Money-Growing: Retail Bridge

Kuznetsky Most has some 7,000 to 8,000 square meters of retail space, according to an estimate by Natalia Dereshovskaya, a consultant for the real estate owners department at ABN-Realty. This accounts for some 3 per cent of Moscow’s entire retail space, says Mikhail Gets, the head of the commercial real estate department at Blackwood. In his opinion, Kuznetsky Most’s location is particularly inconvenient in terms of transport accessibility, which restrains the development of trade in the area.

Furthermore, unlike Moscow’s modern thoroughfares, such as Tverskaya Street, Novy Arbat, Kutuzovsky Prospekt and Leningradsky Prospekt, not all the properties in Kuznetsky Most are equally attractive. According to Colliers International’s realty experts, the street can be conditionally divided into two zones: one that stretches between Bolshaya Dmitrovka and Petrovka and another one between Petrovka and Bolshaya Lubyanka Streets.

In fact, only the upper part of the street is in high demand, adds Mikhail Gets. Rental rates on the lower stretch of Kuznetsky Most, which is less attractive to potential tenants, are relatively low, while properties in the upper part of the street are leased at rates comparable to those in Tverskaya – Moscow’s most expensive retail corridor – and range from $2,000 to $2,500 per square meter.

On balance, the average rental rate in Kuznetsky Most fluctuates between $1,500 and $2,000 per square meter per year. As regards the sale price, the situation is similar, with properties on the upper stretch of the street sold at $7,500 to 9,500 per square meter, while space in the lower part is offered from $5,000 per square meter, according to ABN-Realty.

However, properties in Kuznetsky Most rarely go on sale, which is why calculating an average rate is not an easy task, notes Dereshovskaya.

Notwithstanding the difference between the two stretches, the demand for renting space in both areas is high. “Some 3 per cent of the total space is vacant,” says Natalia Dereshovskaya. “Such a low share [of vacant properties] is comparable only to the Garden Ring area or Leningradsky Prospekt.” In the third quarter of 2004 the share of vacant space stood at 2.5 to 3 per cent, according to the ABN Realty research department. Over that period only two or three small properties were offered for rent or sale.

Small premises with window displays facing the street are most valuable for tenants and shop owners in Kuznetsky Most. Rental rates there run up to $3,500 to $4,000 per square meter per year.

A Haven for Banks and Boutiques

Kuznetsky Most is one of Moscow’s shortest retail corridors, with small properties available on the first floors of buildings. That is why most properties here are occupied by companies specializing in luxury goods and services rather than those involved in the mass consumption goods sector, says Mikhail Gets.

Kuznetsky Most tenants are, for the most part, boutiques, travel agents, air ticket offices, legal firms and notary offices. “Kuznetsky Most still bears a certain touch of provinciality,” says Natalia Dereshovskaya. “Quite often well-known brands and trademarks represented here are clearly incompatible, like for instance, Enrico Martinelli and the Pelmeshka diner or the Atlas map store.”

A wide range of leading international brands of men’s and women’s clothing including Mila Moda, BGN, Gianfranco Ferre, Versace, Enrico Martinelli, Cartier, Adidas, Amato, Pulls, Paul & Shark, Valentino, Realist, the lingerie specialists Bustier and Wild Orchid, and footwear firms Tervolina and Ekonika-Stil have retail outlets on Kuznetsky Most.

Those boutiques, according to an estimate by ABN-Realty’s Natalia Dereshovskaya, occupy approximately 55 per cent of the total volume of retail space available at Kuznetsky Most. The head offices and branches of several major banks, such as the Bank of Russia, Vneshtorgbank, Bank of Moscow, Alfa Bank, Avtobank, and the jewelry stores Smolenskiye Brillianty, Damiani, Golkonda, K. Faberge, Privilegia, and Russkaya Bronza account for about 15 per cent of the available space.

Public catering facilities of all sorts, including Kofe-Haus, Pelmeshka, Yolki-Palki, food stores (Cherkizovskiye Kolbasy, and the Kaufman wine boutique) and book shops (Dom Innostrannoi Knigi, or Foreign Book House, Knizhnaya Lavka Pisatelei, or Writers’ Bookstore, and Atlas) take up some 5 per cent of the space. Other tenants include the gift shop Podaryu, an Aeroflot ticket office, travel agencies, a drug store, an optometrist, a medical store and an internet cafe.

A Bridge Gone with the River

The street Kuznetsky Most enjoys a stable reputation as one of Moscow’s oldest retail corridors. Once, it was indeed a bustling bridge (‘most’ means ‘bridge’ in Russian) over the Neglinka River, where blacksmiths residing in the area plied their trade. In the early 19th century the Neglinka River was driven underground to run through pipes beneath the pavement, while the bridge was taken down, but the street retained the name. A.Y. Bulgakov wrote in a letter to his brother: “It is funny, what people will say: I went to Kuznetsky Most to find it is gone, like a green dog.”

The history of Kuznetsky Most Street and Sofiika that ran parallel to it begins as early as the 15th century when the Pushechny Dvor, or Cannon Courtyard, was established here, on the banks of the Neglinka. The Cannon Courtyard, erected around 1475 by the renowned architect Aristotle Fioravante, occupied a vast area; the Novgorod blacksmiths who gave the bridge its name settled in the vicinity, making up Kuznetskaya Sloboda, or blacksmiths’ district, first mentioned in historic documents dating from the 15th century.

In the beginning, local residents traded in hand-made goods, but as time went by they were joined by merchants from Moscow and abroad, and by the end of the 18th century the street became one of the most fashionable retail areas in the city. Wooden shops were later replaced with stone buildings and were leased to foreign vendors, trading mostly in headwear and toiletries.

Fashionable French shops mushroomed all along Kuznetsky Most as Catherine the Great signed a decree on privileges for foreigners, and French traders flooded into Kuznetsky Most. In the times of Catherine the Great people used “to go to the French shops”, which meant going shopping at Moscow’s most fashionable shops along Kuznetsky Most.

Yet, Kuznetsky Most also offered a different sort of entertainment. Only a century ago high-society ladies wearing fashionable hats and silk gowns and richly dressed gentlemen could be seen here sweeping the pavements, having been arrested by the city police for breaching public order or for immoderate alcohol consumption. The high-society street cleaning ladies were followed closely by their admirers carrying candy and flowers.

The ‘retail concept’ of Kuznetsky Most changed for a while in the wake of the war against Napoleon. Moscow’s commander in chief Count Rastopchin eliminated the French settlement in Kuznetsky Most. Yet, the French guard fought valiantly to protect the property of their compatriots, and the French shops suffered no damage in the great fire of 1812.

The French merchants returned to Kuznetsky Most after the war was over. They were joined by Englishmen, Germans and Italians and trade flourished anew. As far back as the 19th century contemporaries could not help but wondering about the mystery of Kuznetsky, namely how could such an inconvenient street, on a rather steep hill, become the most fashionable retail spot of Moscow?

Moscow’s House of Artists

Every day thousands of people walk along Kuznetsky Most, past houses that have seen centuries of Moscow and Russian history. The Moscow House of Artists is one such keeper of the people’s memories.

In 1883 a new store was built at 11, Kuznetsky Most. The building belonged to the famous French industrialist and owner of an iron foundry F.F. San Galli.

The structure comprised two one-storey stonework buildings joined by a cast-iron vault. During World War I the Black-Hundreds looted local foreign shops and the building was deserted. In the summer of 1917 the estate came to the attention of the famous Moscow baker Filippov, who moved to turn it into a luxurious cafe. Artist Georgy Yakulov won the bid to decorate the outlet. Many other Moscow artists took part in the project.

The artist Aleksandr Rodchenko designed some remarkable lamps – complicated structures made of tin – for the cafe, while Vladimir Tatlin painted the glass ceiling. As a result, the building of what initially had been a somewhat industrial design was completely transformed. Pittoresk Cafe opened in January 1918. Vladimir Mayakovsky, David Burlyuk, Vassily Kamensky performed their poetry at the opening ceremony and futurists frequented Pittoresk where they held regular poetry readings.

In autumn of 1918 the theatre directorate of Narkompros – the People's Commissariat for Public Education – took over the building and transformed it into a ‘club & studio’, giving it the new, somewhat frightening and ‘revolutionary’ name of Krasny Petukh, or Red Cock.

However, by the times of NEP – Lenin’s new economic policy course – trade once again flourished under the glazed ceiling. From the early 1930s to the present day the house on Kuznetsky belonged to artists. At first it was occupied by the famous KOOP Vsekokhudozhnik – the All-Russian Cooperative of Artists – that existed till 1953. The cooperative provided artists with canvases and paint, advances and subsidies, bought their works and sent them on artistic assignments to other cities. After Vsekokhudozhnik was closed down the building was inherited by the Moscow House of Artists.

The Moscow House of Artists underwent barbarous “reconstruction” in the 1960s. In 2001 the historic appearance of the building was restored on the basis of extant 19th century drawings. Today the House of Artists includes exhibition grounds, a fair, the Dzhagannat restaurant, a gift shop, and an art salon for designers.

Changing Profile

The Kuznetsky Most retail corridor has good development prospects, holds Mikhail Gets. But the problem with many buildings situated in the area is that they are co-owned by several entities, often with varying terms of legal status.

Quite often a title to a property inside a building is held by the federal government, while other properties belong to the municipality and private individuals. With so many owners in place transforming a building into a top-class piece of real estate is impossible, making it less attractive to potential tenants and buyers.

ABN-Realty analysts believe that the development of Kuznetsky Most is impossible without overhauling the existing facilities, as many of the local buildings are rather dilapidated and their facades badly need a facelift. In the near future several buildings in Kuznetsky Most will undergo renovation, says Gets. A new shopping center will be built on the square in front of TsUM, the Central Department Store. Another retail center, of 6,000sqm, is to open at 16, Kuznetsky Most, after the building is renovated.

The building at 13, Kuznetsky Most, too, is currently being renovated. After the work is completed the first floor of the building will be occupied by retail outlets.

Historic Landmarks Lost

As old historic buildings are forced by modern merchants to change their appearance and to adjust to the fashion of retail and public catering formats, some astonishing transformations take place. Sometimes, the stories behind the changes are amusing, but in most cases they are sad.

Quite an amusing transformation befell a cellar situated at the intersection of Kuznetsky Most and Neglinnaya Street. Throughout the 20th century the basement was officially used as a public lavatory. But in the late 1990s the toilet was closed and transformed into…a restaurant bearing the proud name of Cyrano, which to some Muscovites sounded vaguely like a slang word denoting defecation.

There have also been other anecdotes regarding the restoration of historic mansions on Kuznetsky Most. For the most part, those projects were implemented by the most barbarous and effective means of ‘restoration’ – that is, demolition.

An example of such a ‘reconstruction’ is the office and retail center at 17, Kuznetsky Most. Incidentally, the building was re-painted several times. Rumor has it that the color initially used for the building was not to the liking of Mayor Yuri Luzhkov.

17, Kuznetsky Most is a historic and cultural monument to the 18th century. Decree by the RSFSR Council of Ministers No.624 of 1974 included that ensemble in the list of historical and cultural monuments of the Russian Federation. In autumn 1993 the prefecture of the Central Administrative Okrug [District] of Moscow signed a deal for the reconstruction of the complex, transforming it into a residential estate. But while the project was still ‘in the offing’, the investor’s appetite grew. As a result, four buildings of the complex were demolished. Instead of the residential estate the complex now includes a brand new office and shopping center that serve as a rare example of “a modern retail format”, according to realtors.

In the 18th century the infamous Saltychikha, who gained notoriety for her ruthless treatment of her serfs, owned an enormous mansion on Kuznetsky Most. Saltychikha tortured nearly 150 serfs to death before she was tried and imprisoned at the Ivanovo Convent. After 1768 the building, stained with the blood of Russian peasants, was owned by two prominent Moscow doctors – F.P. Gaaz, and, subsequently, Zakharyin.