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In 2016, Russia Total Shopping Centre Stock will Exceed 21m Sq M

Russia maintains its lead in European shopping centre stock
Russia maintains its lead in European shopping centre stock

September 07, 2016, 13:22 (PX Newswire)

MOSCOW, 06 September, 2016 – According to JLL estimates, in 2016, some 1.9m sq m of new quality shopping centres can enter Russia retail market. About 437,000 sq m completed in H1 2016 (42% down YoY). As a result, the total Russia stock will rise to more than 21m sq m by the end of the year, which is the highest level in Europe.

In terms of total stock, top 5 European retail markets also include the UK (19.2m sq m at the end of 2016), France (16.8m sq m), Italy (15.9m sq m) and Germany (15.3m sq m). Ukraine and Romania retail market share the 11th place, each with 2.9m sq m of quality retail stock.

The largest Russian regional cities by retail stock include Yekaterinburg (730,000 sq m), Krasnodar (670,000 sq m), Samara (549,000 sq m), Nizhniy Novgorod (524,000 sq m) and Chelyabinsk (430,000 sq m). For comparison, at the end of H1 2016, Moscow stock accounted for 4.9m sq m, St. Petersburg stock – 2.2m sq m. By the end of the year, the major regional completions are expected in Samara and Tyumen, where total stock will grow to 664,000 sq m and to 464,000 sq m respectively.

“Despite the large completions volume, shopping centre density in Russia remains rather low, about 140 sq m per 1,000 people, which is comparable to the Turkish developing market,” - Ekaterina Andreeva, Investment & Retail Markets Analyst, JLL, Russia & CIS, comments. “At the same time, the leader in quality shopping centre stock density in Europe is Luxembourg, due to its small population, with 618 sq m per 1,000 people. Still, total stock in this country is the lowest. The Netherlands ranked second with 517 sq m per 1,000 inhabitants. The density in the UK stays at 293 sq m per 1,000 people, in France – 251 sq m per 1,000 people and in Germany – 186 sq m per 1,000 people.”

In H1 2016, the leader in shopping centre density in Russia remains Krasnodar, with 808 sq m of quality premises per 1,000 people. Yekaterinburg (532 sq m) and Samara (468 sq m) follow it. For comparison, St. Petersburg density accounts for 417 sq m, Moscow – for 394 sq m.

By the end of the year, Tyumen and Samara will be ahead of Yekaterinburg by shopping centre density. Due to the total completions in Tyumen this indicator will rise from 441 sq m per 1,000 people to some 600 sq m. After Good’ok shopping centre enters the market, Samara will stay at the third place, with 566 sq m of quality malls per 1,000 people.

“The bulk of shopping centre supply is coming in Russian cities with population of less than 1m people – 51% of the total completions are expected there; 32% share is expected in Moscow and Moscow region. It is important that the development of these malls started to construct while the economy was stable and the market grew actively,” – Anton Korotaev, National Director, Head of Retail Strategic Consulting, JLL, Russia & CIS, notes. – “In 2011-2013, developers focused not on Millionniki but on smaller cities with low retail density and relatively high level of purchasing power.”

“Today, despite the increasing shopping centre density in Russian cities, there is still a potential for further development, as the existing stock is not sufficient in some locations. However, the projects are better to be developed after recovery of the economy. In the current situation development of new malls in regional cities is not financially attractive, due to the expensive financing, low rental levels and the fact that many retailers are not ready to open their stores in Russian regions”, - Anton Korotaev concludes.

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 $59.1 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 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.

For further information, visit www.jll.ru

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