According to Jones Lang LaSalle research, no new high quality shopping centers were opened in Moscow in the third quarter of 2012 for the second consecutive quarter. However, Moscow Region has seen the opening of several schemes, including an absolutely new format for the Russian market - outlet shopping center.
No new schemes were opened in July to October 2011 either. As a result, completions volume reached the lowest historical level of 126,250 m² in 2011.
Andrey Privezentsev, Head of Retail Research, commented: "Zero volume of new completions forces us to review our forecast for 2012. According to our estimations four shopping centers with a combined GLA of 140,000 m² are planned to be opened in Q4 2012. Consequently, total completions will likely reach 185,000 m² (against our previous forecast of 255,000 m²) as the GoodZone SC opening is now planned for 2013."
Several schemes are planned to be opened in 2014, with a considerable increase in supply not expected until that time.
Existing supply gravitates to the south, 43% of high-quality premises (or 1.4 million m²) are located in southern, southeastern and southwestern districts. The share of North-Western district is expected to increase and the share of Central district is expected to decrease in 2014.
Andrey Privezentsev noted: "Active market development in Moscow has encouraged market evolution in Moscow Region in the recent years as well as fostering new formats including outlets. The first shopping center that complies with all the standards of the outlet format, Outlet Village Belaya Dacha was opened in Q3 in Moscow Region.
The outlets have been developing in Europe and USA for more than 40 years and in Russia this format is considered to have considerable growth potential. Outlets are beneficial for all market players. Consumers will have the possibility to buy quality merchandise with a significant discount, retailers can sell off the stock and increase revenue, developers are motivated by lower land prices and shorter payback period.
"Already well established in western markets, outlets have great potential and a chance to succeed in Russia, taking into account current economic situation when cutting on costs becomes a key factor in making the purchase decision."
Source: Jones Lang LaSalle