ING Real Estate: Nobody forced retailers to sign long-term contracts in malls

Owners of the Felicia Shopping Center in Iasi say the obligation of shopping centre developers is to attract visitors, while tenants are supposed to "get the money" out of their pockets.
The sales decline recorded by most retailers on the Romanian market has given rise to a clash between shopping centre owners and tenants, with the former struggling to keep their spaces occupied without losing too much of their revenues, while retailers are attempting to cut costs in order to keep their stores profitable.
"We examined the situation to see which tenants needed help, and we did provide support, but only if it was a win-win situation. Our obligation is to generate traffic in the shopping centre, and their job is to get money out of people's pockets. Nobody forced them to sign long-term contracts. What would have happened if the sales performance had been extraordinary? I have yet to hear about owners saying 'you sell too much, why don't we raise your rent during the run of the contract?'," Gijs Klomp, asset manager for Romania of ING Real Estate Investment Management (ING REIM), told ZF.
The manager of the company whose portfolio includes Felicia Shopping Center in Iasi, bought for around 40 million euros in 2007, says the number of visitors to the project this year will remain close to the 2008 level, at around 5 million people for the entire year, i.e. around 13,500 daily visitors.
"We have four empty stores out of a total of 87. We have had departures, of course, but we managed to find replacements quickly. We even had to turn certain retailers down, sports equipment retailers for instance, to prevent them from eating into the sales of tenants already active on that segment. I think the number of visitors is satisfactory for a city the size of Iasi, which also saw the opening of the ERA project a year ago and the expansion of Iulius Mall," added the ING REIM representative.
The Felicia shopping centre consists of a Carrefour hypermarket, owned by the French retailer, and a shopping gallery with a gross lettable area of around 11,000 square metres, whose tenants include companies such as Marks & Spencer, Media Galaxy, Orsay, Sephora, Intersport and Leonardo.
The Dutch company is one of the biggest players on the world's real estate market, with an investment, development and funding portfolio of over 100 billion euros in Europe, Australia, Asia and North America.
However, the company has only one property on the Romanian market, although it has been present on the market for more than two years.