The representatives of UK's Argo Real Estate investment fund,owning Shopping City Sibiu and Shopping City Suceava shoppingcentres, say the city in northern Moldova cannot sustain the salesof the four retail projects it includes, a reason why they expectsome retail spaces to be given a new destination.
Suceava is the city with the highest density of modern retailspaces, with more than one square metre of retail per capita afterthe development of Shopping City, Iulius Mall, Galleria projectsand Real hypermarket, which also includes a shopping gallery.
"The shopping centre of Suceava is a big disappointment from afinancial point of view. (...) We were shocked when we saw othercompanies are starting to build after us," stated Magnus Lofgren,managing director of Argo.
The company launched the project in Suceava last April, with thetenants of shopping centre with a 47,000-sqm lettable areaincluding Carrefour, BauMax, Media Galaxy and Mobexpert.
"I believe our project has the best location and is attractingthe highest number of visitors, around 10,000 people daily, butthis is still not enough. We had to apply some rent cuts for mostretailers, so that they may stay in the centre. Still, part of themcannot afford staying and they may close down their shops byyearend," Lofgren said.
Argo invested around 65m euros in this project and expected theinvestment to be recouped in 10-11 years. These plans were upset,though, by the too high number of shopping centres in the city andthe financial crisis, which has further eroded sales.
"(...) As long as we have tenants in the centre and they paytheir rents so that we may pay our loans, we're not stressed out bythis project. The fund has a 7-year life span, until 2013, whenassets could be sold or taken over by another vehicle of thecompany," explains Argo manager.
The company also owns Shopping City Sibiu, which it took over in2006 from BelRom Belgian firm for 83m euros and then expanded inthe wake of investments of above 30m euros.
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