According to JLL, vacancy rates on the Moscow retail market has reached 8.3%, increasing by .8 pp. in Q4 2015 and by 2.3 pp. year-on-year respectively. The availability has increased due to high volume of new Moscow retail supply (560,000m² in 2015) and active rotation of tenants who are under pressure due to a decline in retail sales.
According to Rosstat, between January and November 2015, accumulated retail turnover growth in Russia reached -9.3% compared to the previous year. Moscow retail sales were down 13% year-on-year the same year.
JLL estimates that the vacancy rate on Moscow shopping centre market might reach 10%, which is close to the record-breaking 11% of Q2 2010. “The reasons for the expected growth of vacancy rate in Moscow shopping centres are the negative forecast for retail market dynamics as well as a significant volume of new projects launched their development before the crisis,” – Tatyana Kluchinskaya, national director, head of retail department, JLL, Russia & CIS, explains. – “Around 460,000 sq m of new quality shopping centres is likely to be completed in Moscow this year, and following the latest market trends, they are to be occupied by average 50-60%”.
“Currently, expansion-oriented retailers enjoy a variety of alternative offers in the existing shopping centres and prefer the malls with clear footfall and predictable sales. The empty spaces of newly-established schemes will be rented out gradually during the first year of operation. In addition, the significant decline in the future supply will support the overall vacancy rate’s contraction in the market in the long term.” - Tatyana Kluchinskaya adds.
