Allan Saunderson is managing editor of Property Finance Europe and a contributor to

BUCHAREST, ROMANIA-Developers and retailers clashed at the International Council of Shopping Centers Romanian Retail Real Estate Conference over how best to respond to the alarming downturn in the country’s economic fortunes. Despite a consensus to work together to boost footfall and dwell time, strong disagreement emerged on how this could be achieved.

Retailers want more transparency in rental, service and marketing charges levied by shopping center management, and the wider adoption of turnover rents. Developers accept the need for transparency but say retailers must provide reliable sales reporting; without this, center management cannot agree to turnover rents.

Developers call for more professionalism, better-trained sales staff and well-supplied collections at competitive prices. Retailers say that these all translate into costs they cannot currently afford.

“Developers and retailers must balance conflicting interests. In the past, there were excessive expectations on both sides, which didn’t matter when everyone thought that challenging and ambitious plans were attainable. Now we know they weren’t,” said Pfetro Malaspina, Director at Sierra Developments Italy. “The solution lies in negotiated, flexible temporary adjustments that can be adapted when the present crisis is over.”

The Romanian ‘dash for development’ was always unrealistic and could never have succeeded, even if the boom had continued. In the city of Arad, North West Romania, an incredible but completely unsustainable eight shopping centres were planned for a population of just 150,000. Developers who own land are postponing development as long as possible.

“The ‘Wild West’ times are over for Romanian retail real estate,” said Ali Ergun Ergen, CEO at Baneasa Developments and Chair of the ICSC Romanian National Committee. “Many shopping centers in the pipeline are unlikely to be delivered and the majority of retailers have frozen their expansion plans, or even worse, begun shutting down existing units.”

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