JP: There are many smaller shopping malls springing up in mid-size cities. Are you interested in these as well?

JS: We don't want to scatter across the country and build a vast network of small malls, but rather a small network of large malls.

JP: Unibail-Rodamco is also present in other CEE countries. How would you compare those markets to the Polish market?

JS: As far as CEE countries are concerned, our most significant presence is in the Czech Republic. The two markets are comparable, but there are some significant differences as well. There is a slightly different approach to consumption, different price levels of goods and services as well as different rental prices. Here, you can really feel that we live in a country with a population of 40 million. There is more social pressure connected with these kinds of investments. The prospects for retail business in Poland are also much better than in other countries of the region. But it is not a place to make quick and easy money. If somebody wants to do that, they have to go to the Baltic states or Ukraine.

JP: Is Unibail-Rodamco interested in other sectors as well?

JS: If we see an investment opportunity in offices or conference centers - that's what our company focuses on in France - we will definitely consider it. However, we specialize in managing large shopping centers.

JP: Is buying a shopping center a goal in itself?

JS: When you buy a shopping center you don't do just buy it for the sake of owning it, you do it to increase its value. There is no ideal shopping center. There is always something that can be done better. In the end, the source of a shopping center's value is smart and active management. This is exactly how we manage our properties. It starts with renovation and changes in the overall physical appearance. Then there is the tenant mix and the right selection of tenants. In the end, the marketing strategy and communication are of immense importance. All these are meant to increase the value of the property.

JP: How did the appearance of Złote Tarasy - which Unibail-Rodamco also partially owns and manages - affect the popularity of Galeria Mokotów? Have you not created competition for yourself?

JS: Not really. The two shopping centers differ in many aspects. Both have a similar size, both have cinemas and a small supermarket, but this is where the similarities end. The dominating assortment in Galeria Mokotów is fashion. High fashion is especially what gives it its identity. In Złote Tarasy we can see the domination of restaurants and all aspects that are associated with lifestyle. For us Galeria Mokotów is fashion and Złote Tarasy is lifestyle. This can be seen in our marketing communication. Złote Tarasy is a meeting point and Galeria Mokotów is where people go to look for fashion.