According to the plans of the Moscow Government, 255 Interchange Hubs (IHs) of two types will be completed in Moscow by 2020: one-level IHs – park and ride type; multi-level IHs with such additional services as waiting rooms, retail, food and beverage, etc.
Based on the company’s global experience CBRE defined three criteria for assessment of IHs in terms of their attractiveness for further retail development: 1) size of passenger flows; 2) amount and types of public transport; 3) existing shopping malls in close proximity to an IH. CBRE divided all the large-scale Moscow IHs into the three possible models of development in terms of the commercial real estate that exist around the world: 1) IHs inside the building, 2) IHs at stations on the Moscow Railway Ring and 3) at metro stations with high passenger flows. As a result of this division CBRE defined the leader in each of the group, these are IHs on Komsomolskaya, Tekstilshiki and Schelkovskaya respectively.
Apart from the three models mentioned above there is also a model of IH in the metro station. But it is very important to understand that at underground stations with a passenger flow of less than 50,000 people a day it is sufficient to have a limited retail offer. CBRE gives London underground as an example of this model of IH. Retail is represented mostly in a kiosk format, generally, located near ticket offices and in crosswalks. The typical size of a kiosk is 7-12 sqm. Kiosks near the station are usually around 30-50 sqm.
However, minimarket formats with space of around 100 sqm is also very common. It should be noted that London’s government plan to attract some major chain retailers to underground stations and implement new technologies based on online shopping (for example, to enable customers to pick up shopping ordered online from underground stations). According to the research London government there are plans to increase the presence of chain retailers such as WH Smith, Caffè Nero, John Lewis, and Tesco (this is to be done by offering special commercial terms).
Special attention is paid in the research to the share of retail space in the total IH project as well as tenant mix, both indicators reflect total passenger flow.
In ‘strong’ IHs that includes 3-5 types of public transport in addition to railway (bus, metro or tram, suburban trains, shuttles to the airport, etc.) the retail element is twice as large as IHs that include 1 or 2 types of public transport. The proportion of retail space in the project may be from 7 percent to 20-30 percent.
In ‘strong’ IHs the number of the shops is usually 1.5 – 2 times more than in the weak ones.
In terms of tenant mix the majority of IHs consist of cafes and restaurants (30-40 percent), around 20 percent of IH tenants are pharmacies, newspaper and magazines stands, book-kiosks and other mass-market merchandise. The share of fashion and shoe stores is growing together with the development of IHs. It may reach 20-25 percent of the total number of stores in IH.
Maxim Palt, Analyst, Research Department in CBRE, Russia, said: “Competition in Moscow’s retail property market increases steadily. As a result, the task of finding a proper location for a new shopping mall becomes more and more complicated. According to global practice, interchange hubs (IH) are often provide attractive opportunities for retail development, aiming to serve larger passengers flows. Depending on the type of IH, the retail part can follow one of three models: development within the railway station itself (Birmingham, UK, case), complex urban development (King’s Cross and St. Pancras districts of London), or development inside an interchange hub (South Kensington station in London). The last one is the most widespread. Moscow’s government can reduce public investment in improvement of the transportation system via creation of favourable conditions for interested investors.”