Hasan Simsek, pointing out the profitability’s problems of the retail sector, explained that it is not possible to rent the shops in the shopping centers due to high interest expenses.
Renaissance Real Estate, which is preparing to open the Hilltown Shopping Center project in Küçükyalı, Istanbul with an investment of 250 million TL and a retail sector which is a difficult period for investment and growth, focus on staying healthy instead of making a profit. Renaissance Real Estate General Manager Hasan Simsek noted that the sector will be able to work with little or no profits in the next two-year period and noted that it would be very difficult to turn to TL because of the high interest expenses for renting.
Speaking at the media conference held in Istanbul the previous day for the promotion of the project, Simsek expressed that renting with TL is too popular. In this regard, Simsek, criticizing retail associations that make a tough defense, “If we borrowed 7 percent for investments, then we will return to the rent with Turkish lira. Now we can borrow at 15 percent interest. This means paying 250 million TL more in one project. Simsek said ‘’ during two years, no one will make a profit or will make little profit, but the important thing is to stay healthy.’’
We Are Taking A Risk!
Hasan Simsek stated that retail brands have reached a point where they cannot control costs with disproportionate growth for a while, and that some AVM investors are renting two or three times the value of their investments.