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Taking stock of the malls

By Antonis Loizou

It is interesting to note the change of shopping habits of the Cypriot consumer. Initially, the corner grocer was replaced by larger shops and then the latter by the very large supermarkets. The very large supermarkets, in turn, such as the former Orphanides, which offer other products in addition to food, are today also experiencing a change.

Shoppers now cannot be bothered to spend hours in a supermarket trying to find where everything is. The small supermarket, called Express, of around 1,000 sq.mts., assembled on ground-floor premises, is taking over, and Lidl’s success (commanding around 1,500 sq.mts. retail) is a point in question.

Place the supermarket in the centre of the plot, surrounded by designated parking and keep the shop space on the ground. This “sudden discovery” of the change is evident in the profitability of such projects.

The relatively new (for Cyprus) idea of shopping centers (malls) seems to have caught on after some projects were developed in the past of doubtful initial performance. Modern shopping malls attract families who make an afternoon or day of shopping or just being together, but, more importantly, the controlled environment and the security offered to children is a major attraction to the high (and not so high) Cypriot spenders – who are none other than teenagers, spending their parents’ money. Meanwhile, fashion outlets appear to be a must in such ventures, as are the food chains and cinemas.

Considering the Nicosia (Mall of Cyprus) and Limassol (My Mall) shopping centres, both seem to be improving, in terms of visitor numbers, including new foreign residents and Turkish Cypriot shoppers, and spending.

A recent evidence of success in sales was recorded at both malls, where the rentals of €38/sq.m. of four years ago jumped to €70/sq.m. (Nicosia) – and this after keen competition from interested business. Of course the success of one kind of enterprise causes damage to another.

High street shops are on a downward trend, with very limited types of products being able to keep their allure, such as new cars, home furniture and the offerings of high street cafés. Looking at Nicosia’s most expensive high street (Makarios avenue), as well as that of Limassol, rents are now much less than the Mall of Cyprus’ equivalents.

A similar situation is seen in Limassol, with the Mall considered by locals and foreign visitors to be more attractive than Limassol’s main high streets, such as Anexartisias.

One cannot but wonder how many shoppers are around. A new shopping mall is under construction in Nicosia (the largest by far in Cyprus) with approximately 80,000 sq.mts. of retail, whereas the previously-mentioned commercial centres are around 25,000-35,000 sq.mts. each. Meanwhile, DIY stores seem to have sprung up everywhere, whereas “clearance shopping” are becoming more of a routine with most attractive prices.

It is not without reason that shopkeepers in Paphos and Larnaca were protesting respectively, ahead of the new Paphos Mall completion (now in operation) and the pending ones at Larnaca (given that the latter town went the other way with three proposed malls!). It is clear to us that, at the end of the day, all malls will suffer, or at least those with fewer attractions will suffer considerably.

This turn of shoppers to the malls has caused the reduction of rents in high street units while, of course, reducing or doing without the so far lucrative “goodwill” that existed.

Examining foreign consultants’ reports, it appears that certain brands are a must in shopping malls, helping towards their success and, in addition to this, the mix of uses also plays its part towards commercial centres’ appeal.

Zara appears to be the main brand for Cyprus, provided it is also accompanied by other similar brands. Food stores are yet another attraction – but exceeding the demand that had been originally predicted – in addition to entertainment and leisure offerings, such as cinemas, bowling, skating, etc.

At the end of the day, we wonder how many shoppers are around and how many are the cinema-goers? If we were to take the Nicosia region and include the pending new developments (the largest Mall with its 80,000 sq.mts. of building – compare it to My Mall which today commands 22,000 sq.mts.!), there are approximately 20 cinemas, plus another five or six pending.

If we include, in addition, the numerous supermarkets of various sizes and several Do It Yourself outlets, then one wonders where these shoppers are coming from and if they have the financial muscle they used to have a few years ago, and how many small shop-keepers are destined to close down within the next few years… Changing times with some winners and several losers.

Antonis Loizou & Associates LTD Property Consultants, www.aloizou.com.cy, nicosia@aloizou.com.cy

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