The total supply of space in modern retail facilities in Moscow and satellite cities at the end of 2015 amounted to 6.17 million sq. m. m. In 2015, 14 shopping centers were opened with a total leasable area of 620,000 sq. m. m, which is more than 2 times less than the previously announced plans. The initial volume of declared commissioning for 2015 in the Moscow region was about 1.3 million square meters. m in 26 projects.
Main indicators of the Moscow market in 2015
| Index | Meaning |
| The total supply of modern space shopping facilities(sq. m (GLA))* | 6 167 900 |
| General offer retail space(sq. m (GLA)) | 5 391 700 |
| Total amount of retail space opened in 2015 (sq. m (GLA)) | 620 090 |
| Number of shopping centers opened in 2015 | 14 |
| Vacancy rate (%) | 8 |
| Availability of retail space, (sq. m GLA/thousand people) | 465 |
*Including specialized shopping centers
A significant difference in the volume of planned and actually commissioned retail space is associated with a change in the strategy of retailers and developers in the context of the economic crisis. The devaluation of the ruble forced most chains to revise their development plans and shift their focus towards existing shopping centers with understandable consumer traffic, reducing their interest in new, even high-quality, shopping facilities.
Opening of several large malls at once with a simultaneous reduction of plans for the development of retailers and optimization retail chains have been the reason for the increase in vacancy over the past two years.
Despite postponing the opening of a large number of objects to a later date, 2015 entered the top three in terms of commissioning of retail real estate in Moscow, yielding only to 2014 and 2009.
For a long time, Moscow was inferior to most large Russian cities in terms of the provision of residents with high-quality retail real estate. In 2015, the provision of the city's population with high-quality retail space reached 465 sq. m per 1000 people. Due to the high purchasing power of the population, the capital retains the potential for further development of high-quality retail
The Central Administrative District and the city of Zelenograd, which rose to 2nd place in 2015 after the opening of the super-regional shopping and entertainment center Zelenopark, are in the lead in terms of the availability of high-quality retail space among all administrative districts of Moscow. In 2016, the largest increase in retail space is expected in the Northern (110,000 sq. m) and Southern (100,000 sq. m) administrative districts, while at the end of 2016, the Northern Administrative District of Moscow will become the most endowed with professional retail facilities.
Shopping centers opened in the fourth quarter of 2015
| Name | Address | GLA (sq.m) |
| "Zelenopark" | Leningradskoe highway | 110 000 |
| Avenue Southwest | Vernadsky Ave., ow. 86 | 45 500 |
| "RIO" on Kievskoe highway | Kyiv highway, 1.5 km from MKAD | 45 000 |
| "Day off" | Oktyabrsky Prospekt, 112 | 27 000 |
| "Kalita" | Novoyasenevsky pr-t, vl. 7 | 22 000 |
| "Capital" | 23rd microdistrict, ow. 2309A | 8 000 |
Demand for retail real estate in Moscow
Due to the current economic and geopolitical situation, retailers adjusted their development plans at the end of 2014 - beginning of 2015 and optimized business strategies. Despite this trend, Moscow retained its status as a priority market for the development of retail chains. In Moscow alone, throughout the year, retailers continued to actively consider new sites and open their outlets. Moreover, at the end of the year, Moscow retained its undisputed leadership in the number of openings of new international brands among all Russian cities, being the most stable market with a highly paying population for new players.
In 2015, 36 new international brands, previously not represented in Russia, entered the Moscow market and opened mono-brand stores and catering establishments. At the same time, 11 retailers announced their plans to leave Russia and close existing stores by the end of 2016, which is comparable to the figures for 2014. The main locations for the release of new international brands in Moscow at the end of the year were the Afimall City, Aviapark, and Central shopping centers. Children's Store on Lubyanka", as well as the central shopping streets of the capital.
Given the reduction in development plans of most fashion operators and the steadily growing volume of vacant space, developers were forced to look for alternative tenants. In this regard, over the past year, a large number of tenants atypical for this format of retail real estate have appeared in Moscow shopping centers, such as trampoline parks, petting zoos, media exhibitions, etc.
Commercial terms for renting retail space in the capital
During 2015, landlords mainly made concessions, providing tenants with various discounts, establishing currency corridors, etc. In new shopping centers To attract and retain tenants, developers have developed individual offers, which allowed retailers to remain in the break-even zone. Key benefits include payment of a percentage of turnover, discounts for the first months of work, etc. Unique operators were given the opportunity to partially compensate for finishing work or offset such work against future rent. In general, the percentage of turnover has become the main instrument for regulating rental payments.
Level % of turnover for retailers of various formats, fixed in contracts in 2015
| Tenant profile/type | Area (sq.m) | Percentage of turnover |
| Grocery hypermarket | > 12000 | 1,2-1,8% |
| 4000-12000 | 3-4% | |
| Grocery supermarket | 1500-2000 | 3,5-6% |
| DIY format hypermarket | >10 000 | 4-6% |
| Household appliances and electronics | 2500-3500 | 2,5-3% |
| 1200-2500 | 4-5% | |
| 50-100 | 5-7% | |
| Sporting goods | 1200-2500 | 5-7% |
| Goods for children | 1000-2000 | 8-10% |
| Multiplex cinema | 3000-5000 | 9-12% |
| Tenant of a shopping gallery | 500-1200 | 8-12% |
| 250-500 | 8-15% | |
| 100-250 | 10-15% | |
| 50-100 | ||
| <50 | 12-15% | |
| Restaurant | 250-500 | 10-14% |
| coffee house | 80-160 | 12-15% |
| Food court | 90-110 | 9-10% |
| 50-70 | 12-15% |
The level of rental rates in Moscow shopping centers differed from project to project, with the occupancy level of the facility being a significant factor. For example, in newly opened shopping centers with a vacancy rate of more than 50%, rental rates differed from those in already operating facilities. Almost all new transactions were carried out with a fixed dollar exchange rate for the first year (in the range of 40-60 rubles per dollar) or in “pure” rubles. However, some developers, maintaining dollar rates without fixing the exchange rate, provided temporary discounts from the base rental rate, the value of which brought the dollar rate to an acceptable ruble rate.
Vacancy of retail space in Moscow
The trend at the end of 2014 and throughout 2015 was the opening of new shopping and entertainment centers with an occupancy rate of 40-50% or lower. At the end of 2015, vacancy in Moscow shopping centers reached 8%, which indicates an almost threefold increase in available space compared to the beginning of 2014, when the vacancy rate was 2.8%. The main reason for this was a significant increase in the supply of retail space after the commissioning of several large facilities at once, while the development plans of most retailers were reduced.
According to Colliers International specialists, a decrease in the share of vacant space in existing shopping centers in Moscow and the opening of new shopping centers with higher occupancy rates compared to 2015 should be expected no earlier than the second half of 2016, and the drop in the vacancy rate will be insignificant and, most likely, will not exceed 5 %.
Trends and forecasts in the retail real estate market in the Moscow region
1) Offer
In 2016, the opening of 12 shopping centers with a total rental area of 476,000 sq. m was announced in the Moscow region. m. Most of these projects are at a high stage of readiness, but their commissioning dates have been postponed since 2015 due to the limited availability of financing and the high proportion of free space in new facilities.
The largest shopping centers expected to open in Moscow in 2016
| Name | Address | GLA (sq.m) | Developer |
| "Riviera" | Avtozavodskaya st., 16-18 | 100700 | "Riviera" |
| "Riga Mall" | Novorizhskoe highway, 5 km from MKAD | 80000 | "Riga Mall" |
| "Moremall" (Kutuzovsky Gallery) | Slavyansky blvd., vl. 3 | 60000 | "TPS Real Estate" |
| "Butovo Mall" | Pos. Voskresenskoye, village Yazovo, bldg. 15 | 57000 | MD Group |
| Shopping center on Khoroshevskoe highway | Khoroshevskoe highway, next to the station. m. Polezhaevskaya | 50000 | "TPS Real Estate" |
| "Kosino Park" | Svyatoozerskaya st., ow. 5 | 39000 | GC "TEN" |
| "Metropolis" (2nd stage) | Leningradskoe highway, 16 | 38000 | Capital partners |
| Shopping center on Ryazansky Prospekt | Ryazansky Prospekt, 20 | 19000 | Fortrust Global |
| BABY STORE | Staropetrovsky pr-d, 1, building 2 | 12000 | Glincom |
Colliers International experts predict that large-scale shopping and entertainment center projects, opening in 2016, will be among the last of their kind. Regarding “projects on paper” in 2015, developers most often decided not to go to construction in anticipation of increased availability of bank financing and revival of the retail market. As a result, not a single construction of a large shopping center was launched in Moscow, or the implementation of projects was stopped at the foundation pit stage, and therefore we expect a decrease in the level of commissioning in 2017-2018 compared to 2015. Among the largest construction projects planned to begin for 2016, we include the MEGA Mytishchi shopping center, the Regions group of companies shopping center in Nagatino and the construction of a new building for the Capitol shopping center on Kashirskoye Shosse.
2) Demand
Tenants in crisis conditions give preference to existing shopping centers with existing stable customer traffic. Attracting fashion operators to the shopping gallery of new projects has become an even more difficult task today.
Due to the continuing negative impact of the oil-ruble dynamics, 2016, as well as 2015, will generally be characterized by reduced demand for premises compared to the pre-crisis period. However, not all retail facilities experienced difficulties filling space. In contrast to classic shopping centers, outlets near Moscow that increased or began to increase their space in 2014-2015 are close to 100% occupancy, and the owners of the facilities note an increase in consumer traffic in them.
The state of tension in the segment will remain at least until the end of the first half of 2016, then a gradual recovery of the market is possible. In the longer term, the slowdown in the rate of commissioning will begin to curb the growth in the share of vacant space and will make the projects opening in 2017-2018 in demand.
3) Commercial terms
Colliers International specialists expect that in the next two to three years, ruble rental rates will be able to approach the pre-crisis level, and in the most successful projects, exceed it. As the economy stabilizes, developers will gradually refuse the existing concessions designed to help fill vacant premises.
Review prepared by Colliers International
New Moscow shopping centers stand half empty, while the number of convenience stores is growing
Photo: Andrey Rudakov/Bloomberg via Getty Images
The average rate of empty space in Moscow shopping centers at the end of the first quarter was 11% - that’s 560 thousand square meters. m GLA (leasable area), calculated by specialists of the brokerage and consulting company Magazin Magazin. By the end of the year, they predict an increase in the level of vacancy in the capital's shopping centers to 12-14%.
Dynamics of the rate of filling the areas of the largest shopping centers in Moscow, opened since 2014 (Photo: Shop Store)
At the same time, many of the shopping centers opened over the past year are half empty. “On average, about half of the space in shopping centers that have opened since the beginning of 2014 is not operational at the time of commissioning,” says the analytical review of Magazin Magazin. “An indicator that was difficult to perceive in mid-2014 has now become almost the norm due to turbulence in the retail market.” If earlier, according to developers' forecasts, at the time of the opening of shopping centers, tenants should occupy at least 80-90%, now the bar has been lowered to 60-70%.
The level of empty premises at the time of commissioning in some complexes reaches 94%, as in the Columbus shopping center. Although there are centers where not much space was left unfilled when they opened. In particular, the Vesna shopping center, where only 8% of the stores were empty.
However, in a crisis, according to consultants, a more relevant indicator of the relative success of a shopping center is the dynamics of its occupancy. “Almost all centers open with a large share of non-operating stores,” explains Andrey Vasyutkin, head of the research and consulting department at Magazin Magazin. — In our opinion, it is important to evaluate how quickly points open in these objects after opening. In some shopping centers, for example Columbus, tenants quickly begin to open their outlets, while in others, like Mozaika, they are not particularly active.”
The Columbus shopping center has become the absolute leader in the rate of space absorption - within a month and a half after its opening, new tenants occupied 38.6 thousand square meters. m. In March, the share of empty space in shopping centers was already 67%. According to the Store Store, good dynamics were demonstrated by the Aviapark shopping center and Vegas Crocus City.
Shopping centers opened in Moscow since 2014
|
name of the property |
Developer |
Date entered |
||
|---|---|---|---|---|
|
Airpark |
AMMA Development |
|||
|
Vegas Crocus City |
Crocus International |
|||
|
"OST-group" |
||||
|
Kuntsevo Plaza |
||||
|
Central Properties |
||||
|
IMMOFINANZ Group |
||||
|
Central Children's Store on Lubyanka |
"Gals Development" |
|||
|
"Daria-ST" |
||||
|
Moskvorechye |
"Garant-Invest" |
|||
|
Outlet Village Belaya Dacha, 2nd stage |
||||
|
Otrada, 3rd stage |
"Elt" |
|||
|
Christina NVN |
||||
|
OrangePark |
City & Malls PFM |
|||
|
"Union" |
Convenience stores
The popularity of shopping centers is indirectly influenced by the growing popularity of convenience stores, which are being actively opened in Moscow by chain retailers. This leads to a partial outflow of customers from large hypermarkets, which are anchor tenants in shopping centers.
According to the international consulting company Knight Frank, over the past ten years the number of grocery chains in the Moscow market has grown from 21 to 48. The total number of chain grocery stores during the period under review increased 3.2 times and as of April 1, 2015 amounted to more than 2.1 thousand The total retail area exceeds 2.3 million square meters. m. On average in Moscow per 1 sq. m of retail space there are about 5 residents, for comparison: in 2005, per 1 sq. there were 9 people.
The largest growth in the number of stores was shown by the Pyaterochka, Dixie and Magnit chains. In addition, new grocery store formats have emerged over the past decade. In particular, retail operators began to pay more attention to the development of small format stores, as well as “discounters”.
Thus, X5 Retail Group is actively developing Perekrestok Express convenience stores and Pyaterochka discount stores, and the French retailer Auchan is developing the Atak discount chain. The market has been replenished with new networks, among them there are both international and regional Russian operators. Regional networks are represented by such supermarkets as “Bakhetle” (Tatarstan), “Magnit” (Krasnodar Territory), “O’KEY” (St. Petersburg), “Lenta” (St. Petersburg), etc. International operators include Globus and Selgros Cash&Carry.
According to Olga Yasko, director of the analytics department at Knight Frank Russia & CIS, different formats of food retail still have great potential for development. “Many areas of the capital, especially peripheral areas where massive residential development is taking place, are still poorly supplied with grocery stores,” she said.
Vladimir Mironov
In 2010, BOMA published a new standard for retail buildings. Although the 1996 Office Building Standard already addressed Store Areas, ANSI/BOMA Z65.5-2010 is the first standard specifically designed for today's retail properties.
The standard is perfectly adapted for street retail, modern shopping malls and shopping complexes. This standard is recommended for use if retail space in a building occupies more than 50% of the total area of the facility. If the building is dominated by office space, then the standard for office buildings - ANSI/BOMA Z65.1-2010 - should be used to measure the area.
The standard for retail real estate does not calculate the load factor, which plays an important role in measuring the area of office and warehouse premises. Instead, the calculation determines the Gross Leasable Area of the building. The standard includes definitions and formulas for all the main elements of modern shopping centers: stores, mezzanines, kiosks, food courts and parking lots.
Gross Leasable Area
Measuring retail space is significantly different from measuring office space or store space. Consequently, there are big differences in terminology. Instead of the term "Rentable Area" used for leasing office premises, in retail real estate the term "Gross Leasable Area" (abbreviated GLA) is used. In addition, the standard also measures the Common Area: public bathrooms, machine rooms, electrical rooms, cleaning rooms, security rooms and the office of the management company. These areas are critical in determining the Common Area Maintenance load, but this standard does not add the common area maintenance to the tenant's premises through a load factor, as is the case when measuring the area of an office building.
Rentals in shopping centers often include ancillary areas such as outdoor patios, warehouses and other spaces that are outside the perimeter of the building boundary walls. The standard also regulates the use of the elements most commonly found in shopping centers: kiosks, islands, food courts, etc. In office buildings, the term Dominant Portion is used to determine the perimeter of premises. In retail real estate, this definition is not used - instead, a new concept is used - Lease Line.
ANSI/BOMA Z65.5-2010 is not a revised version of the standard for office buildings - it is an entirely new standard that focuses exclusively on retail properties. The standard has a common basis and is consistent with other standards, especially Gross Areas of a Building: Methods of Measurement (ANSI/BOMA Z65.3-2009). This creates a toolkit for measuring buildings at all stages from design, construction and financing to purchase, sale, management and leasing.
27.11.2013 25486When renting space in another shopping center, the tenant wants to be sure that his hopes for profit will not be in vain. Of course, traffic and the selection of tenants play an important role, but the main condition for a successful shopping center is a high-quality concept. Andrey Shuvalov, senior director for retail real estate at Cushman&Wakefield, spoke about what it is and what it consists of during an open lecture “Concepts of shopping centers.”
Recipe for success
The concept of a shopping center is not just a planning solution, it is a clear commercial idea for the future shopping complex. The concept allows you to determine what kind of complex can be built in a given location in order to bring maximum income to the owner in the long term, taking into account the changing competitive environment. It includes both technical indicators, such as the optimal area for a particular retail area, the width of storefronts and the ratio between anchor tenants and small stores, and qualitative indicators - recommendations on the composition of tenants, assortment matrix, architectural appearance and style of the property. But this is not the only thing that matters: the shopping center must create a carefully thought-out environment with its own character. This is expressed in the details, so the name, interior lighting, design, and organization of space are important.
The profitability of a shopping center strongly depends on whether its managers have specific knowledge in the field of retail real estate and on how effective the current marketing of the facility is. We must not forget that tenants of a shopping center have the right to unilaterally terminate the lease agreement if they consider that the facility is poorly visited or poorly managed. Therefore, no sane entrepreneur will rely only on personal experience and build a shopping center according to his own understanding. In addition, cooperation with consultants allows you to keep abreast of the latest trends and moods of tenants, because their immediate task is to keep their finger on the pulse of the market. For example, consultants know that if previously Mediamarkt rented space of at least 5 thousand square meters. m, then today he lowered the lower limit to 3,800 sq. m. m, Auchan reduced requirements from 19 to 10-12 thousand, clothing segment operators - from 1,800 to 1,200 sq. m.
Components of a quality shopping center
A significant part of the space around the shopping center should be occupied by parking, the effectiveness of which is assessed by a special coefficient taking into account the location of the shopping center. A good coefficient for providing a shopping center with parking spaces is considered to be 2 if the retail facility is located in the city center, and 4 if the shopping center is built outside the city and has an anchor grocery hypermarket. This difference is explained by the fact that the bulk of the flow of visitors to the city shopping center can use public transport. For example, the Galereya shopping center in St. Petersburg has a coefficient of 1.35, but this does not mean that the facility is poorly equipped with parking spaces, because the main flow of customers comes from the metro.
Another important parameter in the quality concept of a shopping center is area efficiency. It is defined as the ratio of gross leasable area (GLA) to gross leasable area (GBA). There cannot be one hundred percent efficiency: for a large shopping center, which is considered an object with a GLA of 50 thousand sq. m. m, the coefficient of useful use of the area can be up to 80%, for a medium one - 70%, for a small one - 67%. Such a strange decrease is explained by the effect of scale: in small shopping centers, a lot of space is occupied by public and technical areas, which greatly affects the total volume of usable area. Owners of small shopping centers can increase the efficiency ratio by placing shopping kiosks in the corridors and changing the format of shopping galleries. Thus, they increase the rental area and, accordingly, the income from its rental. However, it is infinitely impossible to increase the efficiency factor with benefit for oneself: the premises vacated in the main shopping galleries will be occupied by anchor tenants, whose rental rates are five times lower, and the shopping center will begin to lose money.
The ratio of anchor tenants, which include operators with an area of more than 1,000 sq.m., and other stores is another secret to the success of a quality concept. The rule here is simple: the larger the shopping center, the more “anchors” it should have. In addition, if the shopping center is located in an area of large pedestrian flow, the “anchors” should account for 30-40% of the leasable area. If the object is built outside of large pedestrian flows, then in order to create a center of attraction for buyers, at least 60% must be given to anchors. A good example: the Auchan hypermarket is capable of creating a flow of 35 thousand people per day. The rental rate for it will not be high, but smaller tenants will be able to get more visitors, and the overall synergy will lead to increased rental income. If the shopping center is located in the central part of the city or near the metro, then the presence of a tenant such as Auchan is no longer fundamentally important: there is a natural flow of visitors there. All that remains for the shopping center owner to do is to place a certain number of high-quality “anchors” from the fashion segment.
In order for a shopping center to meet the requirements of tenants, a certain height of the complex is necessary. It is believed that multi-storey shopping centers are not very effective, because the attendance of the upper floors is much less than the first: if we take the first floor as 100%, then the attendance of the second will be 90%, and the third - already 70%. As for the height of each floor, for operators working in the mass market and middle price segment, the minimum height of the room from ceiling to floor should be 3.5 meters, in the medium-high price segment - 4 meters “clean”. With hypermarkets and cinemas the situation, of course, is slightly different: in the first case, due to the rack storage system, the height of the room should be from 6 to 7.5 meters, and in the second - from 8 to 11 meters for halls with 100 and 300 seats, respectively.
A specific area that requires attention is the food court of the shopping center. Nowadays there is a current trend towards an increase in the share of catering in shopping center projects, and this is typical for all of Russia. In high-quality shopping centers, popular food establishments that are well known at the federal level have been selected, and there is enough seating area for the clients of each of them. Experts recommend that regional shopping centers not neglect federal brands, since any new shopping center with at least one of them will provide significant competition to local brands.
Finally, one of the most important elements in the shopping center is the central atrium. While in it, visitors should have a good overview and see shops on other floors, because this is the key to traffic on the upper floors. The minimum width of the atrium should be 5-6 meters, the width of the balcony should be 3-4 meters. In addition, there should be space above the heads of visitors on the first floor: a high dome creates a feeling of miracle, something beyond the everyday, and this affects the mood of visitors.
Concept highlights
The task of the developers of the shopping center concept is not only to take into account all the technical features, the configuration of the site, make zoning and calculate customer flows. You need to have a broad vision, including in terms of architecture. For example, it is not necessary to follow the classic path of new construction - sometimes you can use what you already have. Let’s say you can “fit” a new building into an existing one: cover the space between the buildings with a glass cap to create an internal volume with a separate entrance. Also, in conditions of increasing competition, it is very important to come up with an idea, a feature, something that would distinguish the project from many available on the market. Sometimes the highlight can be the design of the shopping center. An example is a unique shopping center near Krasnodar OZ mall, which is one of the largest in Europe (GLA 164 thousand sq. m). It has a unique futuristic design: the building with smooth, streamlined shapes resembles a giant spaceship. However, a spectacular appearance does not mean that the object will not have bottlenecks. Some experts note that the disadvantage of OZ mall is the lack of a ring pattern, which is why the flow of visitors is divided into parts, and each wing works “for itself.” The situation is also aggravated by the fact that the anchor hypermarket of this shopping center - “O’Key” - is located in a separate wing, and its customer flows do not mix with the general traffic of the shopping center.
In addition to outstanding design, there are other ways to compete in the retail real estate market, such as offering a distinct tenant pool. You don’t have to look far for an example: a new shopping center is being built in Moscow next to the Evropeisky shopping center. It would seem that head-to-head competition does not mean anything good, but the rentable area of Evropeisky is only 6 thousand square meters. m., so if you wish, you can fill the new facility with tenants who are not there. The result is an interesting synergistic effect.
Recently, among the new generation of shopping centers, there have been many non-standard projects. These include the Mitino-Park project, where a large bias is made towards creating conditions for quality recreation and pastime. At first, they wanted to invite the Spar hypermarket to the project as an anchor tenant, but then it was decided that the facility needed a more original food concept. As a result, Mitino Park created a so-called “fresh market” with an unusual layout, where there are shops with farm products, fresh food and other joys of home cooking. It is curious that thanks to this decision, international brands began to consider the project, which is quite unexpected for a shopping center on the outskirts of Moscow.
One of the latest trends in the search for diversity in shopping centers is the interest in children's and cultural entertainment. The planned objects are actively designing fear rooms, huge aquariums, theaters, museums and even libraries. However, experts recommend not exaggerating the importance of these components: the problem is that consumers mainly visit such entertainment only once, while people return to a traditional cinema again and again. So we can say that the recipe for an ideal shopping center has long been found: a good location, pedestrian and transport accessibility, the absence of competitors with a similar concept in the immediate vicinity, a high-quality “selection” of retail operators, restaurants and comfortable cinema halls. All this already ensures high interest of visitors and optimal profitability of the property.
When renting space in another shopping center, the tenant wants to be sure that his hopes for profit will not be in vain. Of course, traffic and a set of tenants play an important role, but the main...
In 2009, the total commissioning of retail space exceeded 1 million sq.m. (GLA - 594.2 thousand sq.m.), which is a record figure for the Moscow market (1.5 times more than the same figure in 2008). Thus, the increase in the total volume of high-quality retail space in 2009 was 19.8%, the increase in GLA was 21.6%. It is worth noting that the number of commissioned facilities remained the same compared to 2008. The increase in commissioned space was due to the consolidation of retail facilities - most of them belong to super-regional format malls.
The huge volume of retail space commissioned in 2009 was provided mainly by large shopping, entertainment and multifunctional centers that were at the final stage of construction back in 2008: the Golden Babylon shopping center, the Gorod shopping center, the Filion shopping center, the Metropolis shopping center ". Their opening was postponed to 2009 due to the economic downturn and weak demand from retailers. Due to problems with the delivery of retail space, as well as insufficient funding and late completion of tenants, the general trend in the market has become the commissioning of facilities with a shopping gallery operating at 40-60%, followed by the opening of stores during the operation of the facility.
At the beginning of 2010, the supply of space in quality shopping centers in Moscow did not expand as dynamically as during the corresponding period in 2009. The trend of postponing the opening dates of objects continued in the first quarter. 2010: at the beginning of the year, the opening of 3 shopping and entertainment centers was announced: the Viva shopping center in Northern Butovo, the Klyuchevoy shopping center in Brateevo at the intersection of the street. Borisovskie ponds, st. Klyuchevaya and st. Paromnaya, stage 1 of the Rechnoy shopping center on the street. Festivalnaya near the Rechnoy Vokzal metro station. The total area of the planned commissioning is 84.6 thousand sq.m. (GLA - 55.8 thousand sq.m.). However, before the end of March, only the first stage of the Rechnoy shopping center with a total area of 26 thousand sq.m. was opened. (GLA - 18.1 thousand sq.m.). The commissioning of 2 other centers has been postponed to the end of April.
Total supply in Moscow shopping centers (GBA) at the end of Q1. 2010 reached 6,476.9 thousand sq.m. (GLA - 3,360.5 thousand sq.m.). Thus, today the provision of quality shopping center space for Moscow residents is 311.2 sq.m. (GLA) per 1000 people, which is still less than the average value of this indicator in Eastern European countries - 470 sq.m. per 1000 people.
In continuation of the existing trend, the opening of such significant retail projects as Vegas, Mall of Russia, Gagarinsky, and Hudson has been postponed to 2010. Their total area is about 60% of all facilities planned for commissioning. In total, about 25 objects have been announced for 2010, their total area is about 1.5 million sq.m. (GLA - just under 700 thousand sq.m.). Today it is quite difficult to reliably predict which properties will enter the Moscow market in 2010. We can with a high degree of confidence expect a volume of commissioning greater than in the previous year - about 600 thousand sq.m. GLA. Inertial growth can be predicted in the 2nd half of 2010, since over the past few years there has been a tendency for uneven commissioning of space throughout the year and its intensification by the end of the year.
Table 2. Facilities scheduled to open in 2010
|
name of the property |
District |
Address |
Announced opening date |
Total area of GBA (sq.m.) |
GLA retail area (sq.m.) |
|
|
River (Iqueue) |
st. Festivalnaya, 2 |
|||||
|
Viva |
Designed pr-d 680 |
|||||
|
Key |
st. Borisovskie ponds / st. Key |
|||||
|
Caspian |
Kronstadsky Blvd., 3 |
|||||
|
Marcos Mall |
Altufevskoe highway, 70 |
|||||
|
Monarch Center |
Leningradsky Prospekt, ow. 31 pages 2,3 |
|||||
|
Rio (Chocolate) |
2nd km of MKAD |
|||||
|
Mall of Russia |
Krasnopresnenskaya embankment, sections 6, 7, 8B |
|||||
|
Gagarinsky |
st. Vavilova, 3 |
|||||
|
Izmailovsky |
st. 4th Parkaya, ow. 16 |
|||||
|
Kaleidoscope |
Khimki Boulevard / st. Skhodnenskaya |
|||||
|
Sail |
Novokurkinskoe sh., 1, microdistrict. 17 |
|||||
|
Azov |
st. Azovskaya, vl. 28 V |
|||||
|
Vegas |
Kashirskoe sh. 24 km MKAD |
|||||
|
Voentorg |
st. Vozdvizhenka, 10/2 |
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Sparrow Hills |
st. Mosfilmovskaya, 70 |
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Shopping gallery of the Moscow Hotel |
st. Okhotny Ryad, 2 |
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GoodZone |
Kashirskoe highway, 12 |
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Mosfilmovsky |
st. Pyryeva, ow. 2 |
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|
Strogino |
Stroginsky Boulevard, 22A |
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Rainbow |
st. Yeniseiskaya, 23 |
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Favorite |
st. Venevskaya, vl. 7 |
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|
TOTAL: |
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Source: NDV Real Estate company data
* the total area of the retail component of the multifunctional complex is indicated
Demand
Starting from the end of 2008 and during the first half of 2009, due to the economic recession, low activity of retailers was observed and, as a result, a decrease in demand both for premises in shopping centers and in the street retail segment. The impact of the crisis situation on the development of the retail sector was confirmed not only by the freezing of projects and defaults of retail operators, but also by the increase in the share of vacant space. During 2009, the vacancy rate in Moscow remained unstable, and in the third quarter of the year it was recorded at an all-time high of 16%. This figure was due in part to the low occupancy levels of new shopping centers. Due to insufficient funding and late completion of tenants, the general trend in the market has become the commissioning of objects with a shopping gallery operating at 40-60%, followed by filling in during the operation of the object.
Source: NDV Real Estate company data
A high proportion of vacant space is also typical for shopping centers aimed at the high price segment (up to 35%). The outflow of tenants is mainly observed in multifunctional complexes and poorly located facilities, centers with a weak concept (15-25%). At the same time, high-quality shopping centers with a well-thought-out concept have avoided a significant increase in the level of vacancy, and the most successful facilities (European shopping center, MEGA Teply Stan, MEGA Khimki) are still 100% occupied.
Starting from the third quarter of 2009, the situation on the market began to change, and some recovery was felt. Tenants have become more active: the number of rental transactions has increased, which has led to an end to the decline in rental rates (and growth was noted for a number of the most successful properties, as well as for some retail corridors) and a decrease in the vacancy rate (7% at the end of the year).
As of the first quarter of 2010, Moscow continues to be a priority direction for the development of major retailers. One can observe the active expansion of regional chains into vacant space in metropolitan shopping centers. The share of vacant space decreased according to the results of January - March 2010 to 5 - 7%. However, due to the large volume of retail space planned for commissioning in 2010, we can predict an increase in available space by the end of the year to 10 - 12%.
In general, retail operators give preference to successfully operating shopping centers with excellent locations, effective concepts and adequate rental policies. Also, retailer demand is largely focused on large-scale projects that are in the final stages of construction.
Source: NDV Real Estate company data
The fact that many retailers have reduced the size of their stores while maintaining the same level of profitability has had a significant impact on the structure of demand. So the share of premises of interest to the tenant is 100 - 200 sq.m. increased to 58%, they still remain the most popular. While premises of 200 - 400 sq.m. are of interest to tenants only in 11% of cases. The share of demand for large premises has decreased significantly. The least in demand in this market situation are premises larger than 1000 sq.m.
Commercial terms
The retail real estate rental market in 2009 could be characterized by a trend of transition from a “seller’s market” to a “buyer’s market.” The decline in the overall level of rental rates continued from the end of 2008 and reached its maximum by mid-2009, amounting to from 25% to 50% of the level of mid-2008. There was a differentiation of properties into successful ones, in demand among tenants, in which rental rates remained at level of the pre-crisis period, and less successful ones, having conceptual shortcomings or an unsuccessful location, in which the scale of the reduction in rates for renting out empty premises was maximum.
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