Six new shopping centres to be delivered in Moscow by the end of 2016
CBRE has summarized H1 2016 results for the Moscow Retail market. According to the report, on the back of new shopping centres completions, average vacancy rate is to increase from the current 9.3 percent to 11.1 percent by the end of the year.
Six new shopping centres are expected to be opened by the end of the year. Five of them have a high probability of opening in Q3 2016, including the 2nd phase of Metropolis, Oceania, Khorosho, Butovo Mall and the 2nd phase of Fashion House Outlet. Total rentable area of these new projects is about 300,000 sqm. By the end of the year, the shopping centres completion in Moscow may reach about 400,000 sqm.
Taking into account the dynamics of occupancy level in Moscow Region, when new retail projects are opened with 40-50 percent vacancy, average vacancy rate is to increase from 9.3 percent in Q2 2016 to 11.1 percent by the end of the year.
In H1 2016 the retailer activity remained high. None of the brands left the Moscow market in Q2 2016. 20 new retail chains entered the Moscow market in H1 2016. 15 of them opened first stores in shopping centres. Another 18 new brands announced their plans to enter the market during 2016. Among them are Walt Disney, Presse Café, Lillapois, Cortefiel, and others.
Olesya Dzuba, Director of Research Department CBRE in Russia, said: “On the back of oil price stabilization and rouble strengthening over the last few months, shopping centres have recorded footfall increases. Nevertheless, the conversion rate of visitor to real purchases is still low, limiting the pace of retailer sales growth. This in turn translates into rental rates, which are almost 100 percent linked to retail sales. Thus, rental rates depend on consumer purchasing power, and their recovery may only start following income growth of the population.”