Marina Nesterenko, Forum Lviv: We do not observe a decrease in demand for space or a decrease in rental rates

Director of the SEC Forum Lviv located in the centre of Lviv – on 2021 results, the retail development in the western region of Ukraine, the emergence of new brands, work during a pandemic, changes in consumer preferences and much more.

Despite challenges caused by the COVID-19 pandemic and quarantine restrictions at the SEC Forum Lviv, there is a positive trend in key indicators and satisfactory performance. Marina Nesterenko, director of the SEC Forum Lviv, told RAU: thanks to what it is possible to achieve such results, how the pandemic has affected retailers and consumers, what has changed and how to work under the threat of constant quarantine restrictions.

– What were the results for Forum Lviv shopping centre in 2021?  Higher or lower than expected? Can you quantify?

– During the months when there were no lockdowns or restrictions, shopping centre footfall and sales figures in 2021 showed steady growth, even compared to 2019 (before the pandemic).

In periods of stricter quarantine restrictions, in line with the market as a whole, we experienced a negative impact on footfall.

However, during those periods we also observed significantly higher conversion levels, which indicates more targeted and high-quality footfall. Of course, there are categories of tenants who felt the impact of restrictions more than others (cinemas and restaurants mainly), but sales of most retailers have not been significantly affected by recent quarantine restrictions that were in place in the fall of 2021.

In this period, we also continued to work on improving the shopping centre tenant mix, bringing interesting new brands to the city, such as: The Body Shop, Kiko Milano, Calvin Klein Jeans, Solmar, GLO, Tomatina, iSEI.

Throughout 2021, the occupancy rate of the shopping centre was more than 99%. Overall, the recovery of key indicators demonstrates how much people enjoyed visiting shopping and leisure destinations again.

– How did the tenants in your mall react to the introduction of the new quarantine?

– We also did a lot to support tenants and help them generate sales. This included launching intensified advertising and marketing campaigns. Forum Lviv also focused on creating a positive and dynamic holiday atmosphere to increase the loyalty of our customers, encouraging them to return more during holiday shopping- one of the key retail periods of the year.

– What trends in the commercial real estate market have you seen during the coronavirus pandemic: are rental rates declining or rising or is the demand for rental space declining?

– Lviv is, and remains, the most attractive city for retailers wanting to develop a presence in the West of the country, and the city’s investment attractiveness is growing every year. This is evidenced by the significant increase in recent years in the number of commercial facilities in the city including business centres, logistics centres, and residential real estate.

Quality shopping centres with a convenient location, the right concept, a strong tenant mix and professional management will always appeal and consequently, tenants at Forum Lviv were not significantly affected by the pandemic.

Forum Lviv has always been and remains highly attractive to international and national retailers. This means we have not seen a decrease in demand for space or in rental rates. The vacancy rate in Forum Lviv shopping centre is close to 0%, and we have a long waiting list of potential tenants.

– Have new stores, entertainment or catering establishments opened in your shopping centre during the coronavirus pandemic, and which ones?

– In the last year, FORUM LVIV welcomed a range of new high-profile retailers, with The Body Shop, Under Armor, Intimissimi Uomo, Flo and Ochnik all signing leases there. In addition, a number of existing outlets have renovated and improved their shops, while the shopping centre itself has improved the visitor experience.

– During the coronavirus pandemic, did your shopping centre pay special attention to the development of e-commerce and social media promotion?

– Special emphasis has always been placed on the development of Forum Lviv shopping centre’s social media. For us it is an important tool for communication with our clients, visitors and the local community. That is why our pages on social networks not only have a high number of followers, but they also benefit from high audience interaction and exposure/coverage indicators (on Facebook, the Forum Lviv page has the largest number of subscribers among all shopping centres in Ukraine – 232K followers; our Instagram page has more than 101K followers).

During the pandemic, social networks were one of the key tools to further strengthen the positioning of the mall as a safe shopping location, as well as allowing us to be an active integrated member of the local community (communication about the implemented social initiatives – supporting doctors, tenants, etc.)

– In which establishments in your mall do you see the highest footfall: grocery supermarkets, catering establishments, electronics supermarkets, drugstore-discount stores or entertainment establishments?

– When analysing the results of tenants’ performance by sectors / industries over the last 12 months, we saw sectors such as electronics, grocery, household goods and drug stores were the strongest performers.

According to our latest market research, the ranking of the most visited establishments in our shopping centre is topped by the supermarket, fashion anchors and food operators.

– What are the special conditions with which your shopping centre attracts new tenants and how do you collect rent: is it a fixed rate or interest, in national or foreign currency?

– Forum Lviv shopping centre has an excellent location, clear concept, strong tenant mix and professional management. All this together is reflected in the good performance of the shopping centre, its footfall and sales results.

We, like all professional market operators, work with tenants on a fixed rate tied to foreign currency and their percentage of sales.

– How does your shopping centre build relationships with tenants: do you run joint marketing campaigns or organize joint training programs?

– During the pandemic, within the framework of Forum Lviv marketing activities, even greater emphasis has been placed on stimulating sales of tenants. We are grateful to our tenants for supporting all of our initiatives – whether individually (whereby tenants become the main partners of the activity) or those that involve all Forum Lviv tenants working together.

One such project is Forum Lviv shopping voucher, where customers making purchases at Forum Lviv get a gift voucher to use during their next purchase at any of the participating stores. Such a tool undoubtedly has a complex organisational element, but the action is new and attractive to customers and allows us to further diversify their shopping experiences.

– What are the key characteristics of your shopping centre, that make you different from your competitors in Lviv?

– Forum Lviv shopping centre is the fashion destination and the meeting point in Lviv, offering a wide variety of national and international brands and a positive and dynamic shopping atmosphere. It offers a European cultural shopping experience in a distinct and unique architectural setting and a convenient city centre location.

Forum Lviv is also a safe shopping location, which is confirmed by the international certificate; SAFE GUARD for safety and hygiene from Bureau Veritas.

To provide a unique shopping experience in Forum Lviv, a number of free additional services are provided for the maximum comfort of customers. Among them; the possibility to use free services such as a kids stroller, a portable phone charger, umbrellas, gift wrapping services and more.

Since Forum Lviv opened in 2015, it has been recognized with 18 national and international awards.

According to our latest market research, customers choose Forum Lviv over competitors due to the cumulation of factors, the key ones being convenient location, wide range of shops and services, supermarket, pleasant atmosphere and tenant mix.

– Please tell in more detail about obtaining an international certificate from Bureau Veritas Group? Did you become the first shopping mall in Ukraine with such a certificate? What does this certificate mean?

– To ensure the health and safety of customers as far as possible, additional security measures were implemented in Forum Lviv.

In particular, convenient safe navigation was developed by leading specialists at Multi Corporation, one of the largest commercial asset management companies in Europe, based on their extensive European experience. Safe Space spots, Safe Distance and Safe Waiting Area zones are clearly marked and disinfection stations are installed throughout the shopping centre. All measures take into account the maximum convenience and comfort for visitors.

Forum Lviv shopping centre was the first shopping centre in Ukraine to receive an international certificate from Bureau Veritas Group, an industry leading hygiene and safety excellence label, SAFE GUARD. This certification recognizes a property that has met stringent requirements to minimize the onsite risk of virus spread and is adhering to best-in-class hygiene and safety protocols.

All of the security measures that we implemented have contributed to the encouraging results. According to the latest survey conducted in October 2021, 89% of customers feel safe when staying and shopping at Forum Lviv. Customers are also positive about the measures taken to ensure a safe shopping experience which is further supported by the results of the study.

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