That represents more than 500,000 sq. m. and Colliers International calculates that the same volume of rental retail space — of the 1.1 million GLA — is expected to go into use in 2015. Knight Frank puts that figure at 570,000 sq. m.
The list of the largest retail projects to open in 2015 includes the Kuntsevo Plaza from ENKA with 65,000 sq. m. GLA; the Columbus from MIRS developers with 140,000 sq. m.; the TsDM at Lubyanka from Gals Development with 34,390 sq. m.; and the MARi by Leader with 70,000 sq. m. Several more major projects are slated to open by the end of the year, including the shopping and entertainment centers Kosino Park by T.E.N. with 39,000 sq. m., Avenue South-West by Tashir with 40,000 sq. m. and Zelenopark by Development Group 19 with 110,000 sq. m.
According to RRG, vacancy rates average 50 percent in new shopping centers, but centers with even higher vacancy rates are also opening for business. For example, the Mozaika shopping center was 80 percent vacant when it opened in 2014, Vegas opened with 70 percent vacancy, Aviapark with 65 percent, Orange Park on Avtozavodskaya Street with 63 percent and the long-awaited Gudzon shopping center on Kashirskoye Shosse with 50 percent. Some new shopping centers were able to lower their vacancy rates to 15–25 percent during the year — such as Aviapark, which got off to a strong start — although the more successful shopping centers that opened prior to the crisis enjoy vacancy rates as low as 5–7 percent.
"Now the demands that tenants make to property owners are all tied in one way or another to considerations of profit," said Eco Office owner Andrei Kovalev. "In the past, retailers often opened stores in shopping centers simply because their competitors rented premises there. However, that marketing approach is now a thing of the past," he said. RRG chairman of the board Denis Kolokolnikov agrees. "Whereas retailers earlier sought to open new territories and stores in order to maintain their image in the heightened competition, now they are counting every ruble: stores must turn a profit. Every store now opens with the single aim of making money," he said.
In choosing a location, potential tenants are primarily interested in current or projected consumer traffic and sales projections. Consultants explain that this makes it difficult for new shopping centers because they typically have low occupancy rates and have yet to establish steady consumer traffic.
Kolokolnikov adds, "Shopping centers must also have strong 'anchor' tenants that are capable of generating a significant flow of customers, preferably an FMCG super- or hypermarket." CBRE Market Research Director Valentin Gavrilov points out that hypermarkets are also facing decreasing revenues despite opening new stores, but that they feel more confident than stores of other formats. Nielsen Russia explains that, because of higher product prices, shopping centers of all formats are experiencing higher cash turnovers now. Lenta hypermarket chain Director for Integration and Format Development Maxim Shchegolev said at the recent Retail Business Russia summit that, although hypermarkets are the primary generators of consumer traffic, they are themselves hoping that individual tenants will invest more in attracting visitors to shopping centers.
Retailers can find available space in almost every shopping center. Rental rates vary little between shopping centers that are already in operation and those that are under construction because rent is almost universally calculated as a percentage of turnover. What's more, fewer retailers are looking for shopping centers with prestigious brand stores and care less whether the centers are conceptually themed or not. In fact, the latter type is often more successful because shopping centers without a given format are able to attract a wider clientele and produce a larger turnover — especially if they are advantageously located. Kovalev said that the non-format Podsolnukhi shopping center owned by Eco Office and located in a residential district by the Ulitsa Podbelskogo metro station maintains occupancy rates above 97 percent.
Experts have found that retailers most frequently request to pay rent as a percentage of sales. But that is not their only request. According to Andrei Kovalev, owners have generally lowered rental rates in one of three ways since the beginning of the year: by reducing fixed-price rents by 5–15 percent, by switching from rates pegged to the dollar to a ruble-based rate, or by switching from fixed rent to a percentage of turnover. "That means [owners are] sharing the risk of doing business with renters," explained TPS Real Estate Commercial Director Alexei Vanchugov at the Retail Business Russia summit. "We are willing to do that if consumers value the tenant. Forget about this being a tenant's market," he said. "This is clearly a consumer's market," he said.
According to Knight Frank, rental rates fell by 5–20 percent for tenants with a variety of product lines. Rents dropped by 5 percent on average for DIY stores larger than 5,000 sq. m., sporting goods stores of 1,500–2,500 sq. m. and entertainment centers of 100–1,500 sq. m. Rent decreased by 10 percent on average for clothing and shoe stores of 50–300 sq. m. and home appliance stores of 1,500–3,000 sq. m. Meanwhile, restaurants of 300–700 sq. m. saw rent drop by an average of 15 percent and stores of 10–70 sq. m. that sell accessories and handbags enjoyed a 20 percent average drop in rent. However, rental rates remained unchanged for hypermarkets of more than 7,000 sq. m. and the smaller "urban hypermarkets" of 3,000–7,000 sq. m.
According to Eco Office, home appliance and electronics stores pay an average of 2–5 percent of turnover while clothing stores typically pay 10–15 percent or more. A mixed scheme is often used in which tenants pay a specified minimum rent plus a percentage of turnover.
In another crisis trend, retailers are looking to save on remodeling costs. "Before the crisis," said Denis Kolokolnikov, "renters preferred premises in 'shell and core' condition. They carried out the necessary remodeling and interior design work themselves. Now, renters wait for owners to do all finishing work at their own expense. They want premises with fully finished interiors that are ready for move-in so as to minimize the investment required for opening each new retail outlet," he said. Kolokolnikov added that shopping center owners try to offer premises that tenants can move into with their goods and literally start doing business the very next day.
Increased loyalty among tenants who have revised their rental rates and the future slowdown in the construction of new shopping centers should combine to reduce vacancy rates. According to Colliers International Russia Regional Retail Property Department Director Anna Nikandrova, "The increased volatility of the ruble limits the ability of both retailers and developers to plan their business. For that reason, demand for retail space will be lower in 2015 and 2016 than during the pre-crisis period. With developers set to scale back construction in 2017–2018, vacancy rates will stabilize and demand for new premises will increase. If current market conditions continue through the end of 2015, business conditions will not significantly change. Higher than usual tensions will characterize the segment until mid-2016, after which a gradual market recovery is possible," she said.
Themoscowtimes.com от 12.11.2015 г.,