Shop rent rift heats up

The ongoing strife over rents, between shopping centers and the stores who operate out of them, is heating up as more stores join the protests. After the Trabzon shopping center, Forum Trabzon, saw shopkeepers close their doors earlier this week after similar action in Ankara, it is now looking like shopping centers in Istanbul may also be subject to a collective protest from shopkeepers.

The events in Trabzon and Ankara caused the Brand Association, or TMD’s, to start a lobbying campaign. The first stop of the TMD campaign was Kanyon, an upscale shopping center in Istanbul. Five stores are considering leaving Kanyon shopping center by the end of the year, and TMD President Selçuk Güzenge projects 15 to 20 more stores may also leave, if the terms of their contract are not made more amenable by the end of the year. "We have asked Kanyon management to give us an answer by Thursday," said Güzenge, referring to ongoing talks with Kanyon about requested contract changes.

In search of a solution
The Kanyon management made it clear to Güzenge that as partners of the shopping center, Eczacibaşi and İş GYO, are publicly traded companies, the board of trustees of each company must make a decision before they can come to an agreement with TMD, but said they are very receptive to the ideas offered by the trade association. "We are waiting for an answer from them," said Güzenge. "What have asked from Kanyon that instead of a share in the revenue of the shopping center, we want fixed-price rents."

"We also sat down with management at Multi Turkmall. That meeting was very productive. They told us they are going to remove all obstacles for shopkeepers," said Güzenge. "At the moment we are trying to get an appointment with Akmerkez," he said. The rents in Akmerkez have gone up 6 percent due to rising exchange rates, according Güzenge.

The rift between owners and managers of shopping centers, and shopkeepers, highlights the lack of connection between shopkeepers and brand associations, said Güzenge. "We are not very successful at working together as an industry. You cannot rise up against shopping centers and demand you receive a part of their revenue," said Güzenge referring to demands some shopkeepers have made of some shopping centers. The TMD is also against closing doors, which some shopkeepers have resorted to in Trabzon and Ankara.

Solution in Trabzon
The rise in exchange rates, decreasing demand for goods in shopping centers and a 6 percent increase in rents at some malls, are the straws that broke the camel’s back, said Güzenge. "There was a regional movement in Trabzon. It is really wrong to close doors. We have now reached an agreement. The shopping center management has agreed to discounts rent up to 40 percent. The problem has been solved and shopkeepers have opened their doors again. It was just a two-day protest," said Güzenge. A similar incident in Ankara was even shorter. It only lasted one full day.

The lack of confidence, rippling through the retail business, has begun affecting the industry in other ways.

Trouble is also brewing elsewhere. Two shopping centers in Eskişehir, Espark and Neo, and their shopkeepers, are also in a stand-off over rent prices.