IKEA Shopping Centres Russia reports on activity during 2014 and future development plans
IKEA Shopping Centres Russia has seen significant activity at its 14 MEGA branded malls located across Russia in 2014, as international retailers continue to seek growth in the country. Since the beginning of this year, several international brands have entered Russia for the first time via IKEA Shopping Centres Russia’s MEGA malls. In addition, a further 56 western brands already operating in Russia have taken new space at MEGA malls, or have extended their existing leases, which equals a total of 25,000 sqm.
International brands that have launched in Russia for the first time this year through MEGA shopping centres, include Violeta by Mango already present in five MEGA malls, Lefties the fashion brand owned by Inditex, opened in three IKEA Shopping Centres Russia malls in August, Penti, the leading Turkish fashion retailer launched in MEGA in July. US fashion retailer Forever 21 will open a flagship store in a Moscow MEGA mall in the coming months.
Other international brands already operating in Russia that have taken space or extended their leases at MEGA malls this year include Uniqlo, Lacoste, Marc Cain, Guess, Mothercare, GAS, Benetton, Dockers, Scotch & Soda and Media Markt.
A key factor for the international retailer activity in Russia is that the market is far from reaching saturation point. Retail space per 1,000 inhabitants in Russia currently stands at 327 sqm, compared with 690 sqm per 1,000 inhabitants in western Europe.
IKEA Shopping Centres Russia is investing €260 million to build MEGA Mytischi. The 215,000 sqm mall is scheduled to open in 2018, and it is estimated that it will attract 25 – 30 million visitors per year, with 4.2 million people in its surrounding catchment area. The new mall is set to host a wide range of western retailers seeking a ‘safe entry platform’ into Russia.
MEGA Mytischi’s development is part of a wider investment programme being undertaken by IKEA Shopping Centres Russia. This includes a major upgrade programme at its existing shopping centres with new food and beverage concepts and mall extensions, but it also includes plans for further new regional MEGA malls.
Armin Michaely, the general director of IKEA Shopping Centres Russia, commented: “We continue to benefit from offering western brands a familiar environment, where many of the legal and cultural barriers to entry have already been safely negotiated. Retailers appreciate that we are a respected multinational company with retail experience. Our significant investment plans also demonstrate our ambitions in Russia. MEGA Mytischi is a very exciting project, and the super-regional mall will set a benchmark for modern retailing in Russia.”
At IKEA Shopping Centres Russia’s 14 MEGA malls footfall rose by around 4 percent in financial year 2014 to more than €270 million, and has risen by 27 percent over the last five years. Tenant sales at MEGA malls have grown by 6 percent, to over €6 billion in 2014, and by 44 percent over the last five years.