HOW LONG CAN BIG RETAIL HOLD OUT?
How are large format retail developments weathering the storm, and where do they go from here? For months, when property experts have been asked which sector was most likely to be hit by the economic crisis in CEE, retail has been the most common answer.
The expected pain does now look to be arriving, but its symptoms are being kept quiet and its severity varies greatly across the region. In Romania, for example, off record comments about tenants asking for up to 40 percent rent discounts are circulating, while developers admit less specifically that it’s tougher in the eastern reaches of the region.
“The turnovers of the shops are satisfactory in countries like Poland, Czech Republic or Slovakia,” says Jörg Banzhaf, managing director for project development at ECE Projektmanagement International. “The situation in Russia or Romania is more challenging, since the crisis in these countries is more severe. The decline of the currencies against the euro or US dollar poses a problem for the tenants, since they make their turnovers in the local currencies but pay for rents and goods usually in euro or dollar.”
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