This year will not be an easy one for shopping centers in Turkey, but the sector still expects an increase in revenues and number of visitors, according to the chairman of the Association of Shopping Center Investors, or AYD.
Speaking to reporters yesterday, Hakan Kodal said the Turkish consumer has adapted to the "shopping mall culture." Kodal also presented the "Shopping Centers Index," or the AVM Index, prepared by AYD and Akademetre Research.
The index is prepared by participation of 15 shopping centers in Istanbul and 20 centers from Anatolian cities. The participating centers represent one-third of the sector, with a total area of 1.3 million square meters.
The AVM Index currently includes data on monthly visitor numbers, revenue and employment from January 2008 to March 2009. "According to the index, shopping centers grew by 1 million square meters in this period, reaching 4.8 million square meters," Kodal said. "Visitor numbers in the same period increased from 54 million to 67 million. In other words, shopping centers in Turkey attract a number that is near the population of the country each month."
The share of shopping centers in organized retail is also growing rapidly, the index showed. "In 2008, the sector reached a revenue of 16 billion Turkish Liras," Kodal said. "Looking at the first quarter this year, we see only a 4 percent drop in revenues."
Consumers have reacted positively to campaigns organized by sector players at the end of last year and the beginning of this year, Kodal said. "This year will not be easy, but we expect increase in revenues and number of visitors," he said, adding that their target is an overall revenue of 20 billion liras and 1 billion visitors by the end of the year. In the first quarter this year, highest revenue was cashed in January, he said. "In that same period, revenues of hypermarkets rose 4 percent, while other shops posted a revenue drop of 6 percent. At times of crises, we also see an increase in the consumption of fast food."
In the same period, shopping centers in Anatolia suffered no drop in revenues, Kodal said. "They will pick up faster than those in Istanbul."
The problem in the sector is not the high number of shopping centers or high rents, Kodal said. "The real issue is that revenues are falling in real terms, while the retail sector cannot diversify products and brands."
"Development projects for new centers are slowing down due to the crisis," he said. "I am not expecting new investments for the next one or two years. Foreign investors have very high expectations of revenue. After one or two years, during which we tell Turkey to foreign investors better, the country will be attractive. Today, the country has around 185 shopping centers. The figure might rise to 230 or 240 by the end of the year."
The employment shopping centers create currently stands at 350,000, while Kodal says the association aims for half a million. Speaking at the same conference, Halil İbrahim Zeytin, chief executive of Akademetre Research, said the index would shed light on the future of Turkish retail.
"The AVM Index will carry shopping centers from a subjective structure to a transparent and measurable quality," he said. "Shopping centers joining the index will be able to compare their indicators to the overall sector, contributing to healthy decisions."