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News Release

Moscow

Q1-Q3 2013 Shopping Centres Completions in Moscow Exceed Almost Twice the Level of Q1-Q3 2012


Moscow, 9 October 2013 – The Moscow retail market has expanded in Q1-Q3 2013 with 142,000 sq m of new quality premises, almost twice the level of Q1-Q3 2012 according to Jones Lang LaSalle. Jones Lang LaSalle also forecasting that Q4 will be the strongest quarter of 2013 for completions in Moscow with more than 100,000 sq m still to come. Q3 saw the opening of one shopping centre with GLA of 35,000 sq m – Raikin Plaza. At the same time this relatively low completions figure exceeds that of Q3 2012 (20,000 sq m).

Tatyana Kluchinskaya, National Director, Head of Retail Department, Jones Lang LaSalle, comments: “Q3 is traditionally marked with low completions; with the majority of new openings scheduled for the end of the year. In Q4 five shopping centres totaling more than 100,000 of GLA are to be opened, Goodzone, Vesna and Reutov Park are among them. If all the announced projects are completed on time, 2013 completions will exceed the level of 250,000 which is the highest figure in three years.”

Shopping centres completions breakdown in Moscow by quarter, 2007-2012
Shopping centres completions breakdown in Moscow by quarter, 2007-2012_09102013.png

Source: Jones Lang LaSalle

In 2014 forecasted completions are even higher. The announced pipeline is a little less than 1m sq m though, according to Jones Lang LaSalle new supply is not likely to exceed 500,000 sq m. Avia Park, Vegas City and Columbus are among the largest projects announced for 2014. The ‘stock per 1,000 inhabitants’ figure is 303 sq m in Moscow and by the end of 2014 this figure is likely to reach 361 sq m.

Moscow shopping centres market balance
Moscow shopping centres market balance_09102013.png

Source: Jones Lang LaSalle

As for the whole Russian market, Q3 2013 completions demonstrate negative dynamics, 167,000 sq m compared to 227,000 sq m in Q3 2012 (30% decrease) and in Q1-Q3 2013 this figure made 721,000 sq m compared to more than 1m sq m in Q1-Q3 2012 (30% decrease). According to Jones Lang LaSalle by the end of the year Russian market will be enhanced with 1.3m sq m of quality retail premises which is less than the figure of 1.6 m in 2012.

Rental levels remained stable in Q3 2013. The prime rent in shopping centres in Moscow is USD3,000-4,500 per sq m per year, the average rent is USD500-1,800 per sq m per year, notes Tatyana Kluchinskaya. The vacancy rate remained at the level of 2.5% which is lower compared to most large European cities.”

Vacancy rate in European cities
Vacancy rate in European cities_09102013.png
Source: Jones Lang LaSalle

Elena Zadorozhnaya, Senior consultant, Tenant Representation, Retail Department, Jones Lang LaSalle, comments: “Having considered the inactivity of the beginning of the year, Q2 and Q3 saw many retailers entering the market. The most active players of Q3 2013 were fashion and accessorize retailers (Happy Socks, Sherry Hill, Pili Carrera, ASH and The Kooples are among the new entrants) along with restaurants and cafes (Quiznos, Natan’s Famous, Krispy Kreme). Along with that a bookstore chain WHSmith opened its first store in a ‘travel format’. Forever21, Schlotzsky’s,  Blue, Great American Cookies, Pretzelmaker, Nando’s, The Cheesecake Factory and others are likely to enter the market. Q3 2013 saw the opening of directly managed flagship stores of Tommy Hilfiger and Hugo Boss on Kuznetskiy Most Street. The first directly managed Gucci store is to open on Petrovka Street.”

 

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 $46.3 billion of real estate assets under management.
In Russia and CIS Jones Lang LaSalle have offices in Moscow, St. Petersburg and Kiev. 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