Fashion operators opened the most new stores in high-quality Russian shopping centres (accounting for 59% of retail space) in Q1 2016. Entertainment operators were in second place with a share of 18%, mainly accounted for by the opening of the Kidzania family entertainment centre, with an area of 10,000m2 at the Aviapark shopping mall. Hobby goods were in third place (6%). Fashion operators had the highest number of openings in leading shopping centres (54 stores) and food service companies were in second place (12 new sales points), according to Colliers International.
In general, large shopping centres, which in the past few years opened with high vacancy rates, are now rapidly filling with tenants. In addition, some rotation of tenants in long-existing high-end shopping centres has been observed. The leading Moscow shopping centres in terms of number of stores opened (opened before 2016) are Aviapark, Columbus, Mozaika, Zelenopark, Yevropeisky and Afimall City – 80 new tenants with total retail space of more than 55,000 m2 opened in these malls in Q1 2016.
About a third of new store openings (32%) were at the Aviapark shopping mall, including major tenants like Kidzania, KIABI, Gloria Jeans and Leonardo; 26% opened in the Zelenopark shopping mall, which also launched Fashion Plaza – a gallery of clothing and footwear operators, including the fashion anchor stores Zara, H&M and Reserved – in Q2.
Regarding market entry of new international brands in Q1 2016, Moscow shopping centres opened the first mono-brand stores in Russia of such chains as Victoria's Secret (Yevropeisky), Newby London (Afimall City), Barbour (GUM), Armani Exchange (Aviapark, MEGA Teply Stan, Mega Khimki, Avenue South-West), Kiko Milano (Okhotny Ryad)**, Holika Holika and Lion of Porches (Aviapark), Urban Decay (Atrium), and Loriblu in the discount format (Vnukovo Outlet Village). In addition, such international brands as the Israeli fixed-priced coffee chain Cofix, the Canadian coffee chain House Press Café, and the Austrian decorative lighting brand Eglo have announced plans to enter the Russian market and will open their first mono-brand boutiques in Russia in Q2.
In Q1 2016, a total of four professional shopping centres were completed, with total area of 129,600 m2, which is 61.5% less year over year. These are Riviera (100,000m2) Vostochny Veter (15,000m2), Akvarel Yuzhnaya (7,600m2), and Novy (7,000m2).
Vacancy in Q1 2016 increased slightly to 8.5%. A rapid succession of store openings by tenants in malls such as Aviapark, Columbus, Afimall City and Zelenopark in Q1 2016 offset the rise in vacant space formed by the opening of the Riviera shopping mall. If the trend of rapidly filling retail space in existing shopping centres in Moscow persists, Colliers forecasts a vacancy rate of about 10%-11% for the year, based on information on contracted tenants and those carrying out finishing work on premises slated for opening in shopping centres before the end of 2016.
Anna Nikandrova, partner, Colliers International Russia: “The supply of quality retail space in the Moscow Region will decline gradually in the next five years. First, developers will be selective about new construction sites, leading to a reduction in annual completions. Second, retail space in existing shopping centres will gradually be filled amid a recovery in demand from retailers. In general, the commercial real estate market in the Moscow Region is not expected to grow before 2020, subject to improvement of the economic climate and the implementation of developers’ current construction plans for shopping malls.”
