A strategy focused on change and the tenacious work of the commercial team drive improvement in the operational metrics
Despite the difficult scenario, the performance of IGD’s operational metrics looks promising with the portfolio’s occupancy showing improvement against the first quarter and retailers’ sales back to pre-pandemic levels thanks to very “targeted” shopping which has resulted in an increase of 17% in the average ticket compared to June 2019.
Behind these results is the tireless work of IGD’s commercial team.
In the first six months of the year an impressive 13,200 square meters were re-let to brands offering the merchandise most capable of attracting shoppers to the centers. Careful negotiations were also carried out before closing the new leases.
Let’s take a look at what has been done and the progress underway by asking Laura Poggi, IGD’s Director of the Commercial Department, Marketing and CSR, a few questions.
In the last few months, you have introduced new brands in order to have a merchandise and tenant mix consistent with shoppers’ new preferences. Which areas did you focus on?
In accordance with the guidelines included in the Business Plan approved by IGD’s BoD last December, in the last few months we have continued to introduce home care brands which resulted in the opening of a Coincasa in Conè, near Treviso, and a Happy Casa in Città delle Stelle, in Ascoli Piceno. New restaurant concepts have also been added which reflect visitors’ preferences for street food and regional specialties, as well as poke dishes: the Tortelleria was, therefore, added at the Puntadiferro center in Forlì and I love poke at Le Porte di Napoli. With a view to making the shopping center a “hub” for new services, we also introduced an innovative Concept Toyota showroom at the ESP Shopping Center in Ravenna which, in addition to omnichannel auto purchases, provides a car sharing service. In the same shopping center Dude 21 also opened which is a concept store that sells jeans by Calvin Klein and Tommy Hilfiger.
How is the pre-letting going at Officine Storiche in Livorno, IGD’s most important development project?
Today we expect to inaugurate the new complex in the second quarter of 2023: several negotiations are still underway because we want to select the best tenants possible. The pre-letting is, however, basically complete. That is why we can confirm that the 16,000 square meters of GLA will be occupied by a total of five large and medium-sized stores, an entertainment zone, as well as a 4,500 square meter fitness and wellness center that will be opened already next January.
What is in the works at the shopping centers where remodeling and restyling are underway?
We have already completed the pre-letting of three medium-size locations, for a total GLA of 3,800 square meters, at the Portogrande center in San Benedetto del Tronto, which will house Unieuro electronics, Portobello home care products, and Calliope, a fashion brand. While Unieuro and Portobello have already opened their stores, Calliope will open in September. In the meantime, letting continues at the two shopping centers in Sicily: at La Torre in Palermo we are working on three new medium-size locations and a few kiosks which will occupy a GLA of approximately 4,700 square meters, while at the Katanè center in Catania, remodeling of the hypermarket created enough space for four new medium-sized locations with a GLA of 6,500 square meters.
How are the hypermarkets inside IGD’s shopping centers addressing this phase of changing consumer trends?
During this period of high inflation, families are looking for ways to save which the hypermarkets are supporting including by increasing the number of promotions and sales. The good performances recorded by our freehold hypermarkets, which recorded a 2.9% increase compared to the first half of 2021, provide eloquent confirmation. Coop Alleanza 3.0, in particular, has renewed its stores in Centroborgo in Bologna and La Favorita in Mantova, while remodeling at the Leonardo center in Imola has almost been completed.
In the meantime, what new marketing initiatives are taking shape?
We can confirm that the increasingly widespread use of digital tools continues with the installation of 134 totems in 25 shopping centers, while, as the protection measures have eased, we have begun hosting in-person events inside our shopping centers once again with a focus, above all, on families, consistent with the Business Plan. The keystone remains leveraging on increased partnerships with the brands in order to provide exclusive offers to the registered users of the Area Plus on IGD’s online portal: a path that we undertook initially with one brand, Kiko Milano, a cosmetics chain that targets a young, digitally savvy, clientele.
How is the co-marketing with Coop Alleanza 3.0 going?
The project is fully operational on the various channels involved, as planned. We are working on 12 shopping malls, using the firepower of 100 thousand online newsletters and 800 thousand flyers distributed door-to-door to facilitate the 17 launches that have been planned through the end of 2022. We expect that as the project unfolds in the second half, we will be able to increase the contacts of our Area Plus and offer more promotions and increasingly more targeted events.
Are you satisfied with the activities carried out in the first half of the year?
Taking into account the very difficult market conditions, I believe that we can interpret the occupancy that we achieved as the end result of a correct strategic approach, as well as the hard work done in terms of execution. In the second quarter, in fact, the occupancy of the Italian portfolio was 0.5% higher than in the first quarter of 2022, coming in at 95.1%. We also signed 62 leases due to turnover and 51 renewals. The results in Romania are also comforting: even though at 92.9% occupancy is slightly lower than in the first quarter of 2022, we know that this vacancy is strategic as negotiations are underway for a whopping 3,000 square meters. We also succeeded in recording an upside of 3.5% on the lease renewals of the Winmarkt portfolio.
A framework, therefore, which overall is paying off.