The retailers are the tenants of the spaces found inside the shopping center and IGD’s commercial division checks with them periodically in order to get feedback about economic performances, marketing initiatives and the management of the center in order to ensure profitable returns for them and, consequently, positive results for IGD.
One of our strong points is that we provide the retailers that are part of our network with access to 27 freehold malls, as well as 3 centers held under master leases and 12 under management, where they can grow their business. Also, as we are an active owner which markets and manages its properties, we are part of the shopping center’s entire life cycle which ensures that IGD will always be the tenants’ sole point of reference.
At 31 December 2019 IGD had 1,468 leases with a total of 665 retailers in Italy. In 2019, 243 new leases were signed, explained for 105 by turnover and 138 by renewal, with an average upside of 1.1%. The concentration of retailers generating a significant portion of IGD’s rental income is limited: in Italy the ten largest tenants represent 19.0% of the total rental income generated by malls.
Our commercial offering provides a good international mix: international brands account for 40% of the retailers’ sales in Italian malls. There is also a good balance between local and domestic brands which guarantees good relations with the community in which the shopping center is located.
The merchandising mix in our Italian malls has changed over time from a layout with a corridor of stores which were complementary to the food anchor to a more complex layout in which the main brands guide the customers along paths to clothing and electronic stores, as well as restaurants, entertainment, services, housewares, wellness centers and recreational facilities.
We are working to interpret the new trend which is to render the shopping more and more a meeting place, a place to be together, a point of reference for the local community which involves introducing merchandise that cannot be substituted by virtual experiences, including to offset the impact of online sales. In terms of merchandising mix, therefore, we are giving more space to personal services like dental studios and diagnostic centers, gyms and fitness centers, play areas and municipal offices.
We are also working on a new concept of the food court as a place of social experiences. In line with the idea that a shopping center is a space to be lived in, the food court is increasingly a space for living and less and less a space for mere consumption which must be able to adapt to different uses. The food court becomes a place where you can relax, organize a quick work meeting, enjoy a quiet dining experience or take a quick break to also charge your smartphone and tablet.
The ability to rethink the merchandising mix, as well as remodel the spaces, has proven key to maintaining a high level of occupancy even during the consumer crisis that persisted in Italy for several years and as lifestyles change resulting in greater focus on health and wellbeing.
At 31 December 2019 IGD’s Romanian shopping centers had 590 leases. In 2019, 390 new leases were signed, explained for 160 by turnover and 230 by renewal, with an average upside of 4.0%. The concentration of retailers generating a significant portion of IGD’s rental income is limited: in Romania the ten largest tenants represent 36.0% of the total rental income generated by malls.
IGD’s commercial offering provides a good international mix: international brands account for 38% of the retailers’ sales in the Romanian malls.
Over the last few years Winmarkt has worked to renew the merchandise and tenant mix with a view to including international brands capable of increasing the malls’ appeal.
A project focused on filling the higher floors of our shopping centers with offices and services is underway. In 2016, for example, areas of the shopping center in Ploiesti were converted and now house a section of the local courthouse and a medical clinic.
The work done over the past few years to adapt Winmarkt malls to more international standards generated good results in terms of occupancy.