Robert Yahav, CEO of Big CEE Srbija - Shopping center in Novi Sad opens early October 2012

- Construction of a 40,000-square-meter shopping center in Novi Sad, which was started by Big CEE Serbia in June 2011, is going as planned, and we expect it to open at the beginning of October 2012 - Robert Yahav, CEO of Big CEE Serbia, reveals at the beginning of his interview with eKapija.

In the capital city of Vojvodina, this Israeli company is finishing the construction of a shopping complex comprising a retail park and a shopping center, which will also include a parking lot for 1,500 cars. The complex is situated in the vicinity of the Novi Sad Dairy, and its construction and equipping will cost a total of about EUR 50 million. The main contractor is Krusevac-based Tehnogradnja.

- By opening this shopping center, Big Cee Serbia will enable the employment of much more than 500 people who will be working at the stores of: DIS, C&A, DEICHMANN, NEWYORKER, TAKKO, HOME CENTER, TREFF SPORT, BIGBANG, and in the maintenance and cleaning of the complex, as a security, etc. BIG shopping Center in Novi sad will be the biggest employer in the Novi Sad region – says our interlocutor.

eKapija: What are the specific features of retail parks and how do they differ from other shopping centers and similar facilities?

- The concept of retail parks is mainly focused on retail space that is usually built on main roads, near entrances to a city, with an exceptionally large free parking lot. Retail parks are outdoor facilities that are usually U-shaped.

A half of the complex that we build in Novi Sad is intended for a retail park, whereas the other half will serve as a classical shopping center. The retail park will host anchor tenants whose stores will be larger in size. There will primarily be HYPER MARKET, Do-It-Yourself stores, Fashion stores.

(future look of the Big Cee complex)

Retail parks are different from shopping malls primarily because products at the former are offered at lower prices, making them significantly more affordable to buyers. We usually build them in the city outskirts, but the retail park in Novi Sad is an exception because it is near the downtown. We made that exception because we failed to find an adequate lot in another location. This is the reason that the center will combain classical closed shopping mall of 20,000 sqm and reatil park of 20,000 sqm – total of 40,000 sqm of shops on land of 90,000 sqm – with free parking space for 1500 cars – we are the first center in Serbia to offer such quality .

eKapija: How many stores within the shopping complex in Novi Sad have you rented to date, and which trademarks can customers expect to find there?

- At this moment I can say that the first section of the Big CEE Srbija center, which is due to open in October 2012, is 100% occupied by the following brands: DIS, C&A, DEICHMANN, NEWYORKER, TAKKO, HOME CENTER, TREFF SPORT, BIGBANG.

We plan to open the next section of the shopping center in spring 2013. In this part of the center you will again see top-quality brands, large international as well as local tenants, and we are constantly negotiating with new ones.

Customers can expect to find all famous global and European brands in Novi Sad. In this stage we have rented out for spring 2013 opening more than 60% of the space and we are happy to say that all of the brands recognize Novi Sad as important city and our Shopping Center as the place to be in.

eKapija: Since you have already bought a land in Belgrade, Jagodina and Sabac, do you intend to soon commence construction works in other cities in Serbia as well?

- We have acquired in Belgrade a 140,000-square-meter building land in the vicinity of Metro, on the Ibarska main route. Construction of this complex is part of our future plans to develop our business in Serbia.

eKapija: What is the situation in Jagodina and Sabac?

- We already own 100% of the land lots, as well as all required building permits, meaning that we are completely ready. We have bought a 50,000-square-meter land in Jagodina and 60,000 sqm land in Sabac.

Our plan is to build about 12,000 square meters of retail space in Jagodina and 15,000 square meter retail space in Sabac. The plan is to develop both locations in the future.

eKapija: Which cities are the next in the pipeline?

- According to our plans, Big CEE should build a shopping center in all cities in Serbia having a population of 100,000 and more, so I believe we will start making plans for cities like Nis, Subotica, Zrenjanin and Kragujevac in the very near future.

eKapija: What are your forecasts for visits to these malls on a monthly/annual basis?

- I would like to emphasize that our centers will include shops that are cheaper to rent, and when I say cheaper to rent, I mean the end result is a cheaper price charged to the customer. If the shop is expensive to rent, someone will have to pay for that, and in the end, that someone will be the customer. Looking at the very low income per capita in Serbia, we believe that even in the worst of times, the concept of Retail Park is a good idea, because as I mentioned, the rents are lower. Most of the shops in our centers sell necessary products that are always needed.

eKapija: Big Cee earlier announced that it would open 15 such facilities in Serbia. Do you believe you will be able to do that?

- I hope we will be able to open between 10 and 15 such facilities. That is not an easy thing to do, and I cannot specify when we will do that, but we will do our best to achieve that goal. We will open our first center within 30 days and we already own 3 land lots for future projects. Taking step by step, we will make it. We are patient.

(works in Novi Sad)

eKapija: Did the economic crisis affect your plans?

- For sure there is impact of the global crisis. Crises have huge impact on the speed of development and on the process of turning plans into real projects. As you can see, serious groups with a low level of leverage and the spirit of marathon runners are the one who are dominating the markets all over the world. Our group has been growing over the last 4 years because we are giving an alternative option to the customer to rent out shops for less money. We believe that our concept is a very good one, and most importantly, it does well for our customers even in bad times like during an economic crisis.

eKapija: Is that the reason why you’ve decided to build in Serbia instead of some other country in the region?

- The exact reason is the fact that Serbia has no retail parks, and we’ve seen our chance in that. Croatia, Romania, Hungary – they all have retail parks.

On the other hand, Bosnia-Herzegovina, which also lacks retail parks, is a much too small market for us. When it comes to Montenegro and Macedonia, we may build a retail park in these countries as well in the future, but the company’s aim is not to enter the markets where it can build only one retail park, but to enter those where minimum 5 or 6 such facilities can be built.

eKapija: Do you believe that there is room for new shopping centers in Serbia in spite of the reduced purchasing power in the country?

- Today, there are many cities in Serbia where you can't find even one kind of shopping center. Once the economic situation improves, there should be at least one in each city having a population of 70,000-100,000. We are still far away from that goal, and I think it is also an excellent chance for Big CEE Serbia.

eKapija: Do you expect that improvement in the market to happen soon?

- I believe and hope so but it's very difficult to predict. We all see that the world is going through huge changes. What we can see in the retail market in Serbia are changes and development primarily caused by the entry of international names such as C&A, Deichman, Takko, GAP, Lindex, New Look and many, many others. I am sure that all famous brands will come to Serbia in the very near future. The situation is not easy, but the retail market in Serbia is definitely making a progress.

M.S.