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Moscow

Moscow Shopping Centre Stock Increased by More than 100,000 sq m of GLA

Jones Lang LaSalle presents Q2 2013 retail real estate market results


Moscow, 10 July 2013 — The Moscow market of quality shopping centres was enhanced with delivery of 107,200 sq m of GLA in Q2 2013. According to Jones Lang LaSalle this figure exceeds the completions levels of Q2 2012 and Q2 2011 when the market did not receive any new quality space.

The largest scheme completed in 2013 is RIO Leninskiy (40,000 sq m of GLA). Additionally two outlet schemes, Fashion House Outlet (28,500 sq m of GLA) and Vnukovo Outlet Village (16,500 sq m of GLA) were open in Q2 2013.

The announced pipeline for H2 2013 is about 150,000 sq m of quality space. However, the launch of several projects could be postponed.

Tatyana Kluchinskaya, National Director, Head of Retail Department, Jones Lang LaSalle, Russia & CIS, comments: “If all the announced pipeline projects are completed on time the annual completion will exceed 250,000  sq m in 2013 which will be the highest figure in three years. The Moscow market received 149,000 sq m of new space in 2011 and 232,000 sq m in 2012.  We are currently witnessing progressing revitalization of new development in retail real estate which will reach the highest point in 2014 when the market will see about 600,000 sq m of new quality space.”

Moscow retail market balance
 Moscow retail market balance_07_2013.png
Source: Jones Lang LaSalle
 
If all the announced projects are completed on time the Moscow market density will reach 313 sq m per 1,000 inhabitants by the end of 2013 and 363 sq m per 1,000 inhabitants by the end of 2014.
 
Tatyana Kluchinskaya adds: “As a result Russian capital will compete several cities of Western Europe, namely Amsterdam (370 sq m per 1,000 inhabitants) and Berlin (348 sq m per 1,000 inhabitants). Although the ‘stock per 1,000 inhabitants’ figure will reach the level of several European capitals this figure should not be considered as the saturation point. Russian market has its own development history and the saturation point is different here. Krasnodar, for instance, is still popular with retailers who are still willing to open new shops in the city that still offers new schemes regardless of high market density (829 sq m per 1,000 inhabitants).” 
 
Retail stock per 1,000 inhabitants. European comparison
 Retail stock per 1,000 inhabitants. European comparison_07_2013.png
 
Source: Jones Lang LaSalle
 
Rental levels remained stable in H1 2013. The prime rent in shopping centres is USD3,000-4,500/sq m/year, the average rent is USD500-1,800/sq m/year. The vacancy rate remained at the level of 2.5%.
 
Vladimir Aleksandrovskiy, Head of Retail Tenant Representation, Retail Department, Jones Lang LaSalle, Russia & CIS, sais: “New retailers keep targeting the Russian market. Takko Fashion (Zolotoy Vavilon SC on Prospekt Mira Avenue), Brooks Brothers and Red Valentino (GUM Shopping Centre), and Boardriders (MEGA Belaya Dacha) should be noted among fashion brands that opened their first stores in Moscow. Smoothie Factory opened its first corner on the food court of Gallery Aeroport SC, chocolate boutique Debauve & Gallais opened its first street retail store in 1st Tverskaya-Yamskaya street. Jewellery brand Alcozer & J (Zhukovskogo street, 14) and Mado cafe (Nevskiy Avenue, 124) have chosen St. Petersburg for opening their first stores in Russia.”
 
“We are expecting several more international players to target the Russian market in the nearest future. The Cheesecake Factory, Harman, Collezione, Schlotzsky’s, and WHSmith are among them. Forever21 plans to open its first store in AFIMALL City shopping centre in H1 2014. The same period was chosen for the opening of the first directly managed Tiffany&Co store in GUM shopping centre”, - added Vladimir Alexandrovskiy.
 
The announced pipeline for 2013 makes 1.8 m sq m of quality retail space which is a record figure for post crisis years. However, according to new Jones Lang LaSalle forecast this figure will not exceed 1.5 sq m which corresponds to the levels of previous years.
 
 
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 and completed $63 billion in sales, acquisitions and finance transactions in 2012. Its investment management business, LaSalle Investment Management, has $47.7 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