ADG group, a Russian development company, shared its results for the first quarter of 2021. As the government in Moscow has officially lifted restrictions and started free vaccinations, brick & mortar retail in Russia is on the road to recovery after the impact of the pandemic and ADG’s chain of neighbourhood centres is poised to demonstrate strong dynamics. ADG currently operates seven centres, with a further 23 under construction. The group is actively leading the way with major trends by using efficient tools to give people the opportunity to meet, dine, access entertainment and shop in proximity to their homes in state-of-the-art public spaces by reviving the heritage of old Soviet cinemas.
Footfall is on the rise
The first quarter of 2021 was a success as restrictions were officially further relaxed in Moscow and citizens felt freer to visit public spaces such as Mesto Vstrechi (Meeting Place) neighbourhood centres. The concept of the Mesto Vstrechi chain is to provide high-quality entertainment within walking distance of residential apartment blocks located in the suburbs of Moscow in line with the general trend where people tend to use less public transport and adjust their routine so that they don’t have to leave their neighbourhood if possible.
In total, footfall grew by almost 20 percent from January to March. In some centres, such as Mesto Vstrechi Mars in the north of Moscow, it rose by 65 percent. Another neighbourhood centre, Mesto Vstrechi Vysota in the southern suburbs of the city, demonstrated outstanding results in January, a month that is typically very quiet for commercial real estate.
Grigory Pecherskiy, managing partner of ADG group said: “Vysota opened at the very end of 2020 and in the first month of the new year attracted up to 5,000 visitors daily with 5,885 sqm GLA. This works out as 0.8 people per sqm, which is comparable to such shopping mall giants on the Moscow market as Atrium (1.1 people per sqm) and Evropeyskiy (1.3 people per sqm).”
One of the biggest elements of the chain’s entertainment concept is regular events and festivals for visitors. January was still dedicated to some New Year activities; February was marked by Valentine’s Day and National Defender Day and, in March, neighbourhood centres held an entire week of festivities dedicated to Women’s Day and the Russian folklore celebration of Maslenitsa. Days like that not only help provide exciting opportunities for quality entertainment but also help generate additional footfall: on the days mentioned above, it was on average 9 percent higher than on a typical weekend.
While footfall is growing, online shopping still remains very popular because most people find it convenient. Marketplaces are developing rapidly and ADG group has become a partner of the market leaders, Ozon and Lamoda. Now locals can go to neighbourhood centres to attend exciting events and combine it with a visit to a pick-up point to collect their order.
Events themselves are also becoming omnichannel: while strict restrictions were still in place, art masterclasses were being held through Instagram Live sessions on the accounts of neighbourhood centres. Now people can physically attend them with no need to get to know the teachers all over again.
All information about events and more can be found in the Mesto Vstrechi mobile app, which is constantly adjusting to current trends and becoming more user-friendly. It is a mix of useful information, a marketplace and a personalized loyalty program that provides a smooth customer journey and helps understand people’s needs better.
Future plans and trends overview
ADG group is currently working on new openings and opportunities to collaborate with new tenants based on customer needs and feedback. Nevertheless, unlike many other real estate operators, the company will not have to adjust its concept to stay aligned with the new reality.
Experts say that today shopping centres are becoming more than shopping; they have to turn into social and cultural hubs, get closer to the customer and provide valuable services and entertainment. Neighbourhood centres have all of this in their original concept, which makes ADG group a flagship developer on the Russian market. Some other companies already follow the strategy: the Sovremennik social club recently replaced an old Soviet cinema and in coming years a multi-functional centre will open instead of the old Pravda cinema.