GTC Romania opens EUR 66 million shopping mall in Arad

Globe Trade Centre (GTC) Romania has opened the Galleria Arad shopping center following a EUR 66 million investment, out of which EUR 30 million was financed by the European Bank for Development and Reconstruction and Raiffeisen Bank. It is the fourth such center developed by the company in the past three years, joining malls in Buzau, Suceava and Piatra Neamt. Works on a similar mall could start in the capital once the building permits are received, said Shimon Galon, CEO of GTC Romania.

Galleria Arad has a total surface area of 35,000 sqm and opened with a 99 percent occupancy rate. The project is fully owned by GTC, which estimates that in the first year it will see an income of between EUR 4 million and EUR 5 million and after that, about EUR 6 million yearly following stabilization.

With a population of about 170,000, the city of Arad has two other large commercial centers – Atrium Center, a EUR 70 million project that opened last year, and the Armonia Arad retail park, which began trading in 2008. Galon says that the local competition is not a problem and the market is not too crowded. “We have some common retailers but other than that we come with a different tenant mix,” he said.

The CEO added that competition from neighboring Hungary, where many of the locals do their shopping due to the proximity of the border, isn’t a threat given the lack of a highway connecting the two countries.

Galleria Arad is anchored by a 4,500-sqm Cora hypermarket. The partnership with the French retailer was an important milestone for the project and helped to bring in new retailers, said Galon.

Other tenants in the shopping center are Sprider Stores, Sephora, Fox, Levi’s, Kenvelo, Mango, Terranova, Optinova, Eponge, Flanco, Diverta, Noriel Toys, Leonardo, Zara, Bershka, Stradivarius, Pull&Bear, Tina R, Skiny, Gatta and Cinema City.

GTC has been active in Romania since 1999 and is one of the few local developers that have delivered commercial centers as well as office and residential projects. The firm is behind the Europe House and America House projects, which have both been sold, and the more recent City Gate office buildings in Bucharest. A fourth project, Ana Tower which is being developed in partnership with the owner of Ana Holding, businessman George Copos, should be completed in 2013. Ana Tower will be located near Piata Presei.

Galon hopes to start works on the site this year and says it has two financing propositions for the project. “It is the first time in many years that I can choose between two banks for financing,” said the GTC Romania CEO, adding that unlike the situation in retail, when it comes to developing office projects, the banks’ risk is considerable lower.

Simona Bazavan