Sonae Sierra aims to treble business in Turkey by 2018

Sonae Sierra aims to treble the number of shopping centres it manages in Turkey to 30 by 2018, José Falcão Mena, Sonae Sierra’s managing director responsible for EMEA services told PropertyEU.

The Portuguese retail specialist announced on 31 October that it has set up a joint venture in Turkey with a local partner: Sierra Reval. Aside from shopping centre management and leasing, Sierra Reval is also eying development opportunities, Falcão Mena said.

Sierra Reval aims to become the benchmark shopping centre services provider in the areas of development, property management and leasing, Falcão Mena added.

'We have for years been looking for a local partner for the provision of services in the Turkish market which we view as a strategic country for our service provision business. We contacted Reval as both our companies share a common approach: we are both specialists in shopping centres and have the same strategic view of the Turkish market in terms of the need for professional specialised services. Besides that Reval’s experience in the Turkish market and its proven track record make it a preferred partner for a joint venture in the country.'

Reval has been active in Turkey for the past 20 years and provides property management and leasing services throughout the country for shopping centres ranging in size from 12,500 m2 to 66,000 m2. In total it has a GLA of 215,000 m2 under management in Bursa, Ankara, Diyarbakir, Gaziantep, Zonguldak and other cities.

Integrated solutions
Falcão Mena claims Sierra Reval provides integrated service solutions incorporating a comprehensive view on the shopping centre business. ‘It’s a specialised service for shopping centres only; it looks at each centre from a total perspective - from investment and development, to management and leasing. We can also offer an entire set of specialised solutions that are adjusted to the needs of each individual centre in terms of size, typology, age, location, catchment area and tenant mix. We believe that each shopping centre is unique and therefore has specific and very distinct needs. We are bringing over 22 years of development, property management and international leasing experience to Turkey and combining it with the local knowledge of the Reval team. As such, we intend to provide our clients differentiating development and management services with innovative management approaches and efficient operational solutions that we have developed, not only for clients but also in our own shopping centres in order to create value for the owners.’

Sonae Sierra has been on an internationalisation path since 1999, Falcão Mena said. 'We have been very selective with regard to the countries we have decided to enter as we want to have a long-term view on each market and create a sustainable operation. Turkey has always been in our radar, but we also had other opportunities that our peers did not pursue, like the creation of our successful operation in Brazil and the start of operations in North Africa. Nevertheless we believe we are entering in the right moment as 70% of the shopping centres are owned by important Turkish groups. As the market becomes more competitive and mature there is a strong need for specialised know-how in shopping centres. We are joining forces with an experienced and established local company, and we will be focussed on supporting our clients in creating value in their existing shopping centres as well to support new developments with our knowledge and experience.'

String of partnerships
Sonae Sierra has set up a string of partnerships to expand its presence in foreign markets, both in Europe and further afield. Earlier this year, the company announced it had consolidated its presence in Algeria through its local joint venture Sierra Cevital. In July, the company signed a contract with Algerian group Prombati for the management and commercialisation of its new project Park Mall in Sétif. Scheduled to open in June 2014, the centre will have a total GLA of 30,000 m2. Sonae Sierra entered the Algerian market in 2012 where it is active as a provider of retail development, management and commercialisation services.

Commenting on the joint ventures, Falcão Mena said partnerships are part of Sonae Sierra’s strategy to diversify the geography of its business. ‘When we look at markets such as Turkey or Algeria (with Sierra Cevital), we have much to contribute with our expertise, but we must also gather and integrate the local market knowledge. It is essential to have partners in new markets, especially outside Europe. Understanding our customers’ needs is a crucial part of our business to provide the right service and to create the right set of conditions for a successful shopping centre. For such results local and recognised knowledge of each market is essential in order to curb the snags and explore its particularities.’

Sonae Sierra is a champion in the sustainability arena and Falcão Mena also sees a role for the company in this area in Turkey. 'We are deepening our knowledge of the centres under management in order to be able to understand their performance. We will definitely be able to apply our environmental and safety & health solutions in order to increase the efficiency of the shopping centres operation and increase their value over time.'

In order to apply sustainable solutions, it is first necessary to review the building’s performance, implement the correct procedures and embark on continuous monitoring, he added. 'We need to assess the most critical points and start to implement efficiency measures. This could be simply more effective procedures, changes or fine tuning on the one hand, or on the other investments to capitalise on future savings with a short-term return on investment. All these scenarios must be evaluated separately and we must then provide dedicated solutions for each situation according to the shopping centres typologies, sizes and other factors.'

Sonae Reval currently manages 10 shopping centres in Turkey while Sonae Cevital manages three shopping centres in Algeria. The company is also active in Spain, Italy, Greece, Romania, Croatia, Morocco, Colombia and Brazil. Currently, Sonae Sierra has six projects under development and another five projects in the pipeline.

Sonae Sierra was incorporated in 1989 and is 50%-owned by Sonae SGPS and 50%-owned by UK investment manager Grosvenor.