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News Release

Moscow

Russian retail market received 300,000 sq m of new quality premises

The Moscow market is likely to receive the same volume by the end of 2013


Moscow, 24 April 2013 – Russian retail real estate market received 300,000 sq m of new quality premises in Q1 2013, which is comparable to the previous years (385,000 sq m in Q1 2012 and 281,000 sq m in Q1 2011). The amount of new schemes is smaller compared to Q1 2012, while the average GLA of newly constructed shopping centres increased, from 32,000 sq m to 50,000 sq m, Jones Lang LaSalle reports.

Shopping centre completions dynamics in Russia, (Q1 of each year)
Dynamics.png
Source: Jones Lang LaSalle

Tatyana Kluchinskaya, Head of Retail Department, reports: “There were no new deliveries in Moscow in Q1 2013. It doesn’t demonstrate any decrease in developers’ activity as the majority of openings are planned for the midyear and the turn of the year. The announced pipeline for Moscow for 2013 exceeds 300,000 sq m which is equal to Q1 2013 completions in Russia. However, it is common for a number of projects to be postponed – in this case the completions level will be lower. Vesna SC in Altufievo and Rio on Leninskiy Avenue are among the major projects planned to open in 2013.”

Moscow market balance

Market balance.png
Source: Jones Lang LaSalle

Average rental and vacancy rates remained level in Q1 2013. Prime rents in shopping centres were USD3,000-4,500/sq m/year and average rents in shopping centres were USD500-1,800/sq m/year. The vacancy rate remained at the level of 2.5%. We anticipate an increase of the vacancy rate not earlier than 2014 due to several openings of large-scale schemes.

Tatyana Kluchinskaya, Head of Retail Department, told: “Developers continue the regional expansion, 66% of the pipeline for 2013-2014 is planned for regional cities (excluding Moscow Region). Furthermore, 46% of the pipeline for 2013-2014 is planned for the cities with a population of less than 1m people. Retailers continue to announce their development plans. Regions including small cities, become a priority in retailers’ development strategy, while several years ago just few of them considered regional markets. Several retailers confirmed their plans to develop in cities with a population of less than 1 m people, Leroy Merlin, Jeans Symphony and Subway are among them.”

Several foreign retailers targeted the Russian market in Q1 2013. Restaurants and cafes (Marukame, Lavazza Espression), jewellery and accessories (Trollbeads) and fashion retailers (Herve Leger) are among the newcomers. In 2013 several brands are likely to enter the Russian market, namely Marble Slab, Great American Cookies, Pretzelmaker, Blue and Nautica.

Vladimir Alexandrovsky, Head of Retail Tenant Representation, announced: “Simultaneously with new brands entering the Russian market, foreign retailers often prefer to manage their businesses directly, which is a persisting trend. For example, Cortefiel Group bought out Springfield and Women’secret chains from its former Russian partner, Melon Fashion Group, and will manage them directly; Tommy Hilfiger took the decision to develop in Moscow independently.”


About Jones Lang LaSalle
Jones Lang LaSalle (NYSE:JLL) is a professional services and investment management firm offering specialized real estate services to clients seeking increased value by owning, occupying and investing in real estate. With annual revenue of $3.9 billion, Jones Lang LaSalle operates in 70 countries from more than 1,000 locations worldwide. On behalf of its clients, the firm provides management and real estate outsourcing services to a property portfolio of 242 million square meters. Its investment management business, LaSalle Investment Management, has $47.0 billion of real estate assets under management.
In Russia and CIS Jones Lang LaSalle have offices in Moscow, St. Petersburg, Kiev and Aktau. Jones Lang LaSalle, Russia was voted Consultant of the Year in 2004, 2006, 2007, 2008, 2009, 2010, 2011, 2012 and 2013 at the Commercial Real Estate Awards, Moscow and Consultant of the Year at the Commercial Real Estate Awards 2009, St. Petersburg.
For further information, please visit www.jll.ru