Shopping Centres Refurbishment and Redevelopment

Shopping Centres
Refurbishment and
Redevelopment
Our competences
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DTZ Refurbishment and Redevelopment 1

Contents
The future for shopping centres in Europe 3
The opportunity 4
Refurbishment or redevelopment 5
Key stages of the process 6
Examples of completed projects 7
Shopping centre redevelopment Piast, Poland 8
Shopping centre redevelopment Regent Arcade Cheltenham, UK 9
Shopping centre redevelopment Forum Steglitz, Berlin 10
Our services 11
2 DTZ Refurbisment & Redevelopment

The future for shopping centres
in Europe
Maintaining the quality of place
Today’s consumers expect shopping centres to deliver not only high quality but
also added value. As well as demanding a wide variety of stores, they want to
be able to spend their leisure time in attractive surroundings and be entertained
and inspired. Shopping centres are a public space at the heart of communities.
This is why it is increasingly important to deliver the right combination of stores,
entertainment and restaurants.
A critical factor in the success of any centre is the quality of space on offer.
With growing competition for tenants, creating the right space in the right
location is critical if owners wish to maintain or improve their market position
and thus their cash flow. Maintaining high quality means adapting to changing
economic, social, technological and sometimes political conditions.
Refurbishment and redevelopment are important interventions to prolong the
lifecycle of a shopping centre. We at DTZ understand shopping centres and can help
deliver the best results.
Shopping Centres Refurbishment and Redevelopment 3

4 Shopping Centres Refurbishment and Redevelopment
The opportunity
In Western Europe where there is a long tradition of shopping centres, the
amount of new space delivered has been shrinking and now constitutes only a
small percentage of supply. Many owners of centres 15 or more years old intend
to refurbish or redevelop in order to raise their standards and increase revenues.
We estimate that in France and Germany alone close to 50% of existing centres
(12 million sq m of commercial space) will be subject to refurbishment and
redevelopment in the coming years.
This trend is also a result of the changing strategies of large retailers. Rather
than covering the largest possible geographical area with a network of stores, as
was the case before the economic crisis, they are now focusing on the biggest
commercial centres in the best locations. In order to attract tenants, shopping
centres must offer high quality commercial space and be able to deliver
significant footfall.
Whilst the move towards refurbishment and redevelopment could be seen as
a temporary consequence of the financial crisis, we believe it is a permanent
trend that will become increasingly evident in the market. Many centres that were
built in good locations in the first half of the nineties now require investment to
continue to generate high revenues, and both the cost and investment risk of
refurbishment and redevelopment can be more favourable than the construction
of a new centre.
The most important goals of the processes of refurbishment and development
are to:
• Increase the value of the retail space
• Improve the functionality of the facility and deliver high quality, safe public areas
• Reposition the facility in the market through its development and change
of tenant-mix.

Refurbishment or redevelopment
The major areas of refurbishment
and redevelopment are as follows:
• Architecture and planning
• Interior design
• Mechanical and electricity
• Environmental engineering
• Cost management and appraisals
• Project management
• Tenant co-ordination
• Marketing.
Refurbishment
Refurbishment is the renovation of
an existing shopping centre. It is
creating public spaces appropriate
to the contemporary customer along
with bringing technical specifications
up to modern standards such
as safety, electrical installations,
escalators and lifts.
The project is likely to involve
introducing new retailers. This may
require reconfiguration of space and
moving existing tenants.
The goal of the refurbishment is to
retain the tenants in the centre and
maintain market position.
Redevelopment
Redevelopment is a much wider
process, which aims to reposition
the centre, increasing its reach and
improving its market position. This
often includes a thorough overhaul of
the facility and can include the building
of additional space.
Redevelopment is a more serious
investment that can cause disruption
for tenants occupying the centre,
sometimes making it impossible for
them to conduct their business for the
duration of the construction works. It is
very important to carry out an in-depth
analysis and to plan the entire process.
Some changes may be forced by
shifting legal conditions – in the area
of safety for example – and that such
changes will not translate directly
into an increase in value or lower
maintenance cost.
Shopping Centres Refurbishment and Redevelopment 5

PURPOSE
Key stages of the process
AUDIT AND ‘VIP’
REPORT
1
To demonstrate to
clients why they
should consider
undertaking work
on their centre and
to show what their
options might be.
These are likely to be
one of the following:
1. Refresh
2. Remodel
3. Redevelop
DESIGN
SCHEME
To work up the
selected option to a
high level of detail,
including drawings,
costs, timing,
appraisals and tenant
re-engineering.
6 Shopping Centres Refurbishment and Redevelopment
PROCUREMENT
MONITORING / REALISATION
LEASING / MARKETING
2 3 4
To carry out a
procurement exercise
to put together the full
team of consultants,
contractors and
suppliers needed to
execute the plan.
To carry out periodic monitoring of the detailed
design and construction process to ensure the
agreed plan is being delivered on site.

Examples of completed
projects
• Regent Arcade in Cheltenham, UK – Canada Life
refurbishment and frontage redevelopment.
• Forum Steglitz in Berlin, Germany – Hammerson GmbH: market
analysis, leasing, refurbishment without closing the centre, new marketing
campaign.
• Sarni Stok in Bielsko Biała, Poland – ING REIM
Decreasing Carrefour space and providing units for C&A, New Yorker,
CCC.
• Sarni Stok in Bielsko Biała, Poland – ING REIM
Changing former Galeria Centrum space into unit for TK Maxx.
• MOLO in Szczecin, Poland – ING REIM
Tenant co-ordination during refurbishment and shopping centre extension.
• Wars, Sawa, Junior in Warsaw, Poland – ING REIM co-owned with CDI
Refurbishment of former Galeria Centrum space into units for
Marks & Spencer, Reserver and TK Maxx.
• Galeria Pomorska in Bydgoszcz, Poland – Balmain
Reducing the size of Carrefour and building two fashion units and key turn
pharmacy. New unit for McDonalds.
• Galeria Pomorska in Bydgoszcz, Poland – Resolution
Internal refurbishment, changing the size and shape of retail units.
• Galeria Bemowo in Warsaw, Poland – Bainbridge
Building kids play unit and shopping centre management office.
Our clients
Bainbridge
Balmain
Canada Life
CRI
Hammerson GmbH
ING REIM
Resolution
Unibail-Rodamco
Shopping Centres Refurbishment and Redevelopment 7

Case study
Shopping centre redevelopment
Piast, Poland
Project: Piast Shopping Centre
Owner: ING Real Estate Investment Management
Location: Szczecin, Poland
Opening: November 2000
Managed by DTZ: from March 2006
Number of tenants: 37
Main tenants: Media Markt, Carrefour, Drogeria Natura,
Deichmann, CCC, Komfort
Situation before redevelopment
• Lease area 25,767 sq m
• Majority of local tenants
• Poor interior design
• Lack of national and international chain fashion retailers
• Low attractiveness of the building for potential tenants
• Drop in footfall in the centre
• Poor awareness of ‘Piast’ brand
• Lack of entertainment offer
• Significant increase of number of competitive centres in
the nearest future
• Auchan – very well merchandised hypermarket together
with its shopping gallery
• Media Markt is the strongest draw
• Food court only with local operators.
8 Shopping Centres Refurbishment and Redevelopment
Main goals
• Optimising the retail space and centre functionality
• Developing modern space for major retailers
• Developing integrated and defined tenant mix based on
new letting strategy including strong fashion brands
• Creating new branding for Piast SC
• Renegotiation of leases with the exclusivity clauses in
order to develop proper tenant mix
• Negotiating long term leases.
Results
• Additional lease space of 3,000 sq m
• Decrease of Carrefour space and re-design of the unit
• Re-design of the shopping centre layout to be more
transparent and convenient for the clients
• 40 new shops in the shopping mall gallery with modern
fit-out
• New, strong anchor tenants such as TK Maxx, H&M,
Cubus, New Yorker, Reserved, Cropp, House,
Home & You, Douglas, Burger King
• Tenant-mix improvement with well known international
brands for fashion, health and beauty, kids and services
categories
• Remodelling of internal design: new colour scheme,
green areas, rest areas, new shop fitting
• Remodelling of external design: new facade, new panels
for tenants logo, re-design of road access
• New marketing strategy including the new image, new
shopping centre name and logo – Molo - and activities
increasing brand awareness.

Case study
Shopping centre redevelopment
Regent Arcade Cheltenham, UK
Project: Regent Arcade, Cheltenham
Owner: Canada Life (long leaseholder)
Location: Cheltenham, UK
Opening: November 2009
Managed by DTZ: from 2002
Number of Tenants: 68
Main Tenants: anchor – BHS with over 60 stores
and 7 restaurants
Situation before redevelopment
• Centre suffers from poorly designed entrance atrium and
low ceilings with poor quality finishes and restricted daylight
• Units towards front of the centre are poorly configured
with low visibility from the high street into the main arcade
• Ongoing requirement in the town from national retailers
for flexible and well configured space; existing units are
too small and lacking depth
• Risk of losing tenants to the nearby Beechwood Shopping
Centre thus restricting trade and future rental growth.
Main goals
• Refurbishment and frontage redevelopment
• To refurbish and redevelop the existing shopping centre
to provide high quality retail space to anchor the front
of the scheme with a view to maintaining the scheme’s
dominance within the town and ensure its long term viability
• To provide the client with management and leasing
advice as well as advising on the negotiations with the
council to secure a regear of their headlease.
Results
• Planning permission for a new frontage has been obtained
• This involved significant consultation and design work
to ensure that the development was appropriate for the
historic town centre
• DTZ advised on the commercial aspects (feasibility,
viability, leasing and design development) of the frontage
redevelopment to ensure that the highest quality retail
units were designed having regard to the potential to
change and subdivide the space to provide as much
future proofing as possible
• DTZ provided the client with management and leasing
advice as well as advising on the negotiations with the
council to secure a regear of the headlease.
Shopping Centres Refurbishment and Redevelopment 9

Case study
Shopping centre redevelopment
Forum Steglitz, Berlin
Project: Forum Steglitz, Berlin
Owner: Hammerson GmbH
Location: Berlin, Germany
Opening: after refurbishment May 2007
Managed by DTZ: January 2002 - March 2009
Number of tenants: 63
Main tenants: H&M, Esprit, Karstadt
Situation before redevelopment
Why refurbish the Forum Steglitz?
• Competiveness of centre decreased within the years
• The shape and size of the units no longer matched the
demands of the retailers
• Few new retailers and poor lease terms
• Growth of competitive retailers and shopping centres in
the neighbourhood and catchment area
• Change of the purchasing/shopping habits of the
customers
• Old building structure, not customer-friendly and modern
• Timeline: good timing because of leases expired
• Retailing on five floors with poor circulation.
10 Shopping Centres Refurbishment and Redevelopment
Main goals
• Increase of rental income - securing of return of
investment
• Improved energy efficiency
• Reducing service charges for tenants and owner
• Co-ordination of planning and construction works
• To keep the centre opened during refurbishment work
• To provide marketing during constructions works to
inform customers.
Results
• Step by step refurbishment without closing the centre
• Analysis of refurbishments goals, target groups, possible
equipment
• Analysis of letting market, demands of tenants and
potential tenants
• Analysis of footfall, customer habits and demands
• Analysis of current leases (e.g. rents, durations, break
options, service charge agreements )
• Refurbishment agreements, short-term agreements and
termination agreements with tenants
• New lettings, owner covered buildings costs for tenants
• New marketing for the centre, newly developed logo.

Our services
DTZ provides unique solutions to increase the value of
shopping centres using a combination of local expertise and
global knowledge.
We understand that people create the strength of any
company, which is why we hire the best professionals to
deliver exceptional service and support our clients’ longterm
success.
• Property and asset management
• Agency – retail and leisure, office and industrial
• Investment consultancy
• Land and development consultancy
• Consulting and research
• Project and building consultancy
• Valuation and appraisals
• Hospitality.
Contacts
Martyn Chase
European Retail Sector Head
+44 (0)20 3296 4232
martyn.chase@dtz.com
Thomas Willekens
Belgium
+32 (0)3 303 10 09
thomas.willekens@dtz.com
Petr Sulc
Czech Republic
+420 234 262 210
petr.sulc@dtz.com
Jean-Philippe Carmarans
France
+ 33 1 47 48 77 24
jean-philippe.carmarans@dtz.com
Martin Lange
Germany
+49 (0)30 201705 541
martin.lange@dtz.com
Cuno van Steenhoven
Netherlands
+31 30 60 222 11
csteenhoven@dtz.nl
Patrick Delcol
Poland
+48 (22) 222 31 00
patrick.delcol@dtz.com
Razvan Sin
Romania
+40 21 310 3100
razvan.sin@dtz.ro
Maria Krumlinde
Sweden
+46 8 671 34 93
maria.krumlinde@dtz.com
Hugh Radford
UK
+44 (0)20 3296 4179
hugh.radford@dtz.com
Shopping Centres Refurbishment and Redevelopment 11

Property management and project management
DTZ is a leading global real estate company with over 4,700 professionals
in 145 cities in 43 countries. Our portfolio comprises over 30 million sq m of
properties under management with over 60,000 leasehold and freehold interests.
We were the first real estate adviser to be listed on the London Stock Exchange
in 1987.
DTZ manages more than 250 retail schemes in Europe. Our global team is united
by a single focus: to deliver exceptional service, rooted in a deep understanding
of our clients’ needs and a commitment to their long-term success. We call this
Bringing You the Power of One – offering deep knowledge of local markets
together with the best of our global expertise.
Our professionalism has been proved by numerous awards and by our clients’
ongoing satisfaction.
www.dtz.com
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