Era Shopping Park in Iasi saw a decrease in value from EUR80.098 million to EUR75.9 million, while Era Shopping Park in Oradea saw a decrease from EUR80 million to EUR77 million.
“The 49,800 sqm Era Shopping Park, Iasi, anchored by leading tenants Praktiker, Decathlon, Carrefour and Mobexpert suffers from very strong competition in the region, particularly from a further centre opened in 2012. While traffic and sales have declined from last year, not helped by severe winter conditions, proactive marketing and management is attracting new tenants. However, the construction of the 28,000 sqm Mall extension is ready to proceed but is subject to agreement on negotiations with the syndicated lending banks to proceed with the further development facility,” the fund said in a report.
“The 65,700 sqm Era Shopping Park, Oradea, anchored by leading tenants Carrefour, Altex and Bricostore operates with the 16,000 sqm shopping mall completed in 2012 along with the 8,000 sqm Mobexpert furniture store. While trading activity continues to show year on year growth, competition remains strong from two competitor centres and trading generally is mixed due to subdued consumer expenditure. Furthermore, the Company’s ability to attract new tenants is restricted by the lack of fit-out funding while negotiations for release of such facility are on-going with the lending banks,” according to the report.
The fund plans to have photovoltaic panels installed on the roof of the shopping mall in Oradea, which will reduce electricity costs by around 20%.
The shopping center in Sibiu also saw a decrease in value from EUR112.5 million to EUR110 million.
“Despite the challenging environment in Romania, the Company’s 77,000 sqm Sibiu Shopping City maintains its dominant trading position in the region. Following the completion of recent asset management initiatives last year reconfiguring the space and providing a new Mall entrance, occupancy is currently 92% but tenant demand remains strong and vacant space is likely to be fully filled in 2013,” the report also reads.
The only project which saw an increase in value is the Suceava Shopping City, from EUR62.5 million to EUR64.6 million, despite a decline in sales in the first quarter. Also, Argo has reached an agreement with Decathlon on a 1,500-sqm store.
“The centre continues to face strong competition and surprisingly a further retail project is planned within the vicinity. We have issued a formal objection with the City authorities to their building permit application,” according to the report.
“The continuing effect of low disposable incomes, the lack of investment income and political uncertainties all combine to keep retail sales depressed, particularly in Romania,” the fund also says.
Argo’s four shopping centers in Romania generated revenues of EUR22.3 million in the 2011-2012 fiscal year ended September 30, up about 64% from EUR13.6 million in 2011.