Retail: Going Green in CEE - warehousefinder.pl · Advance • Retail: Going Green in CEE • 2013 5 “We have tried to convey the family-oriented and green character of Factory

Retail: Going

Green in CEE A 2013 Perspective

2 Advance • Retail: Going Green in CEE • 2013

Introduction

By the year 2020, all new buildings in the European Union will

have to prove that they are nearly zero-energy buildings (Directive

2010/31/EU). By the year 2050, carbon emissions from all

buildings need to be as near to zero as possible. To reach these

goals significant changes to current practices need to be made.

In today‟s market environment, building green requires property

professionals to plan carefully and to think outside the box. Over

the course of this decade, existing properties and those in the

pipeline will be put to the test, from an environmental stand-point

by those looking to own them, manage them and occupy them.

This paper sets out to equip real estate professionals with the

understanding of why proactive action needs to be taken now, both

to mitigate the risks of high risk buildings and, importantly, to adapt

portfolios to inevitable climatic changes. This paper also seeks to

provide some practical tips and guidance on the actions that can

and are already being undertaken by Developers,

Owners/Investors and Occupiers. It will also look at the current

levels of „Green Building‟ activity in the region and hear from those

who are leading the industry in this respect.

„The CEE region has a very strong trend in Green Building and

Complex Certification, with office buildings as the main driver.

There are also the first examples coming through in the

Logistics/Light Industrial and Retail segment. It is also important to

note that these projects are not only located in the capital cities

but, are starting to "expand" to the regional towns and cities. The

complex certification of existing buildings has a strong momentum

through the BREEAM In-Use or LEED EB:OM (Existing Buildings:

Operations and Maintenance) systems.

The use of complex green building certification systems is an

example of company culture and prudent management, having

influence in many cases, on the long term attractiveness and value

of the property.

Each type of the building has its own specifics which need to be

addressed or capitalized on. One of the specifics of Shopping

Centres and other retail formats is the very high heat dissipation

where lighting solutions installed in the shops and common areas

play an important role. Lighting in the retail sector is a very

important sales tool which needs to create targeted atmospheres,

comfort, colour reflection and exposure of details, amongst others.

Low energy consumption LED lighting technology solutions are

greatly improving year-by-year from both a technical performance

and price/performance point of view.

The challenge is not so only on the Shopping Centre or retail

scheme itself, but also on retailers who occupy the shop units

inside. The strong international brands should be, and in some

cases, are already leading the way in implementing better energy

efficient solutions and sustainability in general.‟

Boris Zupancic - CEO - Czech Green Building Council (CZGBC)

Advance • Retail: Going Green in CEE • 2013 3

CEE Sustainable Highlights

Legislation & Drivers

• The 2010/31/EU Energy Performance of Buildings Directive

to lower energy consumption in the building sector by about

20% is becoming more widely enforced. The EU targets the

application of these obligations for all EU member states

from July 2013, when each new building will have to fulfil

certain norms about its minimum energy performance

characteristics.

• Very few government incentives currently exist to promote

green development in the region.

Real Estate

• In the CEE region, there is currently over 1.4 million sqm

GLA of existing certified retail space in 33 schemes

(Shopping Centres, Retail Parks and Cash & Carry and

Factory Outlets).

• There is a further 440,000 sqm of retail space in 12 schemes

(Shopping Centres, Retail Parks, Factory Outlets) in various

stages of completion and in process of obtaining green

certification.

• Poland leads the region in both the number and volume of

retail schemes with green certification (existing and pipeline).

• BREEAM certified buildings have the highest presence in the

region followed by DGNB. From the pipeline, we should also

see more schemes seeking to obtain LEED certification.

Sustainable Attitudes

Sustainability and attitudes towards green buildings are rapidly

increasing in importance between owners, developers and

occupiers in Central & Eastern Europe. With the current exception

of Poland, the development pipelines in CEE are somewhat limited

at present. This does not mean however that the potential supply

of green buildings is also limited.

There are in fact a number of options for existing buildings to

achieve green certification without having to start from scratch. In

this edition of the CEE Green report we will be looking at some of

these options and specifically at the retail sector in the CEE region.

Shopping centres have to some extent, lagged behind offices in

the move towards sustainability. In part, this comes from the

purpose and design of shopping centres, which have a completely

different use and function for its occupiers and visitors than offices

for example. Shopping centres are often very large, brightly lit

properties, with large open spaces, almost permanently open shop

fronts and multiple users coming and going for more than 12 hours

per day and 7 days per week. In other words, from a sustainability

perspective, a rather complicated challenge when trying to

maintain a comfortable and enticing environment for visitors, but

also seeking ways in which to reduce the consumption of energies

from heating, cooling and lighting for example.

Green initiatives and certification are viewed by many owners,

landlords, developers, occupiers and even customers, as a

competitive advantage and a necessary feature of modern real

estate. All real estate sectors need to adapt to upcoming legislative

changes in the area of sustainable development, energy

consumption and occupation which, should come in to force within

the European Union over the next 7 years.

What are the Opportunities of Sustainable Practices?

• Energy savings in building design and operations represent one

of the greatest potentials to reduce carbon emissions and save

money.

• Buildings that perform at a more sustainable level attract

stronger tenants; have better occupancy, all of which have the

potential to translate into more building asset value.

What are the Risks of Not Taking Action?

• Climate change and its potential consequences would represent

a range of risks to the real estate sector – including physical,

financial, regulatory and market demand risks.

Sustainability Legislation in CEE

In terms of the CEE region referred to in this report, (Bulgaria,

Croatia, Czech Republic, Hungary, Poland, Romania, Serbia and

Slovakia) there is currently little or no evidence that legislation is

high on the agenda. It is rather the real estate industry and related

sectors that are taking these matters into their own hands. There is

however one common directive (2010/31/EU) from the European

Parliament relevant to all EU member states, which aims to

promote the energy performance of buildings and building units.

Member States shall adopt, either at national or regional level, a

methodology for calculating the energy performance of buildings

which takes into account certain elements, including:


• The thermal characteristics of a building (thermal capacity,

insulation, etc.);

• Heating installations and hot water supply;

• The air-conditioning installations;

• Ventilation systems;

• The built-in lighting installations;

• Indoor air-quality;

• Local climate and daylight

The positive influence of other aspects such as local solar

exposure, natural lighting, and electricity produced by cogeneration

and district or block heating or cooling systems are also taken into

account. We understand that most countries in the region are at

least moving in the right direction when it comes to implementing

this directive.

Other laws around the region to regulate sustainability in

construction or renewable energies for example, range from the

„almost there‟ to the „not even close.‟ It is therefore down to

individuals or non-profit organisations such as the Green Building

Councils, to lobby and encourage such changes.

Where is My Incentive?

Despite all the potential benefits from creating a sustainable

building and surrounding environment, governments are offering

very little in the way of incentives for investors and developers to

do so. This would normally take the shape of tax breaks or other

similar incentives. Instead, it is largely developers and occupiers

who are driving this forward due to their own sense of duty, the

growing number of corporate social responsibility (CSR)

charters or the need to differentiate their assets.

Retail: Going Green

In the retail real estate sector, going green is still something

relatively new and can be perceived from three main different

points of view: Developers/Landlords/Owners, Retailers and

Consumers.

Developers, Landlords, Owners

The motivation of developers to go green in CEE may differ: with

some perceiving the certification of properties as something which

can be used for marketing purposes and later help during the sale

of the property to conscientious investors, while others may have

sustainable development and management imbedded in their

strategy and company‟s corporate social responsibility (CSR).

Under current legislation, there is limited direct benefit or

motivation for landlords to choose environmentally friendly

solutions; the EPBD II directive on energy stamps is the only legal

requirement which requires buildings to quote their actual energy

consumption.

Among landlords over the past couple of years, two major trends

have emerged on the market. Firstly, going green for the majority

of landlords has meant finding alternative solutions for lighting,

which in most cases is the replacement of standard lights by

modern LEDs, which predominantly help in the reduction of

electricity consumption and heat generation and therefore energy

bills. The second most common trend is to provide electro-mobile

charging stations in the parking lots of their projects for alternative

fuel vehicles. There are however a few exceptions who go beyond

these “standard” steps and look for additional solutions:

Tesco as a hypermarket and supermarket operator is focused on

cutting down the carbon footprint that it generates, and in 2011, it

opened the first zero carbon footprint hypermarket in continental

Europe in Jaroměř, CR. In addition, Tesco has also introduced and

is conducting road trials on a number of alternative fuel vehicles in

order to reduce CO2 emissions, amongst other benefits.

In addition to the above mentioned solutions, Inter IKEA is

increasing its investment into energy saving measures. A non-

typical solution is their introduction of metal cutlery and chinaware

in their food courts, which is a measure aimed to reduce the

amount of non-separated waste.


“We have tried to convey the family-oriented and green character

of Factory Warszawa Annopol at every stage of its existence. It

was the first retail centre in Poland to obtain green credentials

during the design stage. It was awarded the BREEAM Interim

certificate with a score of “Good” a year prior to laying the

foundation stone. At present, after the completion of the

construction works, the scoring will be verified. We have applied a

number of sustainable solutions such as: automatic light

adjustment according to the daylight and sun exposure, water

saving systems that switch off when not used and heat saving

devices, which reuse the air recovered from the ventilation

system. The foundation of the parking lot was made of recycled

concrete and the lightning system operates with light-emitting

diodes (LED)‟‟.

Agata Brzezińska - Country Manager - NEINVER Polska

Factory Warszawa Annopol – the first retail scheme in Poland

to be awarded green credentials during the design stage

Source: Neinver, 2013

Becoming Certified

Green building certification is one way in which developers,

occupiers and related organisations can demonstrate their

commitment to bringing sustainability to the built environment.

According to the US Environmental Protection Agency, green

building is the practice of creating structures and using processes

that are environmentally responsible and resource efficient

throughout a building‟s life cycle.

Across the globe a number of design and assessment methods for

sustainable buildings have been developed and have become

widely accepted. Probably the two most well-known and popular

systems are LEED and BREEAM, which both have similar goals:

popularization of good practices in sustainable building and

ensuring comparable assessments of green office buildings

worldwide. Notwithstanding the selection of a specific system, the

best solution is to consider assessment criteria from the very

beginning of the investment process.

Manufaktura – The first BREEAM In-Use Certified Retail

Project in Poland

Source: Apsys Polska

“Apsys Polska was the first developer and manager of shopping

centers to successfully complete the BREEAM In-Use certification

process for an existing retail project in Poland. The first certificate

was granted in 2011 to Manufaktura, a 126,000 sqm (GLA)

shopping and leisure center located in Łódź. At the end of 2012, 13

shopping centers under Apsys‟s management have been awarded

with BREEAM In-Use certificates – 12 at “Very Good” and 1 at

“Excellent” level. This makes Apsys one of the most active

companies in the CEE region in terms of “green certification”. In

2013, Apsys will conduct the certification procedure for 2 more

existing shopping centers under its management. In terms of

BREEAM New Build certificates, Apsys systematically

submits pre-certification applications for all of its new projects

under development; such as Łacina – a 99,000 sqm (GLA)

shopping center located in Poznań. “

Fabrice Bansay - Chief Executive Officer - Apsys Polska SA.

BREEAM In-Use and LEED EB:OM

In our previous paper „Going Green in CEE‟, we focussed on

offices and covered some of the main certification options available

for building green. For some Developers/Landlords/Owners, there

is also alternative option for existing buildings that were not built

under BREEAM, DGNB or LEED for example. The majority of

certification methods also have options to improve and certify

sustainable improvements to existing buildings in operation, such

as BREEAM In-Use and LEED EB:OM (Existing Buildings:

Operations and Maintenance).

BREEAM In-Use

According to BREEAM, the biggest opportunity to address the

environmental impact from the built environment lies in better

management and improvement of the existing building stock.

BREEAM In-Use has been developed to recognise and encourage

better building management and targeted investment in existing

building stock.


BREEAM In-Use is a scheme to help building managers reduce

the running costs and improve the environmental performance of

existing buildings. It consists of a standard, easy-to-use

assessment methodology and an independent certification process

that provides a clear and credible route map to improving

sustainability. Parts 1 and 2 of the BREEAM In-Use Certification

Scheme are relevant to all non-domestic: commercial, industrial,

retail and institutional buildings.

LEED EB:OM

LEED for Existing Buildings helps maximize the efficiency of

operations while minimizing the impact on the environment. The

rating system encourages owners and operators of existing

buildings to implement sustainable practices and reduce the

environmental impacts of their buildings, while addressing the

major aspects of on-going building operations:

• exterior building site maintenance programs

• water and energy use

• environmentally preferred products and practices for cleaning

and alterations

• sustainable purchasing policies

• waste stream management

• on-going indoor environmental quality

All buildings (as defined by standard building codes) are eligible for

certification under LEED for Existing Buildings. It is targeted at

single buildings, whether owner occupied, multitenant, or multiple-

building campus projects. It is a whole-building rating system;

individual tenant spaces are not eligible.

BREEAM In-Use Certification Parts 1 & 2: Centrum Chodov

Case Study: Unibail-Rodamco

Centrum Chodov – the highest scoring BREEAM In-Use

certified shopping centre in Central & Eastern Europe

Source: Unibail-Rodamco

As listed previously, Unibail-Rodamco, a leading Retail

Developer, Investor and Manager in the CEE region, is committed

to obtaining green certification and pursuing sustainability for the

assets in it‟s portfolio. As a part of their environmentally

sustainable policy, Unibail-Rodamco is also purchasing from low-

carbon and renewable energy sources. This purchasing policy

reduces the environmental impact of the Group‟s operations and

encourages suppliers to invest in „green‟ power- generation

technologies.

Unibail-Rodamco has recently received BREEAM In-use

certifications, Parts 1 & 2, for Arkadia and Galerie Mokotow in

Warsaw and Centrum Chodov in Prague. According to current

available records, Centrum Chodov has achieved the highest

score for a BREEAM In-Use shopping centre in CEE and ranks

among one of the highest achievers in this category in Europe. For

Part 1 (Asset Rating) it achieved a score of 64.24% - Very Good

and for Part 2 (Building Management) it scored 71.46% - Excellent.

There are currently 30 BREEAM In-Use retail schemes in CEE,

consisting of projects in the Czech Republic, Hungary, Poland and

Serbia.

Unibail-Rodamco‟s sustainability strategy is designed to return

reliable, quantifiable improvements in social, environmental and

economic performance over the long term. This strategy is fully

aligned with the company‟s aim to create value for shareholders.

The need to develop and operate assets that meet stakeholder


expectations in terms of shopping experience, health & safety,

financial return, and environmental performance is central to the

Group‟s strategy. These objectives are embedded in the Group‟s

operating and product development process with the help of the

environmental certifications programmes.

Sustainability issues which are the sole responsibility of the Group

are managed through two Environmental Management Systems

(EMS) for both new developments and standing assets. The strict

implementation of environmental management systems is

externally audited with two certification programmes:

• BREEAM for new projects

• BREEAM In-Use for standing assets

At the end of 2012, 16 of the Group‟s shopping centres will be

BREEAM In-Use certified, i.e. 35% of the Group‟s consolidated

gross leasable area. Unibail-Rodamco distinguishes itself with high

levels of certifications: 88% of BREEAM In-Use certifications

obtained by the Group had at least Very Good or Excellent ratings

as it has been recently obtained for Chodov shopping centre (Very

good for Asset and Excellent for Building Management).

„It took approximately two and half months to complete from the

kick-off meeting to certifications delivery. The technical skills and

knowledge of the Unibail-Rodamco‟s technical managers and the

dedicated in-house EMS, is in place to ensure that existing assets

are managed proactively (target setting, environmental action plan,

performance tracking and review) with our suppliers and give us a

clear competitive advantage. That‟s the reason why we obtained

an „excellent‟ score level for the management part at Chodov very

quickly.

In terms of the asset rating we had to deal with the intrinsic quality

of the existing building which is really good (rated „very good‟ for

the asset part). Even though the asset purchase of green energy

is high, there is still a lot to do to improve the situation especially

regarding the technical equipment, because it quickly becomes

obsolete due to technological developments and these

improvements are managed through our five year plan. However,

between 2006 and 2012 we have achieved a reduction in

electricity energy consumption measured in kWh/visit/year by:

• common areas and equipment managed by Unibail-Rodamco as

a landlord = -54.5%

• total building, including private areas = -18.6%

For the management part we focused on the energy issue as well,

especially where technology monitoring systems need to be of a

high standard, as one of the most important and key issues in

successful sustainable operation. Additionally, we have

implemented solar systems to pre-heat TUV for common areas.

The Building Management System was already in place to

optimize the running hours of all technical devices and prevent

water leakages etc. on a daily basis. Natural ventilation was also

implemented one and half years ago with the help of a local

University and contributes to the reduction of total energy

consumption. Another important part of the process is biodiversity

and the cooperation and communication with local authorities

and visitors. As an example, Beehives that have been placed on

the centre roof are just one of the many ways which demonstrates

that the centre is going in the right direction and plays its role as a

local actor to develop visitor‟s awareness.

The BREEAM In-Use certificates and particularly the building

management scores (rated „Excellent‟) reflects the best practice

techniques in environmental performance and risk management

applied within the Group. As an owner, BREEAM In-Use allows us

to deliver a clear and visible message to our shareholders and

investors reflecting the Group‟s sustainability commitment and the

high performance of our managed assets in terms of carbon

intensity, resources use and connectivity. It allows us also to

deliver a very positive message to our tenants, in order to create

a positive emulation on site to reduce energy consumption which

have an impact on service charges and of course it also

contributes to demonstrating our daily commitment to our visitors

to reduce the environmental impact and ensure that we welcome

them in a safe and environmentally friendly environment.

At Unibail-Rodamco, BREEAM In-Use is not seen as an additional

cost or bureaucratic constraint, it is part of our culture and

management to improve the performance of our asset on a daily

basis. Since 2006, Centrum Chodov dramatically decreased its

energy intensity (kWh/visit), this remarkable performance

contributes to the global service charge optimization, but above all,

the BREEAM approach allows us to integrate and stimulate our

maintenance supplier to be sure that each technical device

(lighting, mechanical transports, ventilation, cooling and heating

production…) will be properly maintained and operated 365 days

per year for the wellbeing of our customers’.

Petr Vecko - Property Maintenance, Purchasing and Sustainability

Manager - Unibail-Rodamco


Retailers Retailers are currently showing limited demand for green

properties, especially in cases where it would mean increased

costs, as real estate is already one of the highest costs to the

retailer (unlike in offices, where the highest cost is human

resources). On the other hand, if the retail scheme can improve on

energy efficiencies and reduce service charges, then this would of

course be very welcome to tenants. In today‟s market, one of the

main drivers for retailers being attracted to a certain scheme is its

footfall, trading record, perceived position in the market and

experience of the property management or owner.

There are however a number of exceptions, driven either by

personal motives or by corporate strategies, yet those retailers are

usually looking for premises located on local high streets where the

rent is significantly lower than in prime properties, as the margin

gained on eco/bio/organic/recycling are lower than on mass

production. Typically these occupiers include organic food stores

or some fashion/sports fashion retail chains (Patagonia – recycling

programmes and the use of recycled materials; AlpinePro who

initiated the use of recycled materials into their store interiors).

Tesco

With a trading footprint in 14 countries and over 500,000

employees worldwide, Tesco is one of the world‟s largest retailers,

and occupiers of retail and industrial real estate.

„In terms of sustainability activities, Tesco is testing modern

technologies like heat pumps, CO2 refrigeration, LEDs, working

with CO2 sensors and dimming. In-store lighting is a very

important sales technique for retailers to showcase merchandise,

colours, themes and of course regular lighting of spaces etc. It is

also a huge user of energy and a generator of excess heat.

Tesco already has installations with LED lighting solutions but,

although as this technology seems to be becoming a standard, the

return on investment of such types of lights these days is quite

long. Regardless of this, we are already using LEDs as a standard

in some applications such as freezer boxes, external signage and

health and beauty shelves to name just a few.

Green building certification has no added value to our operation at

present. The money that would be necessary to spend for such

certificates is, from our point of view, better spent directly on

energy savings initiatives. However, we will investigate what it

could bring in connection with our standalone stores. For Shopping

centres, we are going to test this further as there might be a future

upside from an investor’s standpoint‟.

Sustainable policy is a major part of our business strategy and

“green” activities or protection of the environment in which we live

is one of our key priorities. Our policy is based on what our

customers prefer. For example our research shows that customers

don‟t want genetically modified foods in our stores. So we don‟t

have any own-brand GM foods. We aim to ensure that our

products come from the most sustainable and eco-friendly

sources. We use every opportunity to tell customers how we try to

be sustainable. Customers pay more attention to the products

being sold on the shop floor or online rather than watching the

physical store constructions, although of course heating, cooling

and lighting is observed too.

We know that customers want to live more sustainably now; they

want to consume products and services which are more

sustainable. So, we want to give them the information and means

to achieve this. If we succeed, we will be rewarded with customer

loyalty. The money saved goes back into the business to improve

services for our customers who always come first. Savings on

energies must always be balanced in order to keep the shopping

environment comfortable for customers. For example we must

ensure the right temperature and light so that customers spend the

intended time in the shop, certainly not less‟.

David Nekovar – Tesco Stores

H&M

With its multiple brand offering, the H&M Group has approximately

2,800 stores in 48 countries and employs over 100,000 people

worldwide. This makes the group one of the major fashion retailers

globally and has witnessed rapid expansion in recent years.

Offering H&M‟s customers fashion and quality at the best price

means that they need to keep unnecessary costs down. Making

the most of the resources they buy and avoiding waste at every

stage of their value chain is central to this. This resource efficiency

also helps to minimise the negative environmental impact of their

operations. Manufacturing waste, transport and product packaging,

shopping bags, shop fittings and construction waste from building

new stores are all sources of waste generated across H&M

operations.


H&M want to reduce, reuse or recycle wherever possible. Their

ultimate aim is to send zero waste to landfills. However, H&M

believe their commitment to waste reduction should go beyond

this. They also want to use their position as a major retailer to help

their customers and business partners to reduce the waste that

they generate.

„In 2010, we switched to recycled material for all of our standard

plastic consumer bags. They are now made from 50 percent post-

consumer and 50 percent pre-consumer recycled polyethylene

(PE).‟

By using recycled PE, H&M reduce the demand for virgin oil and

increase the demand for recycled plastic waste, which supports the

recycling economy. Producing recycled PE takes only 50 percent

of the energy required to produce virgin plastic, and it can also be

recycled again. Recycled plastic has the same durability as virgin

plastic and the bag can therefore be reused by a consumer many

times before it is finally recycled.

Recycling waste from store construction

H&M have had standard requirements for store construction and

store fittings for several years. These state the materials that can

and cannot be used from an environmental and health perspective;

suppliers that refurbish or build their stores must follow these

requirements. Building or rebuilding stores can create a lot of

waste. Much of this can be recycled, however in many cases this

results in cost reductions. To make sure that we make the best of

these opportunities throughout our operations, we have developed

further guidance for all our sales countries.

Source: www.hm.com

Sustainable Lighting Solutions for Retail

When speaking to developers, landlords and owners, one of the

key areas of sustainability that remains largely outside of their

control is the fit-out of individual shop units within their retail

schemes. Retail brands are very specific in the way they present

themselves to consumers. One area in particular, is lighting

fixtures. We spoke to lighting specialists ERCO about their

experiences from the retail sector.

„The retail environment is emotional, appealing and enticing.

Whatever you are in the market for, the right lighting attracts you

faster than a drab scene. Retail outlets come in many sizes and

shapes, from the exclusive boutique to the value-driven chain

store. What do they have in common? An efficient visual comfort

(EVC) driven lighting approach enhances retail outlets across the

board. You‟re buying a nice shirt or blouse in a fashion boutique?

The colour and the texture look great. Later at home you take

another look, all of a sudden, the colour looks odd, different to the

appearance in the shop. What went wrong? Well, it probably isn‟t a

size issue, but a combination of poor visual factors.

Entertainment, lifestyle and experience is the combination that

shoppers expect when they enter a store today, yet before they

feel motivated to cross the threshold, shop window lighting should

provide an attractive display and a welcoming first impression

support shops to distinguish them from other façades.

Energy saving and low maintenance features are becoming more

and more important to shop owners, not only for commercial but

also for ethical reasons. Thinking along the lines of “light not

luminaires”, it is important that consideration is given to the

comfort of the users of any given space, and then to the solution in

mind.

Experience with a number retail store owners and operators

suggests that the lighting solution is one of a new range of tools to

differentiate one brand from the next. In a world in which the

function of a product is described and compared online, the visual

interaction and differentiation can become branding elements for

retail facilities.


Source: ERCO -The human eye expects vertical lighting and is stimulated by it.

Wall washing enhances the perception of the visual environment and saves energy.

The advent of digital lighting products, or in other words, the

emergence of LED into the world of professional lighting solutions

has revolutionised the way in which we can refer to energy

consumption in the retail environment. The combination of LED

chips with collimators, secondary and tertiary optical systems

deliver light with a level of precision previously unattainable.

LEDs are predestined for retail lighting projects. Their

characteristics of low maintenance, low heat dissipation (i.e.

less cooling required) and high efficiency also make them ideal for

typical requirements of the office environment. In combination with

their dimming, colour rendering, sparkle and colour-changing

characteristics, their flexibility is welcome, fulfilling the final

demand of EVC‟.

Michal Novak - Regional Manager Czech and

Slovak Republic - ERCO Lighting GmbH

Source: ERCO

Consumers The relatively limited demand from retailers largely results in low

demand from consumers. Consumers in general are heavily price

oriented and as such, are not necessarily willing to spend extra

money on products which are eco-friendly.

According to the International Institute for Sustainable

Development, understanding the demographics of green

consumerism can help retailers and entrepreneurs explore the

environmental market, and home in on likely prospects. Research

has shown that green consumers:

• are sincere in their intentions, with a growing commitment to

greener lifestyles;

• almost always judge their environmental practices as

inadequate;

• do not expect companies to be perfect in order to be considered

'green'. Rather, they look for companies that are taking

substantive steps and have made a commitment to improve.

However, the research also highlights that consumers also:

• tend to overstate their green behaviour, including the number of

green products they actually use;

• want environmental protection to be easy, and not to entail major

sacrifices;

• tend to distrust companies' environmental claims, unless they

have been independently verified;

• lack knowledge about environmental issues, and tend not to trust

themselves to evaluate scientific information about

environmental impacts. However, at the same time they are

eager to learn, and this means that consumer education is one of

the most effective strategies that retailers can use.

The most responsive age group tends to be young adults, many of

whom are influenced by their children. In addition, women are a

key target for greener products, and often make purchases on

behalf of men. The best 'green' customers are people with more

money to spend. As a result, the most promising products for

'greening' tend to be at the higher end of the market. The most

promising outlets for green products are retail stores frequented by

better-off shoppers.

In general, green consumers have the education and intellectual

orientation to appreciate value; they will understand evidence that

is presented in support of environmental claims. In the US, children

and teens are generally more concerned than adults about the

environment, and are more knowledgeable about green

alternatives. Increasingly, they influence their parents' purchasing

decisions. Equally importantly, millions of them will reach

adulthood in the next decade, and gain purchasing power of their

own.


Retail: Going Green in CEE

This section looks at existing and pipeline green retail projects in

the CEE market (Bulgaria, Croatia, Czech Republic, Hungary,

Poland, Romania, Serbia and Slovakia). For this we have collected

all available, non-confidential information from BREEAM, DGNB

and LEED as of the end of 2012.

There are currently 22 shopping centres and 14 Cash & Carry

schemes in CEE that have been accredited with BREEAM In-Use

certification. At present there is only one retail park in CEE that has

been certified with BREEAM International: Retail and 2 shopping

centres that have obtained DGNB certification. In terms of

shopping centre GLA, this represents a total of ca. 926,000 sqm.

Number of Existing Shopping Centres with Green

Certification by Country

Source: Jones Lang LaSalle Research, 2012

If we take the total shopping centre stock of CEE which is currently

at ca. 16.75 million sqm, then the amount of shopping centre stock

that has secured some form of certification is currently at just

5.5%. Poland leads the region in terms of sustainable retail with 16

shopping centres (ca. 720,000 sqm) and 12 Cash & Carry stores

by Metro (ca. 460,000 sqm).

0

2

4

6

8

10

12

14

16


Breakdown of Existing Green Certified Shopping Centre

Stock (GLA sqm) by Country


Breakdown of Existing Green Certified Retail Schemes by

Type of Certification System (% of Total)


In terms of new supply, there currently 12 retail schemes with a

total GLA of almost 440,000 sqm, in different stages of

development or near completion and at different stages of

acquiring green certification: BREEAM(8), LEED(3), DGNB(1).

Although the majority of these schemes are shopping centres, the

total includes one retail park and what will also be the first green

certified factory outlet in the region. There are a number of projects

registered in the LEED projects database which are marked as

„confidential‟, so there may well be more sustainable retail

schemes that will be announced on the market in the near future.

Sample of CEE Retail Projects Targeting BREEAM

International: Retail - LEED CS or DGNB Certification

Project Developer Certification Sought Location

Europa Centralna

Helical Sosnica BREEAM International 2009 Europe: Retail (Interim)

Gliwice, PL

Factory Annopol

Neinver BREEAM International 2009 Europe: Retail (Interim)

Warsaw, PL

Forum Nova Karolina

Multi Development

BREEAM International 2008 Europe: Retail (Interim)

Ostrava, CZ

Centrum Cerny Most

Unibail-Rodamco

BREEAM International 2008 Europe: Retail (Interim)

Prague, CZ

Arklad Szeged

ECE DGNB Szeged, HU

Hegyvidek Kozpont

WING BREEAM International 2009 Europe: Retail (Interim)

Budapest, HU

Central Bratislava

Immocap Group

LEED CS v2009 (Registered) Bratislava, SK

Visnjicka Plaza

Plaza Centres LEED CS v2009 (Registered) Belgrade, SRB

Source: LEED, BREEAM 2012

GLA (sqm) of Retail Schemes by Country (Shopping

Centres, Factory Outlets, Retail Parks) that are in the

Process of Obtaining Green Certification


Poland will maintain its leading position with an additional 4

schemes, with the Czech Republic just behind with 3. Serbia and

Hungary will both add to their green supply, while Slovakia is

targeting its first green certified shopping centre.

74%

10%

6% 5%

2% 3%

Poland Hungary

Czech Republic Bulgaria

Serbia Romania


Conclusions

A sustainable building will quite quickly come to mean a quality

building. Green retail schemes will be proxies for quality real

estate. The economics in terms of rents, yields and valuations will

follow naturally.

Unlike the office market where a company‟s staff is usually the

highest cost to the business, in retail, real estate occupancy costs,

i.e. rent, energy and water service charges are the highest.

Green developments consume less water and energy providing

savings not only to the owner of the property, but also for tenants

paying lower service charges than in typical retail schemes. In the

era of cost-cutting and consumers demanding more for less, this is

a great measurable advantage.

Jones Lang LaSalle Sustainability Services

In response to growing demand from the real estate market for the

improved performance of existing buildings, our Project and

Development Services (P&DS) team is now able to offer

BREEAM In-Use certification services. This certification scheme

enables us to certify all types of existing commercial buildings such

as shopping centres, office buildings and other retail and

institutional buildings.

Whilst BREEAM In-Use is currently the most popular certification

system for existing buildings in CEE, we also offer LEED EB:OM

among other certification services. Both of these certification

systems will help building managers and owners reduce the

running costs and improve the environmental performance of their

existing buildings.

In addition to our sustainability services to clients, Jones Lang

LaSalle is committed to creating a more sustainable environment

for current and future generations.

Our internal program ACT: A Cleaner Tomorrow aims to inspire a

more environmentally-friendly mind-set and encourage our

employees to take ACTions that will make our operations more

sustainable.

Contacts

Glyn Evans

Director

P&DS CEE

LEED Green Associate

Jones Lang LaSalle

Czech Republic

+420 224 234 809

[email protected]

Regina Gul

Senior Project Manager

BREEAM Assessor,

BREEAM In-Use Auditor

LEED AP BD+C

Jones Lang LaSalle

Poland

+48 22 318 0000

[email protected]

Hrvoje Kvasnicka

Senior Project Manager

P&DS

BREEAM Assessor,

LEED AP BD+C

Jones Lang LaSalle

Croatia

+385 1 4826 114

[email protected]

Retail: Going Green in CEE

Advance publications are topic-driven white papers from Jones Lang LaSalle that focus on key real estate and business issues.

Please visit our Sustainability Services website at: www.joneslanglasalle.com

For further research on the CEE real estate markets please visit: www.joneslanglasalle.eu/cee_research

Kevin Turpin

Director

Head of Research CEE

LEED Green Associate

Jones Lang LaSalle

Czech Republic

+420 224 234 809

[email protected]

Pawel Warda

Director

Head of P&DS CEE

LEED Accredited Professional

Jones Lang LaSalle

Poland

+48 22 318 0000

[email protected]

Beatrice Mouton

Regional Director

Head of Retail CEE

Jones Lang LaSalle

Czech Republic

+420 224 234 809

[email protected]

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