“(For Sibiu Shopping City) As with the prior year 2011 saw a constrained market environment resulting in the need to concede an extension of tenant lease discounts, which are, if annualized, some EUR1.4 million in 2011,” the report notes.
The unit has an occupancy rate of 93%.
For Suceava Shopping City, which has a surface of 50,000 square meters, the occupancy rate stands at 98%.
Here, “rental discounts for 2011 were approximately EUR1 million and it is anticipated that this will not materially increase during 2012 as the local market remains particularly competitive with five competing centers in the immediate vicinity, albeit that this shopping centre remains the principal centre in the region. However, the overall situation is very fluid with approximately a third of the tenant leases up for renewal over the coming 18 month period,” the report notes.
As such, in the timeframe analyzed, the fund collected a total EUR10.5 million from rents, compared to EUR14 million in the previous year.
In 2010, the fund gave tenants a total discount of EUR3.5 million.
At the end of September, the two shopping centers had a total market value of EUR181 million, compared to EUR170.3 million in September 2010.
Argo holds in Sibiu Romania’s largest retail park outside Bucharest, with a total surface of some 80,000 square meters. The unit hosts two hypermarkets (Real and Carrefour), one BauMax stores, two furniture stores (Mobexpert and Mobilia), two electronics retailers (Flanco and Media Galaxy) as well as apparel retailers such as Takko, Hervis, New Yorker and C&A. Argo is also negotiating with Swedish retailer H&M.
On the other hand, the project in Suceava, facing a much more competitive market, holds tenants such as Carrefour, Mobexpert, Media Galaxy, BauMax, Takko and Orsay.
Other Argo operations in Romania include Era Shopping Park Iasi and Oradea. Thus, the British fund is the largest retail space owner in Romania, with assets evaluated at EUR343.3 million and a rentable surface of 215,000 sqm.