Real estate agencies in the Russian capital are becoming concerned by rising vacancy levels in the city’s shopping centers. JLL’s Moscow office warns that over 1 million sqm of new retail space has been developed, but a lack of interest in expansion by retailers means the new centers are opening half-empty.
Knight Frank warns that there is around 700,000 sqm of vacant space in the city and the situation is being complicated by companies like Adidas, Stockmann, Gloria Jeans and Incity who intend to reduce the number of stores they have there. BNS Group (Calvin Klein and Armani Jeans) are considering whether to withdraw from the Russian market entirely. Euro or dollar denominated rents have become expensive as a result of the rubles devaluation, making stores highly unprofitable. At the same time, shoppers are far more cautious, with stores reporting 20 percent lower footfall during the peak New Year’s week.
For large anchor tenants, rental rates average 13-15 thousand RUB per 1 sqm per year, while gallery tenants pay up to RUB 45,000 per/sqm per year.
