New prospects for the shopping malls sector

Leitura de 5min

Retail sales in shopping centers have managed to perform well, even though faced with an economy showing signs of slowing down, and amidst a scenario of rising inflation and interest rates.

Billings rose 5% from January through May, according to the Brazilian Association of Shopping Centers (Abrasce), and monthly billings in May were up by even more – 7.66% over the same month of last year.

With consumers opening their wallets and most of the established shopping centers registering low vacancy rates, the outlook remains positive for rental prices.

Stores rental values have grown steadily over the past five years. In some state capitals, rents doubled – a trend that has also driven up the price of land.

Alex Cesar, transactions manager at JLL, believes that

the sector is still very attractive, given that retail sales grow faster than inflation and sales in malls are performing well. When the economy turns around and grows steadily once again, the outlook will improve.”

However, Cesar thinks that when it comes to shopping centers located in smaller cities, “many of these new ventures are struggling to be 100% leased by their opening date.

There are also small towns in which shopping malls were built very close to each other and without sufficient demand for them all. This means that the commercial outlook is also less favorable for the owners of the developments.

In more extreme cases, Cesar explained, some of these malls have even postponed their opening dates.

Another problem just now has been a reduction in the number of operators/franchisees for satellite stores.

Management companies have become much more professional, with many going public and seeking funding via the stock market, but most store operators did not keep up with this trend. This lack constitutes a significant bottleneck for new malls in smaller cities,” Cesar said.