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By Antonis Loizou F.R.I.C.S. – Antonis Loizou & Associates Ltd – Real Estate Valuers & Estate Agents
It is interesting to record 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 such as the ex-Orphanides and others, that offer in addition to food, other products as well, are now 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.m. ground floor area, is taking over and Lidl’s success (around 1,500 sq.m. retail) is a point in hand. Place the supermarket in the centre of the plot surrounded by 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 centres (malls) seems to have caught on after some projects were developed in the past of doubtful initial performance. Modern shopping centers (malls) attract families who make an afternoon/day of shopping or just spending some free time, but more importantly the controlled environment and the security offered to children is a major attraction to the high (and not so) Cypriot spenders, who are none other than the teenagers (spending parents’ money). Fashion outlets appear to be a must in such ventures, as are the food chains and cinemas.
Considering the malls in Nicosia (Mall of Cyprus) and Limassol (My Mall), both seem to be improving in terms of visitors numbers (including new foreign residents and Turkish Cypriots) and spending. A recent evidence of success on sales are in both malls, where the rentals of EUR 38/sq.m. from four years ago jumped to 70/sq.m. (Nicosia).
Of course, the success of one causes damage to another. High street shops are on a downward trend with very limited types of products to be suitable, such as car sales, home furniture and high street cafes. Looking at Nicosia’s most expensive high street (Makarios avenue) as well as that of Limassol, rents are now much less than the Mall’s counterparts. A similar situation is experienced in Limassol with the MyMall being considered by the locals and foreign visitors to be more attractive than Limassol’s main commercial street, e.g. Anexartissias.
One cannot but consider 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.m. of retail space, whereas the previously mentioned are around 25,000-35,000 sq.m. each. DIY stores (Do it Yourself) seem to spring up everywhere, whereas “Clearance Shopping” is becoming more of a routine with most attractive prices. It is not without reason that shopkeepers in Larnaca and Paphos were protesting at the time of the new (and now completed) King’s Mall and the pending ones at Larnaca. It is clear that at the end of the day all malls will suffer or at least those with less attractions will suffer considerably. This turn of the shoppers to the malls has caused the reduction of rents in high street units and of course reducing or doing without the so-far lucrative “goodwill” that existed.
Examining foreign consultants’ reports, it appears that the presence of certain brands is a must in shopping malls, helping towards their success and in addition to this, the mix of uses also plays its role. Zara appears to be the main brand for Cyprus provided it is accompanied by other similar brands. Food stores are an attraction, but exceeding the demand that was originally designed, that ncluded entertainment, such as cinemas, bowling, skating, etc.
At the end of the day I wonder how many shoppers are around and how many are cinema goers? If we take the Nicosia region and include the pending new mall, there are approximately 20 cinemas, plus another 5-6 pending. In addition, the numerous supermarkets of various sizes and several DIY stores – one then wonders where are these shoppers coming from and do they have the spending power that they used to 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 lots of losers, I’m afraid.
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