Debt destroys the assets of shopping centers

Shopping centers, which lost an important part of their value with regulations such as the return of rents received in foreign currency to TL, and the regulations made in the expenses of common areas, lost their capital. He noted that 74 percent of the total $13 billion in bank debt will mature in the 2022-2024 period, noting that shopping centers have finished 25 percent of their debt assets. The sector, which lost blood in terms of foreign investors due to legal regulations, also gave the message “End the regulations already”. Speaking at the 13th Procurement Economics Summit held this year, Ernst and Young Turkey Managing Partner Cengiz Gogebakan noted that the sector’s financial expenses reached 3.4 times its total revenues due to the exchange rate and the effect of the interests. Noting that 74 percent of debts will mature by 2024 and that there is a maturity logjam here, Gökebakan said: “Shopping centers are structures with a very long economic life. There is no need to compress loan terms to 5 or 6 years and create a structure that is incompatible with cash flows. The 25 percent stock rhythm is over. Fortunately, they have strong shareholders, but they have brought it to the present without default by injecting capital”.

FOREIGN ESCAPE

Cem Eriç, vice president of the Association of Investors of Shopping Centers (AYD), said that 446 shopping centers were reached in Turkey in 2022, but the value of the investments decreased. Today, if we try to build a shopping center from scratch, it is necessary to spend many times more than these values. As a result of these regulations, the participation of foreign investors decreased from 30 to 20 percent.

Domestic and foreign eyes on regulation

Hüseyin Altaş, president of the Association of Investors and Shopping Centers, pointed out that the sector has invested 150 billion dollars and that 4% of the national income is generated by shopping centers. Explaining that the regulations that were accelerated after 2018 put a lot of pressure on the industry, Altaş said: “The regulations must end now. What foreign and domestic investors most expect is the stabilization of regulations. Altaş stated that today the turnover and rental rate has dropped to 8-8.5% and is well below the world average.