In all, the ten retail projects posted RON87 million losses in 2017, compared with RON162 million profit in 2016, ZF has found from data available on the Finance Ministry website.
AFI Cotroceni, operated by Cotroceni Park, which posted RON45 million losses last year, according to its report with the Finance Ministry, had the highest contribution. It had made RON207 million profit in 2016, a record for the company, which was higher than its revenue even.
The ten largest malls in the rest of the country posted more than RON530 million revenue together in 2017, considering one of the malls included in the top ten by revenue has yet to submit its financial report to the Finance Ministry. The results are the same as in 2016.
The ten largest malls in the rest of the country made RON19 million profit last year, compared with RON254 million in 2016. VIVO! Constanta mall had the biggest contribution to this, after having posted RON32 million loss in 2017 compared with RON110 million profit in 2016. Iulius Mall in Suceava had a contribution, too, having posted four times lower profit than it did in the previous year.
Whereas revenue of the malls in Bucharest seems to be increasing fast year by year, the revenue of the malls in the rest of the country is slower to rise, as can be seen in their results reported to the Finance Ministry.
“There are big differences between Bucharest and the rest of the country, they are two different worlds in terms of revenue progression and trends,” says Ingo Nissen, managing director with Sonae Sierra, one of the two developers of the Park Lake mall in Titan district of Bucharest. Sonae Sierra also owns a mall in Ramnicu Valcea, River Plaza Mall.
There is definitely room for new retail projects, both in Bucharest and in the rest of the country, because some of the existing ones are already getting old and need an upgrade. Things are becoming harder and harder for developers, because the market is getting crowded, he added.
Bucharest has three shopping centers with more than RON100 million in revenue – Baneasa Shopping City, AFI Cotroceni and Mega Mall, one of which has even overshot the RON200 million mark. Only one mall outside Bucharest was able to post more than RON100 million revenue in 2017, the Iulius Mall in Timisoara.
The developers at the top of the ranking outside Bucharest are businessman Iulian Dascalu and Atterbury Europe who equally own the Iulius Mall network, Austria’s Immofinanz and South Africa’s NEPI Rockcastle.
Iulius Group and Immofinanz only have malls outside Bucharest, while NEPI Rockcastle has two malls among the top ten in the capital city, Promenada and Mega Mall, whose revenue amounts to more than RON80 million.
The revenue reported to the Finance Ministry includes only the rental income the mall operators get from retailers and the revenue from the services they provide, such as security and cleaning costs. It does not reflect the sales of retailers in any way.
Real estate experts say rent typically accounts or 15% of the sales of a retailer, varying from mall to mall depending on the tenant mix.
(English version Loredana Fratila-Cristescu)