Shopping Centers Today International

DEC 2015

Shopping Centers Today is the news magazine of the International Council of Shopping Centers (ICSC)

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in malls and on the streets, and they are gearing up for major expansion, accord- ing to Tom Dvoracek, director of retail development at McArthur & Co., a consulting firm based in Dubai, United Arab Emirates. "According to our research, there are approximately 8 to 10 million households today with enough dispos- able income to afford fashion from the likes of Zara and H&M," said Dvora- cek, who was in Iran in July. "The op- portunity is equally great for interna- tionally franchised food-and-beverage concepts. In short, Iran's consumers are starved for international quality prod- ucts and goods." Some have gotten a head start. "Of course, European brands are entering the market," said Ali Amiri, CEO of Maad Retailing Studies Center, a con- sulting firm in the Iranian capital city of Tehran. "But Turkish brands and the Gulf Coast countries' retail group are more active in the country and are going to prosper faster than European brands." Among the brands with the largest presence is Carrefour Hypermar- ket; trading under the name Hyperstar, which is owned by Dubai-based Majid Al Futtaim Capital, the retailer has five stores here, Dvoracek says, while U.K.- based department store chain Deben- hams has three stores. When it comes to malls, the 60-store Eram Hyperstar, in Tehran, is "com- pletely over the top in terms of sales performance," said Phil McArthur, managing director of McArthur & Co. The Hyperstar establishes a beachhead for future mall development in coun- tries where the traditional market has been the street, or, in Iran's case, the bazaar, he says. In a host of emerging countries, including Egypt, India and Malaysia, hypermarkets led the way, he says, and now that same dynamic is playing out in Iran. Roughly 300 shopping centers are under construction in Iran, though this is a weak blessing, observes Dvoracek. "Sadly, the majority of these projects won't meet the standards of interna- tional brands," he said. With few excep- tions, most developers are working un- der what he calls a "build and sell" model — the malls are owned by their retail oc- cupants. Faced with interest rates of 20 percent or higher and the constraints of short-term loans — typically, no longer than five years — developers are under 132 S C T / D e c e m b e r 2 0 1 5 "There's been a strong appetite for shopping center development in Iran for the last five, six years." t i

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