Apr. 29, 2013
“Everybody is talking about competition because three shopping centers are under construction at the same time," says Salomón Cohen, Director or Venezuela's Sambil Group. Developing its first project in the country, Sambil Group welcomes competition and had already filled 60% of the 365 retail spaces months before it opened. While looking to attract US brands such as Victoria's Secret, Forever 21, Gap, and Old Navy, the development is also set to include facilities for children and a 100-sqm aquarium. Sambil Group has invested $150 million in the project and will likely employ 4,000 direct jobs and 6,000 indirect jobs.
Another mall that recently opened doors is Galería 360. Already at near-full occupancy before the grand opening, the mall was developed using a one-floor racetrack model and focuses on middle-class families. Fernando García, President of Galería 360, offers insight into the changing dynamics of consumer demand; “This country is at the crossroads between North and South America and is one of the main destinations for visitors from Europe… [and] this brings together not only these people's need to consume but also the knowledge of different companies, products, and tastes." García is also bullish about the prospect of oversupply. “It is going to be fierce," he commented, adding, “we have conducted studies on countries similar to ours and the number of malls to be built in Santo Domingo is not excessive over the long term." He also offered an insight into why the sector has suddenly sprung into action, citing recovery from the economic crisis of 2008. “We fell behind in many of these developments in retailing and also in other areas," he said, concluding; “However, we have a very agile economy that is quick to adapt, and it caught up. Suddenly, everyone decided to have the same idea and all these malls went up."
In terms of retailers, big names are attracted to economic growth that has averaged nearly 10% over recent years. “The Spanish company Inditex is present, as well as Adolfo Dominguez. Carrefour is here from France, as well as PriceMart from the US," said Antonio Ramos, President of ONEC, adding that, “Colombian companies are also beginning to show an interest. This is proof of the stability of the market."
Looking ahead, competition in the sector is likely to continue to heat up despite fears of oversupply. “We bought the land and in three months we started working on construction," said Sambil Group's Cohen, highlighting the simplicity of construction regulations available to investors. “Competition is good for us, because many retailers don't want to just open one store but five or six in different locations. If we can find a place for all these stores, then we can expand even further," he concluded.