Epicenter shifts strategy with new shopping centers in Ukraine
Ukraine's leading network of construction hypermarkets, Epicenter, is expanding its business model by introducing shopping centers that will include third-party tenants, according to a Forbes report on May 20.
The company is currently refining the design for the third floor of its Lviv shopping center and anticipates the launch of two additional centers in Kyiv Oblast in 2024, which will operate under their own distinct names rather than the Epicenter brand.
To spearhead this expansion, Epicenter owners Oleksandr and Halyna Hereha have appointed Kateryna Vesna, a former executive at consulting firms Cushman & Wakefield and JLL, as the new head of their shopping center development department. Vesna brings a wealth of experience, having previously managed well-known shopping centers such as TSUM, Victoria Gardens, Spartak, Prospekt, and Karavan.
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Among the new projects is the Green Gallery in Chabany, Kyiv Oblast, a 53,000 square meter complex being developed on the former site of Novaya Liniya. This center will not only include Epicenter’s typical retail offerings but also an entertainment hub and 9,000 square meters of rental space. Additionally, the Bucha Gallery, rising from the demolished Epicenter in Bucha, will span 97,000 square meters with 15,000 square meters designated for third-party rentals.
Andriy Zhuk, chairman of the Retail Association of Ukraine, commended the strategic decision to use different branding for the new shopping centers. "This will ensure they are not merely seen as extensions of Epicenter but as independent entities comparable to established centers like Ocean Plaza or Victoria Garden," Zhuk noted.
Zhuk also highlighted a potential conflict in the business strategy. "The Herehas need to determine whether they are focusing on retail or property development. If they're offering spaces for household appliances, for instance, they should hold an open tender to select the most suitable tenant rather than defaulting to their own outlets," he advised.
Vesna reported that the new centers are attracting a variety of tenants, with 72% of Green Gallery already booked ahead of its opening in July, and 47% of Bucha Gallery filled, set to open in December 2024.
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Epicenter's portfolio includes the retail chains Epicenter and Nova Liniya, an online store, an agricultural division, ceramic and woodworking plants, logistics operations, and other assets. As of early April 2024, the group operated 72 retail locations.
In related retail news, national low-cost supermarket chain ATB plans to open 60 new stores next year, while upscale supermarket franchise Silpo has recently inaugurated four themed stores nationwide. Meanwhile, French hypermarket chain Auchan has shuttered two of its stores, reports confirmed on January 16.
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