The mall was developed by Ireland’s Mivan and by the Awdi family but has performed worse than expected since its opening, even though almost all of its about 100 retail spaces had been rented at an average price of about EUR30 per square meter.
The mall went from bad to worse and now has only 50 stores that are still open and only five companies in the food court area, including McDonald’s and KFC. On Tuesday at noon, for instance, most customers, about 20, could be found in the casino on the second floor.
Nobody was using the ice skating rink and only a handful of customers could be seen at Deichmann, Leonardo, Kenvelo and TinaR stores.
“Sales are very low. The best-selling products are those priced at 50 to 60 lei (EUR11 to EUR13),” a sales clerk of a shoe store said.
Anchor tenants like Billa, Altex, Hervis or The Light Cinema continue to operate in the mall, while other tenants of the original mix like Marks & Spencer, Starbucks, Diverta and Pizza Hut have since left and Sprider Shoes and Burger King exited Romania altogether.
The difficult situation the mall is in can be seen in its financial results. Rosequeens Properties, the vehicle used by Alpha, Eurobank and Bank of Cyprus to buy Liberty Center, posted EUR3.5 million revenue and EUR3.5 million loss last year. In comparison, the revenue of Liberty Center SRL, the initial operator of the mall stood at EUR7.5 million in 2009, and dropped to EUR5 million in 2010 and EUR4.2 million in 2011.
The change of shareholders led to a significant decline in debt, though. Whereas Liberty Center SRL had more than EUR90 million debt, Rosequeens Properties had about EUR64 million debt last year, considering the company bought the mall using a EUR63 million loan from Alpha Bank, Bancpost (the local subsidiary of Eurobank) and Bank of Cyprus.
Inexperienced in managing shopping centers, the banks chose Resolute Lar to handle property and asset management in mid last year and put Corina Toma in charge of the mall. Toma had previously run Ploiesti Shopping City.
Early in March, the representatives of the mall said they were in talks to rent 3,000 square meters, which would drive the take-up of the 25,000 square meter mall to 85%. This shows the current take-up is 73%. Competition over tenants and customers will become fiercer once Vulcan Value Center developed by South-African property fund NEPI about 400 meters away from Liberty Center opens this fall.
Vulcan will have a Carrefour hypermarket and a shopping gallery whose tenants include C&A, H&M, Takko, Domo, dm and KFC.
“Our latest steps and strategies to improve and optimize the tenant mix of Liberty Center are paying off so we saw positive results in terms of take-up, about 77% at the moment. One of the targets we seek to attain soon is an over 80% take-up,” Liberty Center officials said, without revealing information about traffic or the revenue trend this year.
“Liberty Center has signed three new leases with new apparel and food & beverage tenants in the last few months. The center is now in advanced talks over a 1,700 square meter space,” the officials added without saying who the tenants were.
(English version by Loredana Fratila-Cristescu)