Kyiv. August 30th. INTERFAX-UKRAINE – Since the beginning of the war, the receivables of the shopping and entertainment center (SEC), depending on the location, project quality and management, have grown by 10-60%, Evgenia Loktionova, director of the Ukrainian Trade Guild (UTG), told to Interfax-Ukraine. “Currently, almost all retail outlets report an increase in accounts receivable, which can amount to millions of hryvnias. At some malls, receivables have grown by 60% since the beginning of the war. At the same time, this situation is largely the result of incompetent work of the staff and lost time,” Loktionova said.

She noted that, unfortunately, most mall management companies are waiting for the war to end and everything to get better, in fact, allowing retailers to live at their own expense. “This is a road to nowhere, since the situation will not improve in the near future, it will be even worse, because tenants see the situation and take advantage of the weakness of management companies,” explains Loktionova. The expert recalled the rule of commercial real estate, which states that receivables should never exceed the guarantee payment. However, for many shopping centers, these figures already differ by several times, and management companies still allow negligent tenants to work, continuing to increase their debt.

“Such shopping centers that are too loyal to tenants, trying to retain operators by any means, not only work in the red, but also create global problems for themselves. Now everyone is talking about how bad the retail market is, how sales have fallen, and so on. But they forget that it is even worse for developers, since most shopping centers operate on a loan basis and it is useless for banks to tell that there is a war in the country and there is no money, because tenants have stopped paying. At most, banks will give a deferred payment,” the director of the UTG company describes the situation. The expert lists the general problems of the retail real estate market: war, inflation, the growth of foreign exchange rates, the fall in the solvency of the population, problems with logistics. “But one tenant is looking for solutions, discounts goods, changes staff, recruits a new one. In other words, it does something and thus generates traffic and sales. And another tenant, often sitting abroad, tries to manage at a distance. As a result, the store does not sell. Either there is no understanding of the market when it is necessary to offer discounts and sales to stimulate customers to be competitive, etc. Instead, operators sit and wait for the very buyer to find them. But at the same time, such retailers do not realize that they themselves are to blame for the collapse of the business, but they say that the SEC is to blame,” says Loktionova.

According to her, one can often hear advice on resolving the situation with negligent retailers through the courts. However, the operator may invoke force majeure. Therefore, the expert recommends, first of all, not to allow the receivables to be higher than the guarantee payment. “If the figures have already equaled, it is necessary to look for ways to replace the tenant as soon as possible. You can “cut” the vacated premises, if there is such an opportunity and the area allows, you can put a temporary tenant. Otherwise, the number of examples of shopping centers in Ukraine will grow, which, due to their incompetence, have lost tenants, do not generate income and are unprofitable, being unable to even close to zero in terms of costs,” says Loktionova.

The expert gives several examples when a professional management company found optimal solutions. “The market is weaker. But it is not dead, it is in motion. For example, quite recently, our company signed a lease agreement with a new operator, and in early September, the first Citrus store in Zhytomyr will open in the Global UA shopping center in the place previously occupied by the operator O’STIN, who left our market,” Loktionova said.

The UTG company was established in 2001. It developed more than 1300 real estate concepts. During the years of work, 4.7 million square meters of commercial space were leased with the participation of the company in Ukraine.