Before there were waiting lists; now more businesses are closing down in the province’s biggest shopping centres, unable to pay the high rent.
As shoppers visit the January sales they cannot fail to notice the growing number of empty premises in their local shopping centres. Shutters are down or replaced by large canvas sheets bearing signs that read ‘Opening soon’ or ‘Available premises’. Gone are the times when companies were queuing to open a branch in a popular shopping centre.
Until now crisis-hit businesses closing their doors for the last time was a trend limited to high streets. Shopping centres have in general stood up better against the drop in sales, but after three tough years, they are struggling to fill all of their business premises and attract new investors to their malls. Centre managers confirm that the rotation of businesses has increased or, in other words, that more companies are opening up in the same premises as few seem to be able to establish themselves. At present on average 90 per cent of shopping centre premises are occupied, when previously, even 12 months ago, there were no vacancies and even waiting lists.
Íñigo Molina, the Malaga delegate for the real estate group CB Richard Ellis, maintains that now business premises in shopping centres that become vacant are taking longer to attract new tenants. “The majority of franchise firms have stopped their expansion policies, some are even closing shops down and the few that are still growing now have more options to choose from and are taking longer to close the deals”, he explains.
Restaurants worst hit
As gaps appear in the rows of window displays, it is the bars and restaurants that are suffering most, more than fashion stores, which have seen a smaller reduction in sales. “Consumers start to cut down on eating out and leisure before clothes and so these establishments have noted the crisis more”, says Alejandro Garzón, manager of the Victoria shopping centre in La Cala del Moral.
However the situation varies greatly from one centre to the next. Those that are known as ‘prime’ centres have managed to maintain sales levels and are less affected by the crisis. This is the case of Vialia in Malaga, La Cañada in Marbella, El Ingenio in Torre del Mar and Parque Miramar in Fuengirola. Within these centres the franchises and large commercial chains are better equipped to deal with the crisis than the small businesses that have set up in locations where the rent is higher than on the high street.
Managers do stress, however, that some premises may appear vacant, but there are offers on the table. “We are restructuring and the rotation of premises is a strategy to bring new names to our centres and brands that have not yet reached the province; we are currently negotiating with two restaurants that will be opening soon”, explains Javier Moreno of La Cañada.
Spending down
What is true is that all these shopping centres still seem as busy as usual, at least as far as the number of visitors is concerned. “We are doing our job well, we have created an attractive environment for customers; but if before they left with two bags, now they go with one or none at all”, says Garzón, of La Victoria.
“Last year ten million people visited the Larios centre, approximately the same figure as the previous year, despite the fact that in the last six months we have been surrounded by the metro works”, says Jesús María Condón, the centre’s manager. But the sales figures have not kept up with the headcount. “We are well aware of our customers’ situation”, adds Antonio Romero of La Rosaleda, who refers to the ‘strollers’ who fill the shopping malls without spending any money.
Solutions
Despite the crisis shopping centres are reluctant to lower the rent of their commercial premises. Nevertheless they are looking for new ways of attracting investors. Íñigo Molina of CB Richard Ellis confirms this and points out that the offers to help set up new businesses have multiplied. “All the prices have inevitably been adjusted in the last two years, but now many centres are allowing grace periods, offering to renegotiate or revise rents after two years, making rent variable according to profits, or staggered during the first months to give the business greater margins”, he points out.
Plaza Mayor offers a good example of this collaboration. Manager Rafael Perea explains that for the last two years the common expenses quota has been reduced. In other words they have been making managerial improvements to reduce spending on general cleaning, security and maintenance.
Source: Sur in English