Commercial centres of Argo Real Estate in Romania depreciated

The biggest depreciations were registered by Era Shopping Park in Iasi and in Oradea, whose value reduced in the last year from EUR 80.098 million to EUR 75.9 million and from EUR 80 million to EUR 77 million respectively.

"Era Shopping Park Iasi, with an area of 49,800 sqm, is very affected by the strong competition in the region. Although the traffic and sales have decreased last year, and the weather conditions weren’t helpful, we succeeded in attracting new tenants through proactive marketing and management. The construction of the 28,000 sqm mall is ready to begin, but depends on the financing ", a report of the fund shows, according to Mediafax.

In the case of the retail park in Oradea, although the traffic increased year to year, the sales reduced in the first quarter of 2013, in trend with the entire retail market in Romania, Argo representatives consider. The fund will install a photovoltaic panel on the roof of the commercial centre in ORadeda, which will lead to approx. 20% drop in electricity costs.

The commercial centre in Sibiu has been revised down too, from EUR 112.5 million to EUR 110 million.

The only project revised up is the one in Suceava from EUR 62.5 million to EUR 64.6 million, although in this case also the sales have registered decline in the first quarter. In the meantime the company has reached an agreement with Decathlon for a store on 1,500 sqm.

Argo representatives anticipate though a competition increase in the city, another retail project being planned in the vicinity of Suceava Shopping City, and they have been contested the construction permit at the local authorities.

British investors fear is justified considering that Suceava is the city with the most modern retail spaces reported per thousand living in Romania and some of the projects have lost almost all their tenants.

Talking about the retail market in Romania, Argo representatives estimate that the sales will maintain the law level in the next period, while the lack of financing will reduce the number of the retail operators to develop new projects, apart from the small ones, anchored by supermarkets.

The four commercial centres owned in Romania by the British fund have generated in the fiscal year 2011-2012, closed in September, revenues of EUR 22.3 million, with 64% increase from EUR 13.6 million in the previous year. (source: wall-street.ro)