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Moscow, 12 July, 2016 – According to JLL estimates, 180,000 sq m of quality shopping centres* were completed in Moscow in Q2 2016, comprising Riviera SC (100,000 sq m) and Riga Mall (80,000 sq m). Still, total completions in H1 2016 have dropped by half in comparison with the same period of last year.
Overall, Moscow quality shopping centre supply is likely to increase by 430,000 sq m this year, which is 24% less on YoY basis. Key announced schemes include Metropolis shopping centre (2nd phase), Oceania, Khorosho!, and Butovo Mall.
Moscow Shopping Centre CompletionsSource: JLL
“In spite of new shopping centres openings, vacancy rate remained the same as in Q1 2016 at 8%. This shows that both retailers and landlords have become comfortable in the current market conditions. Strong retail chains keep expanding, opening new stores in recently commissioned malls. Landlords adjust by providing flexible lease terms to tenants. As a result, we see gradually rising occupancy in shopping centres that entered the market during the tough period of 2014-2015,” –
Tatyana Malyanova, Head of Shopping Centre Agency, JLL, Russia & CIS, comments. – “At the same time, tenant rotation is rather high: due to appearance of new premises retailers continue to close down less effective stores, find new locations and change format of their stores.”
Nevertheless, JLL analysts expect a slight rise in vacancy rates, up to 10% in H2 2016 due to expected completion of 250,000 sq m of new retail space.
Overall Vacancy Rate in Moscow Shopping Centres
“Together with the expansion of existing retailers, new foreign brands enter the Russian market. According to our calculations, 19 new brands have appeared on the market in H1 2016. Among the newcomers are Italian cosmetics store KIKO Milano in Okhotny Ryad shopping centre, Italian fashion brand Armani Exchange in Aviapark, Mega Tyopliy Stan, Mega Khimki and Avenue South West.” –
Maria Shpakova, Retail Market Analyst, JLL, Russia & CIS, notes. – “In the near future, Dutch underwear brand Hunkemoller intends to open its doors in Mega Khimki, British footwear brand L.K.Bennett is expected to appear in Metropolis, and Israeli coffee shop Cofix is to enter the Moscow market as well.”
Retailers on the Russian Market: Entries and Exits
* This and other figures refer to gross leasing area (GLA).
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, 2016, St. Petersburg; Consultant of the Year at the RCSC Awards in 2015.
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