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News Release

​Moscow

The annual volume of new Moscow shopping centres will decrease to 460,000 sq m in 2016

​90% of 2016 completions will come from postponed projects


​Moscow, 23 December, 2015 – According to JLL preliminary estimates, the volume of new Moscow retail supply for 2015 is 7% lower YoY – it comes to 560,000 sq m*. Even despite a record first quarter volume of completions in Moscow – about 250,000 sq m entered the market, the next 3 quarters were characterized by negative dynamics in terms of new shopping centre deliveries.

Originally forecasted 2015 supply (450,000 sq m) had been expanded by adding Zelenopark SEC in Zelenograd to Moscow stock. Such shopping centres as Columbus, Mari, Kuntsevo Plaza, RIO on Kievskoye Highway, Centralny Detskiy Magazin on Lyubyanka and others were delivered in 2015 in Moscow.

The downward trend in terms of new deliveries and new shopping centre construction will continue in 2016. “According to our expectations, around 460,000 sq m of new quality shopping centres is likely to be completed in the next 12 months, which is 18% lower than 2015 results. It should be noted, that 90% of 2016 completions will come from postponed projects.” – Maria Shpakova, Retail Market Analyst, JLL, Russia & CIS, notes. Such shopping centres as Riviera, Moremall Moscow, Polezhaevskiy, Riga Mall, 2nd phase of Metropolis are in the announced pipeline for 2016.

Shopping Centres Completions Dynamics in Moscow
Shopping Centres Completions Dynamics in Moscow_23122015.png

Source: JLL

Objective reasons for the slowdown in developers’ activity in Moscow market and Russia as well are limited debt financing together with comparatively low retailers’ demand in newly opened shopping centres. Today retailers are looking for premises in the most attractive and historically successful projects with strong track record or in almost completed projects.” – Tatyana Kluchinskaya, National Director, Head of Retail Department, JLL, Russia & CIS, explains. – “As a result, today it takes 2 years to fully launch a project while previously this period was about half a year. This is supported by high vacancy rate in shopping centres which have opened in past 2 years: thus, in the beginning of Q4 2015 the vacancy rate for shopping centres delivered in 2014 and 2015 accounted for 19.4% versus market average 7.5%.”

At the end of 2015 Moscow shopping centre density increased up to 388 sq m per 1,000 inhabitants compared to 345 sq m year ago. If the forecasted number of shopping centres is completed, Moscow will have 423 sq m per 1,000 inhabitants in terms of shopping centre density. 

Stock per 1,000 inhabitants at the end of 2015
Stock per 1,000 inhabitants at the end of 2015_23122015.png 

Source: JLL


According to JLL, new Moscow retail supply will decrease in next 2-3 years. “The construction of new projects almost will not start except next phases of projects with a strong track record and clear indicators and small local projects with comparatively lower debt financing, faster development and easier leasing due to their scale.” - Tatyana Kluchinskaya says. – “In the absence of a significant volume of new supply we will see gradual occupation of existing projects – retailers will lease premises there in order to realize their expansion plans. At the same time we expect further market movement towards market which favours the tenant in accordance with the European trend.”


* Hereinafter we use gross leasing area (GLA)


About JLL

JLL (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. A Fortune 500 company with annual fee revenue of $4.7 billion and gross revenue of $5.4 billion, JLL has more than 230 corporate offices, operates in 80 countries and has a global workforce of approximately 58,000. On behalf of its clients, the firm provides management and real estate outsourcing services for a property portfolio of 3.4 billion square feet, or 316.0 million square meters, and completed $118 billion in sales, acquisitions and finance transactions in 2014. Its investment management business, LaSalle Investment Management, has $57.2 billion of real estate assets under management. JLL is the brand name, and a registered trademark, of Jones Lang LaSalle Incorporated.

In Russia and CIS JLL has offices in Moscow, St. Petersburg and Kiev. JLL, Russia & CIS was voted Consultant of the Year in 2004, 2006, 2007, 2008, 2009, 2010, 2011, 2012, 2013, 2014  and 2015 at the Commercial Real Estate Awards, Moscow; Consultant of the Year at the Commercial Real Estate Awards 2009, St. Petersburg; Consultant of the Year at the RCSC Awards in 2015, and The Best Real Estate Consultancy in Ukraine at the Ukrainian Property Awards in 2013.