Galeria Sandecja, Nowy Sącz

Nowy Sącz, Poland

Planned operational improvements:

  • To retain a high occupancy rate in the centre.
  • To change temporary leases to ordinary leases on conditions that are satisfactory to the Group.
  • To ensure a good tenant mix, with traditional tenants on the ground floor.
  • To upgrade the food court.
  • To upgrade the first floor with discount stores offering a wide range of low-price products.

The opening of a competing centre in Nowy Sącz in autumn 2013 has strongly impacted Galeria Sandecja’s performance for some time. In 2015 the revenue index was 93 and the footfall index 95 compared to 2014.

The change in the competitive situation put the rental level under pressure for a period of time. Management prioritized retaining the centre’s high occupancy rate, and several temporary, short-term lease agreements were concluded at a relatively low rent.

The effects of various initiatives taken in 2015, including creating a strong mix of tenants on the ground floor and relaunching the first floor, are starting to emerge, and the negative trend in revenue and footfall was reversed in early 2016. In 2016 the centre recorded revenue at index 114 and footfall at index 101 compared to 2015.

In light of this improved situation, new tenants are showing signs of interest, and tenants with short periods of non-terminability/temporary leases are also becoming interested in entering into more permanent leases with long periods of non-terminability.

Several temporary leases have now been changed to ordinary leases, and a clear letting strategy has been developed for the next year. The initial focus is on converting the remaining short-term leases to ordinary leases with long periods of non-terminability. In this connection, the plan is to move a few tenants around, expand some units and upgrade the food court.

The above initiatives are essential elements of the long-term plan for the centre, the aim being for the centre to return to generating satisfactory operational results within the next few years, thus enabling the centre to be sold at a satisfactory price for the Group.