Plus discount stores network, owned by Germany's Tengelmann group, has in the past five or six months acquired plots of land for 10 new stores and says the real estate prices decline is making it easier for it to expand.
The retailer will open 23 stores this year in the wake of total investments worth 36m euros, with cities with more than 15,000 inhabitants being targeted. At present, Plus has 72 operational stores.
"The land price drop is really an advantage for us, in the sense that the supply has become richer. As regards the number of acquisitions this year, there is a budget for the purchase of plots of land for expansion that we have to go by," stated Ioana Marginean, marketing manager with Plus network in Romania.
The investments the company operated in the fourth quarter of 2008 and the first quarter of this year to acquire the land for the 10 stores can be put at 4-5m euros, with each store located on a plot of at least 4,500 square metres. Plus stores have an average sales area of 1,000 square metres.
"For 2009, we've also planned the acquisition of the plot for the second logistic centre of the network, in Transilvania, with the centre to be built and finalised in 2010," Marginean also said.
The number of land deals has plummeted starting the second half of last year. Major food store networks, very little harmed by the crisis, have been among the only buyers with cash on the real estate market in the meantime. DIY retailers are also keeping their eyes on plots of land put up for sale, whose prices have even halved since the crisis started.
Plus network is operated by Pludi Market, while land acquisitions are carried out by the real estate unit of the retailer, Tengelmann Real Estate Romania. At present, the company owns almost all the spaces of Plus stores domestically.
Marginean also stated Plus did not see any opportunities to take over some domestic networks for the time being as the company's smaller rivals have a different concept from that of Plus and they could not be integrated into the network.
Plus generated 255m-euro sales in Romania in the fiscal year ended in late April 2008, with 53 operational stores, according to the latest available data.
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