Real Estate: Malls
200,000 people expected to work in malls Ziarul Financiar Nov 26 2007
by Cristi Moga
Real estate developers’ aggressive expansion plans on the domestic market will have a significant impact on the labour market, as retailers will need to hire around 200,000 people to work in new stores opened within malls.
“With overall shopping centre retail space estimated to reach 2.5 million square meters over the coming years, and necessary workforce amounting to around seven employees per every hundred square metres, around 150,000-200,000 people could work in malls, on the domestic market, in the future,” says Razvan Gheorghe, managing director of real estate consulting company Cushman & Wakefield Activ Consulting.
The stock of retail space in malls stands at about 500,000 square metres, which means the number of people working in such centres stands at around 35,000. For instance, the representatives of Anchor Grup, a company that owns two malls in Bucharest (Bucuresti Mall and Plaza Romania) stated that they had nearly 5,000 people working in the two shopping centres (2,000 to 2,500 people in each), which translates into a rate of over six employees for every hundred square metres of lettable space.
“Real estate is driving the entire economy, if we take into account that it also has an impact on a lot of related markets, from cement to insurance,” Gheorghe says.
Approximately 2,000 people are currently working at Polus Center.
The companies have launched an aggressive development campaign on the shopping centres segment and the first results in terms of new malls are already showing. Around 100 mall projects have been announced for next year throughout the whole country.
“Cities like Resita, Targu-Jiu, Drobeta Turnu-Severin or Bistrita have been somewhat avoided by investors, so far. As for large cities, the projects in Bacau are quite small, and the centre of Oradea has not been tapped into, as far as we know,” says Cushman’s manager, who explains the situation of the cities where there is still room for investments in real estate projects.
With a few exceptions, the market will be saturated within the next five years and oversaturation will be the exception to the rule. “It is illogical to have a number of malls outside the city that share the same tenants.”
Activ Consulting was established in 1993 and after having operated as an affiliated office of Cushman & Wakefield for a number of years, it was taken over by the latter in December 2006.
“Turnover in the first year after takeover by Cushman & Wakefield increased by 50 percent to 4-4.5 million euros, according to the yearend estimates. At the same time, we doubled our team from 30 to 65 employees. The company’s goal for next year is to boost business to 7 million euros,” says the 40-year old consultant.