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News Release

Moscow

Arbat Street leads in occupancy among main Moscow retail corridors

​Tverskaya and Myasnitskaya streets complete the top-3


​Moscow, 19 May, 2016 – According to JLL, by the end of Q1 2016 Arbat Street led the rating of the most occupied Moscow retail corridors: its vacancy rate dropped by 2.3 pp to 6.3% in the first three months of the year. Tverskaya and Myasnitskaya streets maintained their top positions with vacancies at 6.5% and 6.8% respectively.

“Arbat is one of the most popular streets for tenants of catering segment. Nowadays, more than 30% of requests for high street space come from restaurants and cafes. Many brands introduce new formats, and what can be the better place than Arbat to position yourself? Advantages of this location are high pedestrian traffic, growing number of tourists and the absence of “inactive” parts,” – Yulia Nazarova, Head of Street Retail, JLL, Russia & CIS, comments. – “For comparison, other locations favoured by catering, Myasnitskaya and Kuznetskiy Most, demonstrate higher vacancy rate (9.2% and 18.8% respectively) due to pour demand for premises located at the ends of these streets, which are away from metro station exits and main pedestrian flows.”

Vacancy rate for the Moscow main retail corridors
Vacancy rate for the Moscow main retail corridors_19052016.png

Source: JLL

Vacancy rate reduction was also observed on Novy Arbat Street (down to 10.3%), on 1st Tverskaya-Yamskaya street (to 11.0%), on Patriarshie Prudy (to 11.1%), whereas it has increased on Nikolskaya Street to 28%. The overall vacancy rate for the main retail corridors was flat at 12.5% in Q2 amid mixed trends in different locations. According to JLL forecasts, Moscow high street occupancy will increase in the near term thanks to active interest of restaurateurs.

Currently, the largest share of occupied premises on the main Moscow streets is occupied by restaurants and cafes (31%). “Catering tenants dominate on Myasnitskaya Street (44% of the total number of tenants), Pyatnitskaya Street (42%) and Patriarschie Prudy (41%),” - Konstantin Loginov, Retail Market Analyst, JLL, Russia & CIS, notes. – “The second largest segment (17%) is “banks and services”, which dominate on 1st Tverskaya-Yamskaya and Garden Ring streets. Fashion retailers are the third most represented tenant type (12.5%). Streets with the highest share of fashion are Stoleshnikov Lane, Nikolskaya and Petrovka Streets.”

Breakdown of High Street Tenants by Profile
Breakdown of High Street Tenants by Profile_19052016.png

Source: JLL

Retail corridors also attract new brands to open their first stores and cafes in Russia. Thus, in Q1 2016 three out of nine newcomers into the Moscow market chose high street premises for opening their first stores. For instance, a Rolex monobrand store appeared on Teatralny Lane, Laduree opened on Malaya Bronnaya Street, Charlotte Olympia on Dmitrovsky Lane.

“The centre of Moscow has undergone an impressive change. Widened pedestrian areas and a fresh look attracted more retailers, including some international brands, and allowed them to open flagship stores. Among foreign brands are both newcomers into Russia and established players for which a central location brings status and a position on the market. Opening a store on high streets, especially a flagship one, guarantees not only consumer audience, but also brand recognition among Muscovites and Moscow guests,” - Yulia Nazarova comments. – “Moreover, high street premises become more affordable: It is possible to negotiate rents either as a percentage of retail turnover for fashion retailers or to fix rent in rubles in a long-term contract.”

Moscow High Street Retail Average Rents* in Q1 2016
Moscow High Street Retail Average Rents in Q1 2016_19052016.png

* Rents are given for premises of 100-300 sq m with a separate entrance and a showcase on the first floor inside the Third Ring Road. For multi storey buildings and larger premises, rents may be lower.

Source: JLL


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 $5.2 billion and gross revenue of $6.0 billion, JLL has more than 280 corporate offices, operates in more than 80 countries and has a global workforce of more than 60,000. On behalf of its clients, the firm provides management and real estate outsourcing services for a property portfolio of 4.0 billion square feet, or 372 million square meters, and completed $138 billion in sales, acquisitions and finance transactions in 2015. Its investment management business, LaSalle Investment Management, has $58.3 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, 2006-2016 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.