Shopping malls reset values of lease due to improvement of sale

After a period of discounts and special conditions on payment of rentals of shopping malls, the administrators of the sector plan to reset the values of leasing enterprises – since the first signs of resumption of sales begin to emerge. The Manager of shopping malls, Sonae Sierra, owner of nine ventures as the Plaza Sul Shopping Mall and Campo Limpo, relates the change with the best sales performance of retailers. "This quarter revenues are back to accelerate and we saw also a resumption of positive spreads leasing [comparison between the average rent of the new contract and the average monthly rent invoiced the contract to the same space] in renewal after some difficult years of negotiation with retailers, "says CFO & GO Officer of Sonae Sierra Brazil, Carlos Correa. In Conference call held yesterday (7) by the company, it was reported that the rents in the same stores (SSR) increased by 4.9% in the third quarter, driven by higher sales and the continuous reduction of temporary discounts. Sales at the Same stores (SSS) recorded an increase of 2.6% in the third quarter compared to the same period in 2017. In addition, the announced growth in occupancy rates. The number reached 94.2% at the end of September, driven by the increasing rate of rent in the Shopping Waters. Thus, the business of the Group's malls grew 4.6 percent in the third quarter compared with the same period in 2017. Another example of real estate controller who has claim to close the faucet is the group discount Iguatemi. "We've had a widespread improvement in sales in the third quarter of 2018. Of course, the extension of the winter helped us, but we also see the great resumption of trade in international brands and the customer with greater appetite for consumption, "said the Chief Financial Officer of Cristina Betts Iguatemi. According to her, for the next year, the administrator will focus in part on reducing the value of the condo, in order to use this measure to mitigate the effects of rent adjustment on the profit margin of retailers. "We are conducting a more smoothly this movement to withdraw discounts" complemented her. By means of teleconference conveyed yesterday (07), the Administrator announced operating results for the third quarter of 2018. Among the highlights, is the growth of 23.6% in net profits between the analyzed period compared to the same period last year. In addition, according to the balance sheet, the rental revenue increased 1.2% on the same basis of comparison. The positive result has enabled the controller also begin a process of resumption in investment in employee base, raising the average salary. However, such measures have caused the business had to pay non-recurring and recurring costs, such as hiring consultants and construction of two outlets. According to the balance sheet, expenses jumped 42.6% in the same comparative basis.