New projects in Nicosia
The newest fad of shopping malls in Cyprus, an unknown phenomenon up until ten years ago, is already going through its first crisis call, with some store owners doing very well and others considering closing down due to dropping sales and high investment costs. This has prompted some mall developers to consider selling out to property funds or institutional investors, while others are going ahead with plans for new properties and joint ventures.
A recent study by Anthony Loizou & Associates, suggested a stabilisation in commercial property value, while residential plots were said to be doing better, as some investors consider selling their land to funds that are interested in a long-term return on investment above inflation or above deposit rates.
Two of the island’s biggest shopping centres, MyMall that opened in Limassol’s Zakaki a few months ago and the Mall of Cyprus on the outskirts of Nicosia, open since September 2007, are faced with a growing number of disgruntled shopowners on the one hand, and a small number of investors keen to take up new shop space.
At the Mall of Cyprus, the operators of Carrefour are reportedly unhappy with their turnover simply because it closes on Sundays, while clothing specialists Zara seem extremely satisfied with business. Many of the stores are operated by the NK Shacolas Group, while neighbouring IKEA in itself is a major attraction whose performance has reached beyond expectations with the Mall of Cyprus attracting 5.7 mln visitors in its first year and generating EUR 100 mln for all the shops, cafes, restaurants and cinemas.
Encouraged by this success, Nicosia is expected to get two more shopping malls in the near future – the Madisons (former IMC) operated by AD Shopping Galleries that has been refurbished by store specialists JHP Design and will be ready to open in late November or early December, and the Canaletto development in Lakatamia that will share land with joint venture partner Kykko Monastery and is still in planning stages.
Madisons has 18,000 sq.m. of commercial space over four floors and will have leisure facilities, a bowling alley, eateries and shops, while the Canaletto project will have 56,000 sq.m. of shopping space and 1600 parking spaces, expanding in its second phase to include a DIY store and more supermarkets with work starting on the project next April if it secures the necessary permits by then.
The Manglis Group property developers are also rumoured to be involved with a third mall project in the western outskirts of Nicosia, with Tiffany Investments, operators of the MyMall, initially considering expanding their business to the capital, but remain undecided on the issue.
In Limassol, MyMall started on the wrong foot with the owners blaming it all on the delay by the local authorities to develop the necessary road access. Despite some experts suggesting that MyMall may seem to be in the wrong location, they add, however, that it is unfair that this area has not been declared a tourist area, whereas the rest of Limassol (and rival shopping centres) is a wide tourist area that allows storekeepers to stay open late at nights and remain open on Sundays.
Initially, some shopowners threatened to leave as a third of shops spaces were unutilized and the top floor was empty. However, others, such as Malouppas-owned stores, are reportedly doing very well, with Taco Bell opening its first quick service restaurant there this month.
The operators of MyMall also introduced a bus shuttle from down-town Limassol in order to encourage more people to spend time there, while the company has done well with awareness by hosting Mega TV’s teen dance and talent show auditions there.
“In order for a mall to operate properly and bring a good return on investment for its owners, it needs to work seven days a week, if not 24 hours a day,” said property guru Anthony Loizou.
“The Shacolas-owned Mall of Cyprus has a good mix of shops, together with restaurants and cinemas to attract business beyond normal hours. On the other hand, MyMall in Limassol has a better mix of about 160 shops,” Loizou added.
Retail king Nicos Shacolas will not rest on his laurels with the most successful stores and malls in all towns and plans to develop a mall and leisure centre next to the airport hotel in Larnaca that may be ready by the end of 2011.
It all boils down to development strategy and business sense, with the likes of Orphanides discovering that it is better to have ten shopping centres of, say, 3,000 sq.m., rather than a single mega centre with 30,000 sq.m.
“Cypriot consumers are still a unique breed. Despite cut prices at shopping centre X or Y, they will not go out of their way if the target store does not have suitable parking. For example, despite Athienitis (in Pallouriotissa) being the most competitive in prices, many people do not go there because of traffic congestions and limited parking space,” explained Antonis Loizou.
“On the other hand, Alpha Mega in Engomi probably works better per square metre because it fully utilises the adjacent road network that makes it accessible from all parts of town.”
