The inadequate tenant mix for the area they operated in, competition in big cities and the clash over shoppers caused some shopping centers to fail and their owners decided to use them for something other than retail.
“A particular reason I would like to point out is that many of those shopping centers were built before 2008, starting from completely different premises than the reality after 2008,” says Daniela Popescu, associated director, retail agency with real estate consultant Colliers International Romania.
Some of the malls were developed using bank loans granted before 2008, when loans were easier to get and were no longer sustainable after the crisis, when the purchasing power fell.
The list of failed malls includes Oradea Shopping City, Armonia Braila, Armonia Arad, City Mall Bucharest, Trident Shopping Center Sibiu, Galleria Suceava, Moldova Mall Iasi, MacroMall Brasov. They were sold and the new owners converted them into logistics space, plants or office buildings. Some of them had gone insolvent or bankrupt before being sold.
The biggest shopping center gone bankrupt is Oradea Shopping Center, (30,000 square meters). Formerly known as Tiago Mall, the mall held by Shopping Center Holding closed this summer, six years from inauguration. Its court-appointed liquidator, Expert Insolventa SPRL has recently announced an auction to sell it and the starting price is EUR20 million.
Shopping Center Holding filed for insolvency at the end of May on more than 277 million debt (EUR62 million).
The malls converted into something else include Armonia Braila and Armonia Arad, which now operate as plants.
Armonia Braila is now an automotive and residential lighting fixture plant of China’s Liting Universal Group. The mall was one of the first to go bankrupt.
Armonia Arad did not go insolvent or bankrupt; it was simply converted into something else. It operated as a mall until 2012, when its transformation into an industrial and logistics center began under the name of Log Center Arad. It is now held by Austria’s Immofinanz, which said last year it put it up for sale, after having dropped the logistics part of its portfolio.
The first mall to go bankrupt in Romania was City Mall in Bucharest, held by Australia’s APN investment fund at the time, because it failed to repay the EUR40 million debt to UniCredit. A year after that Greek businessman Ioannis Papalekas bought it for EUR17.3 million and turned it into an office building, following a EUR17 million investment.
The former Moldova Mall in Iasi now operates as a mixed office and retail space project. Developed by businessman Dan Prisecariu, it was sold to Gheorghe Iaciu, who owns real estate developer Impact Developer & Contractor.
“The difficult time for shopping centers is now over and we don’t expect any more significant properties sharing the same fate,” Colliers’ Daniela Popescu says.
(English version by Loredana Fratila-Cristescu)