Business Forum • 3 May, 2024 at 3:41 PM
Budapest-based pan-European property investment conglomerate Indotek Group announced the relaunch of Plaza M, its 55,000-square-meter shopping mall in Targu Mures, Romania, following an extensive refurbishment and rebranding effort. The announcement marks the completion of a €16 million investment by Indotek that created a premier mass-market destination for international retail brands tailored to the needs and means of local customers. Indotek, at today's press conference, highlighted a series of signature store openings by major international brands in April, such as CCC Group brands: HalfPrice and CCC, as well as Tedi and New Yorker, with more in the pipeline.
Plaza M, formerly known as Promenada Mall, underwent significant renovations and expansion as part of Indotek Group's ongoing plaza-facelift program aimed at revitalizing key properties within its portfolio. The two-phase €16 million project included a 10% increase in floor space, modernized interiors, and fully refurbished community areas, providing visitors with a quality shopping experience. As part of the project, Indotek made major improvements to enhance the offerings for existing tenants: the Auchan and the Leroy Merlin units received a comprehensive facelift, complemented by a fully refurbished garden area. Additionally, the rebranding effort introduced a new name, fresh branding, and a renewed focus on serving the needs of the local community.
Zsolt Kertai, Head of International Retail at Indotek, remarked on the strategic vision behind Plaza M: "The main driver behind our commercial reorganization was to establish Plaza M as the number one mass-market shopping destination in Targu Mures, offering affordable and top-of-mind alternatives for local families. We also aim to become the go-to retail center for international brands that value quality and accessibility. We welcome international retailers who share this vision and opt to move into our shopping mall. Our comprehensive renovation strategy encompasses much more than introducing new retailers to the center. We are actively encouraging our existing tenants to implement their latest retail concepts in Plaza M.”
The refurbishment increased Plaza M's gross leasable area (GLA) by 5,000 square meters, bringing the total to 55,000 square meters. The mall now accommodates 90 stores, with an occupancy rate of approximately 92%, indicating its strong appeal to tenants and customers alike.
Zsolt Kertai said Plaza M's revival is culminating in a chain of new openings this month, including Tedi (April 11), HalfPrice (April 30), CCC (April 30), and New Yorker (April 30), with more to come. While CCC and New Yorker refurbished and expanded their previously existing stores, HalfPrice and Tedi are new signature tenants exclusively available at Plaza M, locally, further reinforcing the shopping center's unique position in the Targu Mures retail scene.
“The wave of new store openings is set to continue in July, with the arrival of two major anchor tenants: the Danish furniture retailer Jysk, which focuses on home decoration, and Fressnapf, a relatively new player in the Romanian market specializing in pet supplies, which boasts a significant European presence with over 1400 units,” Zsolt Kertai added.
Local benefits
Indotek Group's investment benefits the town and the local municipality through job creation and new tax revenues and contributes to the development of the local community. In a bid to proactively reduce its environmental footprint, Indotek is installing a 5000-square-meter, 1MW solar panel system on the mall's roof.
Zsolt Kertai emphasized Indotek's one-of-a-kind turnaround model centered around sustainability: “Our strategy emphasizes revitalizing and expanding existing buildings over constructing new ones. The extensive refurbishment of Plaza M reflects our consistent approach across Italy, Spain, and Hungary, demonstrating our dedication to enhancing value through modernization and reorganization. This also underscores our commitment to sustainability and the communities we serve.”
Zoltán Soós, the Mayor of Târgu Mureș, expressed his support for the project: "I would like to congratulate Indotek Group for their efforts to inject new life into Târgu Mureș. The novel and modern design of the Plaza M shopping center is a testament to the owner's good taste and commitment. This investment has not only enriched our community but also contributes to the revitalization of our city's economic life. This is commendable, and I believe any mayor would proudly welcome you to their community! Our city supports innovative ideas and provides a business-friendly environment."
With 118,000 inhabitants, Targu Mures is the seat of Mures County in the historical region of Transylvania, Romania.
Retail Renaissance
Commenting on Plaza M's refurbishment Carmen Ravon, head of Retail at CBRE Romania, said: "We are very excited to cooperate with Indotek on Plaza M's refurbishment and re-tenanting. This project has all the right ingredients for a successful shopping center: existing tenants such as Auchan, Cinema City, H&M, Decathlon, and new entrants like HalfPrice and Tedi. Plaza M is clearly a Targu Mures icon, and with Indotek, we are ready to deliver an exceptional shopping experience."
According to CBRE, the modern retail stock in Romania is projected to exceed 4.5 million square meters by the end of 2024, setting a record for the country. With an additional 186,000 square meters under development, this expansion is a clear sign of confidence in traditional retailing. However, as Carmen Ravon, notes, "The fact that the modern stock of retail space is breaking records may sound impressive, but it's not the end of the road and definitely not enough. Many international retailers are eyeing Romania with expansion in mind, and the demand for large floorspace has been steadily on the rise."
CBRE says several factors make Romania an attractive destination for international retailers, including increased retail spending, strong regional cities allowing for a successful expansion, a high appetite for new brands, a skilled and educated workforce, and proven profitability among existing international retailers.
Indotek Group's ongoing expansion in Romania is part of a broader strategy to invest in real estate, execute M&A transactions, and purchase non-performing loans. The company holds investments for several years, sometimes decades, aiming to generate exceptional returns for its investors. With its Romanian portfolio valued at over €150 million, Indotek Group is well-positioned to continue its growth in the region.