It remains to be seen if Russia will become Europe’s largest shopping center.Source: ITAR-TASS
Analysts at Cushman & Wakefield believe in two years Russia will become Europe’s largest shopping center. So far, France and Great Britain have been leading in terms of the number of shops and malls opened every year.
Currently, France holds 16.95 million square meters retail space, while Great Britain holds 16.48 million square meters, and Russia with 16.47 million square meters, is at the heels of both.
Russian commercial property developers have promised to open 2.87 million square meters of shopping centers this year, taking up almost a quarter of all European projects.
However, experts at Cushman & Wakefield expect no more than 1.6 million square meters, arguing that projected numbers are always higher than those commissioned by the end of the year.
Even in the worst-case scenario, Russia will still set a record in Europe for newly commissioned shopping malls, outstripping Great Britain in total retail space.
Developers in Great Britain plan to build a modest 325,000 square meters of retail space this year, while the figure for France stands at 1,390,000 square meters for 2013–2014, said Michael Rodda, head of Retail Property Investment in Europe and the Middle East at Cushman & Wakefield.
Russia’s retail space expansion has been driven by regional development. According to Tatyana Kluchinskaya, head of the Retail Department at Jones Lang LaSalle, not a single high-quality shopping center was commissioned in Moscow in the first quarter of 2013.
Moscow still awaits a maximum of 300,000 square meters to be commissioned by the end of the year. This said, some 70 percent of the new shopping centers are being built outside Moscow.
“A few years ago, retail chains were reluctant to expand. Now, many brands are expanding regionally, including into small towns, their top priority. Leroy Merlin, Jeans Symphony and Subway are just some of the names that have already confirmed they are planning to establish a presence in cities with populations of fewer than one million people,” Kluchinskaya added.
Last year, Mytishchi, Nizhny Novgorod, Sochi, Surgut and Yekaterinburg were the top five cities with the most newly developed retail space.
The first quarter of 2013 saw large, new shopping malls added in St. Petersburg, Belgorod and Volgograd.
Meanwhile, Russia is still far behind China. Currently, China accounts for more than 50 percent of the 32 million square meters of retail space under construction globally.
Seven of the world’s ten most rapidly developing retail property markets are Chinese cities. Chengdu alone is on track to open 2.9 million square meters of shopping space in the next three years, and Tianjin is likely to develop 2.1 million square meters.
First published in Russian in Vedomosti.
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