Dozens of malls in Turkey risk bankruptcy as result of pandemic losses

Duvar English

Some 30 malls across Turkey are at risk of bankruptcy as mall managements lost rent revenue during the COVID-19 pandemic, with businesses closing in-person shops more often as it nears one year of lockdowns, the daily Dünya reported on Jan. 14. 

With over 13 million square-meters of rentable space, there are reportedly some 440 shopping malls across Turkey in 2021, a result of extensive construction policies carried out by the ruling Justice and Development Party (AKP).

Malls in the country owe banks around 15 million dollars to be paid back in foreign currency, although 2018 legislation regarding rent collection mandated that all tenants pay in Turkish liras.

Mall managements' debts have essentially skyrocketed in value as a result of the Turkish lira's plunge in 2020, when the currency observed record-breaking devaluation, which led to the resignation of former Finance Minister Berat Albayrak, President Recep Tayyip Erdoğan's son-in-law. 

"Banks are going to become the biggest owners of malls if these managements can't restructure their loans," Turkish Shopping Malls and Managements Association Assistant Director Avi Alkaş said. 

Malls are essentially "factories without chimneys," considering the employment opportunities and revenue they create, Alkaş added, noting the importance of malls for the domestic economy.

Revenue generated by shopping malls decreased to 48 billion liras in 2020, less than third of the 160 billion in revenue in 2019, Alkaş said, and urged banks to push back loan payments without interest for one year.

Shopping malls were among the first businesses Ankara re-opened in June, after the first wave of COVID-19 infections.

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