The share of chain tenants in tenant-mix shopping and entertainment centers of the Dragon Capital investment company increased due to a decrease in the share of non-systemic tenants, a trend noted by Tomas Fiala, founder and CEO of Dragon Capital, which actively invests in real estate.
“We get our rental income more as percentage of turnover. The base rental rate during COVID-19 has become significantly lower, and percentage of turnover – higher. Therefore, we are more attached to the success of our tenants and are interested in their profitability. It happened so that the share of non-systemic tenants – private entrepreneurs who supply goods non-systematically – decreased, while the share of chain tenants increased,” he said in an exclusive interview with Interfax-Ukraine.
According to the head of Dragon Capital, the company monitors the real turnover of tenants, which is one of the terms of the lease.
According to Fiala, the share of electronics stores in the tenant pool has increased, sales of which have grown significantly during the pandemic.
According to him, in shopping centers there is still no trend towards a reduction in retail space due to an increase in the share of online trading.
“We already have good traffic in some shopping centers. Although even with a decrease in the number of customers amid COVID-19 [last summer, the attendance in malls was 20-25% lower], on more rare visits, they bought more, made larger purchases, so the turnover recovered,” Fiala said.
Speaking about investments in shopping mall projects, the head of Dragon Capital noted that large shopping centers are a risky investment, and the company prefers small projects.
“We prefer such small malls as Piramida or Aladdin, located in a densely populated residential area near the subway. But such objects also require attention, they need to be dealt with, they need to be modernized, adjusted to the needs of customers,” he said.
Fiala, in particular, specified that the company had invested about $9 million in the construction of a gallery expansion and completion of an office center of Piramida mall.
The head of the investment company added that Dragon Capital was also considering the acquisition of Dream Town mall.
“We considered Dream Town. Ocean Plaza is also kind of for sale. But in such huge malls there should be a very interesting price, because they will work for the next five years, but with the development of e-commerce, the tenant-mix will also change there. There will be more entertainment and dining, less commerce, as it has been in America for the past five years. So far it is not very visible, but sooner or later it will also start to happen in Ukraine,” Fiala summed up.
