ΓΔ: 896.04 -1.11% Τζίρος: 83.50 εκ. € Τελ. ενημέρωση: 17:20:02 ΣΤΟΙΧΕΙΑ ΑΓΟΡΑΣ
Lamda Development

Mall shutdown to take heavy toll on Lamda revenues

According to analysts and market officials, 2021 will be a better year for the company, but this will depend on the course of the pandemic and the extent to which Greek consumers switch to online shopping during - and after - the pandemic.

Lamda Development’s revenues are expected to take a big hit in the fourth quarter of the year after the government's decision to put the country back into lockdown mode, forcing shopping malls to close just weeks ahead of Christmas.

According to analysts and market officials, 2021 will be a better year for the company, but this will depend on the course of the pandemic and the extent to which Greek consumers switch to online shopping during - and after - the pandemic.

With the new lockdown applying until (at least) the end of the month, the three shopping centers owned by Lamda Development, in Athens (The Mall and Golden Hall) and Thessaloniki (Mediterranean Cosmos), will shut their doors, taking a massive bite out of group revenues.

For November, Lamda’s rental income will be reduced by 40%, in line with government support measures aimed at the retail sector. There will also be a further cost from the extra support Lamda provides its tenants, as was the case in the first lockdown earlier this year.

As a result, the company's retail EBITDA, ie earnings before taxes, interest, depreciation and amortization for the three malls, is expected to decrease in the fourth quarter by 70% to about 5 million euros, compared to 16.5 million euros for the same period last year, according to analyst estimates.

While many retailers are bracing for a tough Christmas period, Lamda is taking the opportunity to strengthen its relationship with shopkeepers by offering an extra discount on rental payments amounting to 30 percent.

This means that the total discount offered by Lamda may reach 70 percent in a bid to strengthen its long term ties with the store owners, many of which rank among the country's largest and strongest retailers.

Meanwhile, many of these stores are strengthening their online presence, preparing for a digital future that relies considerably less on physical stores.

This is perhaps the most worrying trend for officials at Lamda as Greeks increasingly shift to online shopping as witnessed in the first lockdown period.

Surveys show that 50% of new users who turned to the internet for their purchases in Greece are believed to remain digital shoppers after the pandemic, while 57% of stores are positive about the future of online shopping.

It is worth pointing out, however, that when stores opened to the public again in May, there was a satisfactory return of shoppers to the malls. However, it remains to be seen whether this will be repeated when the latest batch of restrictive measures targetting the pandemic are lifted,  whenever this happens.

Stelios Bouras

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