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News Release

Moscow

​Six months with no completions: no new quality shopping centres enter the Moscow market for the second quarter in a row

This helped the vacancy rate in shopping centres to drop to 6.4% in Q2 2017


​​​​Moscow, July 6, 2017 – According to JLL, the vacancy rate in existing shopping centres in Moscow declined from 7.2% to 6.4% in Q2 2017. JLL analysts expect this indicator to decline further, to 6% by the end of the year, the lowest level since the beginning of 2015.

​Supply and vacancy rate on the Moscow retail market

Supply and vacancy rate on the Moscow retail market_06072017.png

​Source: JLL

Some 236,700 sq m of new quality shopping centres* are announced for delivery in H2 2017. The annual figure will be the lowest for the last four years, down 46% from 2016. The main projects expected later this year are Vegas Kuntsevo (113,400 sq m), Vidnoe Park (45,000 sq m) and Arena Plaza (20,000 sq m).

“The lack of recent completions and significant new retail volume delivered to the market over the past three years (about 1.6 m sq m) encouraged retailers to expand their presence in Moscow shopping centres opened in 2014-2016. This reduces the vacancy which has spiked in the recent period of active construction.” – says Ekaterina Zemskaya, Regional Director, Head of Retail Group, JLL, Russia & CIS. – “In H1, several SCs experiencing stabilization and improvement of their operational indicators have attracted new operators. This has increased the appeal of new projects to consumers. Approximately 65% of leased areas were absorbed in projects delivered in 2014-2016.”

The Russian market continues to attract new international retailers, with 24 players opening their first stores in H1 2017. Half of these have been fashion retailers. The activity of new international retailers is comparable to H1 2016, when 26 new brands entered the Russian market. Nearly all international operators chose Moscow as their preferred location, except for one new opening in St. Petersburg. Most of the newcomers represent premium and luxury segments.

“Most retail chains started their operations in Russia in shopping centres – 71% of the total number of H1 2017 openings (17 of 24 newcomers). Meanwhile, premium and luxury retailers prefer to open their first stores in street-retail (six of seven retailers opened store in the main Moscow retail corridors)." – notes Oksana Kopylova, Head of Retail and Warehouse Research, JLL, Russia & CIS. – “European retailers were the most active in the past six months, accounting for about 80% of new openings. Italy traditionally leads among the debutants on the Russian market: every fourth newcomer in the last five years has been Italian.”

Among notable débuts was Eataly, the first such store in Russia and the second largest Italian marketplace in the world. Another was the opening of French Jewelry retailer Mauboussin on Nikolskaya Street. A premium Bags & Accessories brand Mandarina Duck returned to the market with a store in Metropolis. Three foreign retailers left the market over the past six months: Finlayson, Takko Fashion, and Kipling.

​Retailers on the Russian market: entries and exits
Retailers on the Russian market_entries and exits_06072017.png 
Source: JLL

Rents for a single retail gallery unit of 100 sq m in shopping centres remained stable during the first half of the year: prime rent at RUB195,000 per sq m per year, average rent at RUB74,000 per sq m per year.


* This and other figures refer to gross leasable area (GLA).


About JLL

JLL (NYSE: JLL) is a leading professional services firm that specializes in real estate and investment management. A Fortune 500 company, JLL helps real estate owners, occupiers and investors achieve their business ambitions. In 2016, JLL had revenue of $6.8 billion and fee revenue of $5.8 billion and on behalf of its clients managed 4.4 billion square feet, or 409 million square meters, and completed sales acquisitions and finance transactions of approximately $136 billion. At the end of the first quarter of 2017, JLL had nearly 300 corporate offices, operations in over 80 countries and a global workforce of more than 78,000. As of March 31, 2017, LaSalle Investment Management had $58.0 billion of real estate under asset 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, 2006-2017 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.