BR ANALYSIS. Retail sector moves to mixed-use projects

Newsroom 11/12/2019 | 11:21

With the local retail scene being very competitive and full of both large and smaller players, developers need to think outside the box and have a different approach if they want to attract more and more sophisticated consumers in Romania.

By Anda Sebesi

 

In recent years, the Romanian retail market posted the highest growth in the region and it is likely to stay on this upward trend in the next year. During this time, we have witnessed a sustained development of the retail sector, which has now reached a high level of complexity. This is due to the expansion of large retail chains and consumers becoming less interested in using traditional stores to do their shopping.

As pundits say, an increase in the standard of living and quality of life along with the advance of technology, automation and a wider range of services offered to the consumers are some of the factors which have led to this development of the local retail sector. “Retailers now have the opportunity to change their business using sustainable development models, based on the expectations of their consumers and their interaction with them,” says Oana Diaconescu, head of the leasing division at Iulius. She adds that IULIUS company’s projects are in line with this upward market trend. “The spaces we offer to retailers have increased – if we refer mainly to Iulius Mall Timisoara, a project which has been extended over the past few years, in parallel with the development of the Iulius Town mixed project. Today in Timisoara we have the largest retail area outside Bucharest, with over 450 stores on more than 120,000 sqm, which comprise unique retail concepts for the region and new international brands. This development has been imposed by a clear demand coming from the market,” adds the Iulius representative.

As Diaconescu says, all the projects developed by Iulius are leaders on the regional markets where the company operates. “They are centers of attraction even for neighboring countries because of their brand mix and entertainment offering. For example, Iulius Town Timisoara welcomes customers from Serbia and Hungary, Palas Iasi gets customers from the Republic of Moldova and Iulius Mall Suceava has visitors from Ukraine,” she says.

Making continuous investments in innovation and permanently thinking about adding new components to the project allows Iulius to maintain its position on the market. For example, creating active urban environments which meet the local community’s wide range of needs – from shopping to leisure, business, social interaction, and recreation – and maintaining permanent and close communication with its customers – are two ways to support this endeavour.

“This dialogue helps us know what the public wants and understand how to meet their needs and what should be improved. We started to develop our urban regeneration projects – Iulius Town Timisoara, Palas Iasi and Iulius Mall Cluj-Napoca, which integrate retail, office, leisure and entertainment components – considering the demand on the market,” says Diaconescu. According to her, this concept is the future in the real estate sector, and it can lead to economic growth by adding value to the local community.

 

Iulius Town comes with new brands

Since its inception, Iulius Town has been very attractive for retailers and this has been translated into a wide list of new entries for the region: Zara Home, Oysho, Intimissimi, Calzedonia, Marks & Spencer, C-House Cafe Milano, Manufaktura, V-generation, Superdry, New Era, Next (Kids), Liu Jo, Grid, Sizeer, Primigi, Vagabond, Beautik Haute Parfumerie, Taco Bell, Ted’s Coffee, Tucano Coffee, and El Unico, to name a few. “Our projects add value to the communities and hence we encourage competitive local business initiatives with a strong market proposition. Iulius Town hosts plenty of themed cafés and restaurants owned by entrepreneurs from Timisoara or the region like Daily, Sova’s, Lexico, Select Bistro Cafe, Ana Lugojana, and others. They came with unique food and beverages concepts,” adds the Iulius representative.

 

Heavy foot traffic and strong results for Iulius Town

According to Diaconescu, the annual foot traffic in the company’s projects, whether in Iasi, Timisoara, Cluj-Napoca or Suceava, exceeds 68 million visitors. “The annual foot traffic in Iulius Mall Timisoara exceeds 16 million visitors and we expect to reach 20 million after its integration into the Iulius Town mixed project. We think that for retail projects to be successful, they have to offer a mix of experiences to their customers. People no longer come to the mall just for shopping. They look for a certain lifestyle, unique events, leisure, entertainment and a place where they can meet their friends,” says Diaconescu.

She also highlights the importance of the powerful anchors, which generate increases. “In IULIUS projects, parks are the main anchors, and they offer many attractions for people of all ages. In addition, there are functions like a conference and event centre, a kindergarten and a primary school, the largest health and fitness club in Romania which will be opened this month by World Class, the VIP cinema concept with all-inclusive dinner and film, and the largest medical hub in the region which will be integrated into the tallest office building in Romania.” Last but not least, Iulius Gardens, the park at the heart of the complex, is a vibrant place where the local community meets and socialises. It has already been the host of events like open-air movies, urban art festivals, scientific experiments for the general public, sports competitions and activities for kids. During the winter, the skating rink will be the main attraction. As for financial results, Diaconescu says that the turnover generated by Iulius Town in the three months since its official opening is 21 percent higher compared with the same period of last year. “Segments like family fashion, food and beverages, and cosmetics are those which posted the highest increases. As for the traffic in the mall, it increased by 15 percent compared with the same period of 2018, except the cafeterias and restaurants with direct access from the park and the retailers from the ground floors of the three already operational office buildings,” says the IULIUS representative.

 

An everlasting place for citizens

As Diaconescu puts it, Iulius Town seems to have always been part of the lives of Timisoara citizens. “This is because IULIUS is a brand they have been attached to since 2005, the year when the company opened the largest mall outside Bucharest. It is easy to notice that the entire community embraced this project, which is a proof for us that it was an adequate one that filled a gap in the market. It became a pole of interaction and social effervescence,” she says. Plus, she adds that Iulius Town has great potential due to its positioning because it attracts clients from Serbia and Hungary (a public who is already loyal) who benefit from a shopping and entertainment offer that is wider, more interactive and better aligned with the Western trends. “We can also talk about the more than 5,000 employees who are already working in Iulius Town office buildings and who are a daily and loyal public for both the restaurants and the stores.”

 

Whats next on the retail scene?

As Diaconescu says, retail projects are becoming increasingly complex now, by adding different functions. “As we have already seen in our mixed-use projects, the big winners – both among those who operate on the real estate market and among retailers – will be those who will understand that they need to offer a complex experience to the consumer, apart from meeting their immediate needs. In my opinion, mixed-use is the watchword for the years to come. The key as a developer is to be creative when it comes to adding new functions to your projects in order to attract consumers who are becoming more and more demanding,” she concludes.

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