Twenty tenants of Pfohe Mall in the Black Sea city of Varna have stopped paying rent to the Bulgarian mall owner, Luke REIT, over the poor management of the shopping centre, Dnevnik daily reported on September 3 2008.
The information was confirmed by the local law firm Murgova, Kovacheva & Co, which represents the tenants.
Inefficient management has triggered an outflow of clients, a drastic slump in sales, poor advertising and a low occupancy rate, the companies said.
The discontented tenants have also requested re-negotiation of the contract terms, but have not received a reply yet. Two companies have already terminated their rental contracts.
The problem is one seemingly confined to the small companies that run locations in the Pfohe Mall and in the Varna Mall, both of which opened in early summer 2008. The stores had double expenses, but did not fetch double revenue, as Varna shoppers buy in either of the outlets, said Atanas Furnadjiev, Luke board chairman. He also said that big international players had no problems.
Luke has already replaced the Pfohe Mall manager. Investa Property Solutions will target fruitful co-operation with tenants and will focus efforts on luring new clients and brands.
