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JLL presents the results of dining market research
Moscow, 17 November, 2016 – As retail market leaders discuss new market trends and challenges at MAPIC annual exhibition in Cannes, JLL reveals the results of the ‘Food & beverage (F&B) in Moscow and St. Petersburg shopping centres’ report.
A rising share of F&B shopping centres has become a global trend, which is clearly observed on the European market. According to JLL, food in European shopping centres averages 15% of the total GLA and is a crucial anchor in the tenant mix. Understanding the importance of the dining trend, landlords give preferences to F&B tenants. There are still few shopping malls in Russia where the dining area is recognized as a destination. Although there are some examples which fit the global trend.
“The overall supply of quality shopping centres in Russia has doubled over the last five years, exceeding 20m sq m*. In 2015, 1.9m sq m was added, and similar volume is expected in 2016,” –
Maria Shpakova, Senior Retail Market Analyst, JLL, Russia & CIS, comments. – “Such high volume of new retail space provides consumers with more choices. Their preferences also evolve. During the acute phase of the current recession, consumers have had to cut their spending and adjust shopping habits. As a result, competition between shopping centres for a loyal customer has become more intense. Well-organized dining area has become one of the ways to attract more people.”
Moscow is ahead of other European capitals by the total shopping centre supply, with 4.9m sq m of quality retail space in 104 shopping centres, while the total retail stock in St. Petersburg is 2.2m sq m in 58 malls. According to JLL estimates, the average F&B share in total GLA of Moscow shopping centres is about 4%. However, in some Moscow malls it is well above this level and close to the European average. In St. Petersburg shopping centres, the average F&B share is slightly higher than in Moscow, at 5%, as there are fewer large centres in the city.
The largest F&B shares** in Moscow are in Evropeysky (15.4%), AFIMALL City (10.9%), Atrium (10.7%), and Okhotny Ryad (10.3%). The largest number of F&B units is in Evropeysky (67 units), Aviapark (60), and AFIMall City (51).
F&B in Moscow Shopping Centres
Galeria has the highest density of foodservice units among St. Petersburg shopping centres (9.7%). Other malls with large F&B shares are Nevsky Centre (8.5%), and Grand Kanyon (7.7%). The largest number of food concepts among St. Petersburg shopping centres is in Galeria (32), Leto (31), Grand Kanyon (28) and Piter Raduga (27).
F&B in St. Petersburg shopping centres
“Apart from the F&B space allocation, another ingredient of a successful F&B offer in a shopping mall is diversity. A broad range of operators helps to attract more customers. A combination of brands with high awareness and new interesting local concepts can boost the operational performance of a shopping centre. In particular, landlords need to pay attention to unique, one-of-a-kind food concepts which can become attraction points.” –
Tatyana Malyanova, Head of Shopping Centres Agency, JLL, Russia & CIS, notes.
There are five typical food service categories in a shopping centre, Casual Dining, Café, Fast Food, Impulse Kiosks, and Gourmet Food.
The Fast Food category in Russia is the only one comparable with Europe in its share in the total F&B space (about 30%). The shares of other categories divert from the European levels: the share of Casual Dining in Russia exceeds 50% of total F&B supply vs 35% in Europe. The Café category is relatively undersupplied in Russia compared to Europe: its share in St. Petresburg malls is 15%, in Moscow – 10%, while in Europe it accounts for 25%. The dominance of a single category in Russia indicates a limited variety.
Comparison of European & Russian F&B structure in shopping centres
“Most Russian shopping centres have standard food offers, which does not serve as an anchor and attraction point. Still, there are examples of well-organized, attractive concepts with a modern design and a unique variety of food operators.” –
Maria Shpakova says. – “For example, in Moscow, some newly constructed malls provide visitors with trendy F&B areas, and a few older malls are in the process of F&B refurbishment. Russian shopping centres follow the global tendency of paying more attention to F&B by allocating larger areas and diversifying F&B offers. We also see that the F&B share in most successful and popular malls in Moscow and St. Petersburg are higher than the market averages. Developing a unique F&B offer attracts more consumers, supports tenant turnover, rental payments and capital values. Careful selection of food concepts enhances the overall attraction of a shopping mall and boosts its competitiveness in the current market.”
* Hereinafter we use gross leasing areas (GLA).
** We focus on 14 shopping centres out of 104 in Moscow and 10 out of 58 in St. Petersburg, which are the most developed and demonstrate the benefits of having quality food provisioning. We use data as of H1 2016.
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. JLL is a Fortune 500 company with, as of December 31, 2015, revenue of $6.0 billion and fee revenue of $5.2 billion, more than 280 corporate offices, operations in over 80 countries and 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. As of September 30, 2016, its investment management business, LaSalle Investment Management, has $59.7 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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