Russian retail looking robust — GVA Sawyer

A new report from GVA Sawyer suggests that the Russian retail and entertainment sector has been holding up well in 2009.

During the period from January to June 2009 a volume of 2.27m sq m GLA of shopping centre premises was commissioned. Despite the economic crisis, the volume of commissioning in the last half-year was a record for the last few years. The increase in supply in the H109 was provided by five quality shopping centres, Metropolis, Megapolis, Spektr, Filion and Na Begovoy.

GVA Sawyer`s research shows that large real estate properties are mostly being commis¬sioned in Moscow - and that the increase in premises volume during the last year was provided mainly by regional and community centres exceeding 30,000 sq m GLA. According to the research, vacancy rates in prime retail centres remain at a low level (0.5-1%) and at 3.5% in centres of quality. The highest vacancy rate is being experienced by shopping centres which have been operating for less than six months (up to 15-20%). Total footfall in the retail sector has dropped by about 4%, year on year. The shift from a sellers to a buyers market is evident in terms of rents, with lease agreements being concluded with minimal deposits and rents fully or partially indexed to retail turnover. The most negative aspect of H109 has been the exit of large chain companies from the market. Grossmart, Tochka vkusa, Bananamama, Arbat prestige, Smak, Samohval, Bookberry, Neotorg, PurPur, 7 Stars and Sprandi have all declared bankruptcy and closure. A number of chains are now in a default condition in terms of payments to suppliers and creditors, including Mosmart, Sunrise, Dikaya Orkhideya, Alpi, Dixis, and Matritsa.

Despite the crisis` negative influence, GVA Sawyer have shown that the entry of new players to the Russian market continues. Wal-Mart has registered a subsidiary in Russia and now is showing interest in buying one of the federal chains; Selgros has opened its first cash & carry in the Moscow region; Burger King is planning to enter the market; Gap, H&M and Kika brands have already appeared in Moscow; Peek und Cloppenburg, Harvey Nichols, Uniqlo, Hamleys department stores are planning to open; the chain of Debenhams department stores is returning to the country again. Large international players like Metro Group, Auchan, Carrefour have not changed their plans for active development.

REurope, №60, November,2009