Businessman Iulian Dascalu, the biggest owner of shopping malls, with four Iulius Malls opened in Romania, says that he is also reeling from the retail crisis, having been forced to cut the rents for some tenants.
"The first six months of the year were the toughest. The crisis started in retail as early as spring, and in February-March we also cut rents for a series of tenants, by 20%, in all the four malls, particularly in those of Moldova area," Iulian Dascalu, who also owns malls in Cluj and Timisoara, told ZF.
In most shopping malls, the owners slashed rents to keep the retail areas occupied amid the retailers’ shrinking sales.
Dascalu says the occupancy rate of his four malls remained at the level of 96-98%, and rent cuts were operated over a set period, until yearend.
The businessman had revenues worth 80m RON (19m euros) in the first 6 months of the year, up 48% (in RON) due to the opening of the fourth mall, in Suceava, in late 2008, but also due to forex variations.
Consolidated turnover derived by the group of firms controlled by Iulian Dascalu reached 130m RON (35m euros) in 2008 and 54m RON (15m euros) in H1, 2009.
"We continued to grow in the first half of this year owing to three factors: the opening of a new project, Iulius Mall Suceava, forex variations given that we levy rents in euros, but also to the fact that the effects of rent cuts were felt as late as March-April," specified Emilian Grosu, chief financial officer of Iulius Group.
Spanish group Inditex (with brands Zara, Bershka and Oysho), French Auchan, Altex, the retailer of electronics and electrical home appliances, fast-food chain McDonald’s and cinema operator Cinema City, tenants with units in at least two of Iulius Mall shopping centres, contributed at least two million euros to the network’s revenues in the first six months of the year, according to ZF estimates based on an average monthly rent of 21-22 euros/square metre, previously announced by the company’s representatives.
Dascalu, through the malls he owns, does not directly have thousands of employees or hundreds of million euros in turnover. Indirectly, though, the 700 stores of the 4 malls employ several thousand people, while sales revolve around 300m euros per annum.
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