RIGA - Retail shopping mall operator Linstow Center Management is to spend a whopping 400 million euros building a new retail park center in Babite, just outside of Riga.
Board chairman Frode Gronvold says "It will be a Baltic scale shopping park, attracting people from all three Baltic states - Latvia, Lithuania and Estonia. The geographic location of the park will be its advantage, at the main road connecting Riga with the resort city of Jurmala."
He claims that this will be the largest shopping mall in the Baltics centered on a unique concept new to the Baltics.
Gronvold has said that the project, covering 750,000 sq. meters of floor space, is currently in the design phase with construction, including installation of all necessary communications and infrastructure, likely to start in 2009. "The first retail outlets could be opened in late 2010 or early 2011 at the latest," he said, adding that the retail outlets in the park will open gradually with management monitoring progress and any changes in demand.
Latvian retailers he said have demonstrated strong interest in renting out space. The park is planned to be divided into various sales categories with shoppers able to choose from among items ranging from construction materials, household goods including furniture, electronic items, and clothing, with entertainment centers built in as well. Linstow expects to bring in new brands that are not now represented in Latvia.
The shopping center will be built within the greenfield all-inclusive community development project Saliena, which is the largest real estate development project in the Baltics.
The company is announcing the project in the face of deteriorating economic conditions in Latvia. Though sales for Linstow-operated shopping centers in Latvia are up so far this year by 5.4 percent, commercial director Evija Majevska says that "turnover trends at the shopping centers managed by [Linstow] reflect the overall developments in the Latvian economy. Retail growth has been falling, showing even negative growth in January, March and May."
Specifically, sales of non-basic goods such as furniture, jewelry, electronic equipment and catering services have been dropping, while food sales show a stable increase.
Norwegian-owned Linstow runs six shopping centers, five in Latvia - Alfa, Mols, Origo, Galerija Centrs and Dole, and one in Estonia - Ulemiste. The total shopping area managed by Linstow in Latvia is 230,000 square meters, while the company's total investment in the shopping center segment is over 200 million euros.
