The center will be the largest of its kind in Lithuania. Objekt-Entwicklung's Lithuanian subsidiary, Baltic Shopping Centers, has leased 260,000 square meters of property near the Vilnius-Kaunas-Klaipeda A1 motorway for 99 years and intends to invest DM 100 million (roughly 50 million litas) in the project.
The center will have parking for up to 3,500 cars and 100,000 square meters of retail and entertainment space. The company also intends to build a four-lane bridge at the entrance of the property to ensure optimal traffic flow.
"Kaunas does not yet have infrastructure resources to build, maintain and clean a bridge of this type, especially in winter. We will build and maintain it in the first years, and when they are up to speed in this area, ownership will revert to the municipality," said Greg Kasting, Baltic Shopping Centers general director.
Kaunas municipal officials did fumble initially in their attempt to lure Baltic Shopping Centers to the city.
"They signed away land that wasn't theirs to sign away," said Kasting. Ten private landowners with legal title to parts of the site materialized after the city approved the lease. Baltic Shopping Centers then decided to leave the bureaucrats out and negotiated individual settlements with the landowners.
Modern supermarkets and shopping centers seem to be popping up all over Lithuania's urban landscape, slowly displacing the open-air markets and individually owned kiosks that characterized much of the retail trade in the country after independence.
Vilniaus Prekyba opened the large and very popular 'Maxima' supermarket near the Vilnius railway station last year. Shoppers can buy anything from motor oil to eggs under one roof. Nevertheless, a lack of parking spaces and a logical store layout are its major drawbacks. The Iki and Spar chains have also been active in Lithuania. Iki recently opened a supermarket in the Vilnius Bus Station complex, a much- needed boost to a downtrodden part of the city.
Axel Pfeifer, an Objekt-Entwicklung executive, believes that he can do better though.
"We have many decades of experience in this area and our people will ensure that traffic flow and the shopping mix are functioning perfectly," he said.
Pfeifer and his crew see themselves more as property managers than actual retailers. They aim to create and market a comfortable shopping environment working together with independent retailers. He was tightlipped regarding the name of the key supermarket tenant for the new center, as negotiations are ongoing. It will be "major western chain," Pfeifer said.
Aside from regular retailers, the company will build space for a bowling alley, movie theatre and nightclub. They estimate that a further DM 100 million will be invested in the property by tenants.
The announcement is good news for the city of Kaunas, which is often overlooked as a site for investment by foreigners. Klaipeda, with half the population of Kaunas, gets double the foreign direct investment.
"I have no fear in investing in Kaunas as long-term prospects are good there as they are for all of Lithuania and the Baltic states," said Pfeifer.
Kasting was more explicit. "If you look at a road map of Lithuania, you'll see that Kaunas is so central that it's the best place to locate this type of business. Two-thirds of Lithuania's population, or two million people, are located within a one-hour drive of the center," he said. Kaunas is also a major junction for highways leading to Alytus, Utena, Siauliai as well as foreign cities such as Riga and Minsk (through Vilnius). The A1 is the busiest highway in the Baltics, with about 18,000 vehicles per day passing by the site where the new center will be located. This is equivalent to 10 million per year," said Kasting.
Baltic Shopping Centers also intends to have locations in Vilnius and Klaipeda. The company is looking for a suitable location in Vilnius after losing a bid to build on the derelict Seskines stadium site to Vilniaus Prekyba.
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