Money-growing: Stealing Ice

But access to indoor skating facilities is restricted for amateur skaters. Developers have already noticed that and launched skating rinks on the premises of several shopping and leisure centers, thus giving those projects an edge over rivals. But the only solution to the problem of an acute shortage of covered skating rinks in Moscow is construction of sports and leisure facilities on commercial basis.

Leftover Principle

Indoor ice rinks in Moscow operate either as freestanding facilities (Ice Palace Rus’ and covered skating rink Sozvezdiye, and others) or as part of sports complexes run by Moscow’s sports clubs. Ice palaces are provided on the premises of sports clubs CSKA, Lokomotiv, Krylya Sovetov, etc. Covered rinks are also available in local sports complexes operating in certain communities and districts across the city (ice palaces Mariino, Novokosinsky, Domodedovo, etc).

In total there are over 30 covered ice skating facilities operating in Moscow. But all of those were raised as training venues, not for the purposes of leisure and recreation; they house sports schools for figure skaters and hockey players. Sites for public skating were available chiefly in city parks and in open-air stadiums where football pitches were traditionally covered with ice each winter.

In the wake of transition to a market economy, operators of most sports facilities were forced to revise their policies and open their rinks for rank-and-file skaters. But opening hours are restricted there and amateurs are granted access onto the ice only when no training sessions or competitions are scheduled.

The city’s most prestigious ice skating facility is to be found in the indoor skating center Krylatskoye. The state-of-the-art covered rink is built in observance of high modern standards both in terms of size and quality of ice making equipment. The total area of the ice arena is 37,000sqm including the 12,000sqm rink. The complex provides warm spaces featuring relaxation rooms and shoe lockers. On weekends, when attendance soars, cafes and skate rentals are open on the premises, music videos are shown on large screens installed over the rink and music plays. Each session is two hours long. The final session begins at 19-00 and ends at 21-00.

A skating rink in the sports complex Kristall on Luzhnetskaya Naberezhnaya (Embankment) is open for the public on weekdays from 10-00 till 14-00. The building provides lockers, a canteen, skate rentals; on the days of public skating a disco is held. The Sokolniki Ice Palace on Sokolnichesky Val Street opens its doors for skating fans on Fridays, Saturdays and Sundays from 20-00 to 24-00. The operator organizes various shows and contests on ice. The palace features a bar and skating equipment rentals.

Sozvezdiye skating rink on Golubinskaya Street is open for amateur skaters on Sundays, between 18-00 and 19-00. Rus on Voronezhskaya Street is open on Fridays, Saturdays and Sundays, but only for an hour, from 21-30 to 22-30. The ice palace Yuzhny (Bulatnikovskaya Str.) is open for public skating on Saturday and Sunday, from 19-30 to 21-00; Novokosinsky (Starostin Str.) welcomes skating fans on weekend mornings, from 9-00 to 10-00. The ice rink Olimpiisky near the Prospekt Mira metro station is open for public skating for one hour on Saturday from 18-45 to 19-45 and for two hours on Sunday, starting at 17-00. A canteen and a checkroom are open on the premises, but no skate hire is available.

Night skating sessions are offered by the sports palace Krylya Sovetov on Tolbukhin Street and Medvedkovo ice palace on Zapovednaya Street. At visitors’ service is a bar, joyful music plays and variety shows are organized. The covered rink Izmailovo on Sirenevy Boulevard is also known for night sessions on Friday and Saturday evenings. Skate rentals are open and discos are organized.

Magnetic Ice

Mall developers have come to appreciate the public’s interest in staking. Multiplex theaters, bowling alleys and slot-machines are gradually losing their appeal and retail property consultants are forced to look for new solutions. Ice rinks have proved to be a lucky find.

Sergei Khramov, development director at 4RentEstate, says that mall skating rinks are still rare but the situation is likely to change soon. Andrei Zhamkin, senior commercial real estate consultant at Blackwood, has reported that skating rinks operate in two Mega malls (Mega Khimki and Mega Tyoply Stan), Gorod at 2 Ryazansky Prospekt, Waypark at 71st km of MKAD (outside the road between Volokolamskoye Shosse and Svobody Street) and Waymart (26th km of Kashirskoye Highway).

But while Mega and Gorod use natural ice other retail complexes operate artificial plastic rinks. Irina Kirsanova, head of marketing and consulting at Astera Oncor, explains that a skating facility requires large spaces. The entire facility providing the rink proper and checkrooms measures 500 to 1,000sqm. Spaces that large are available only at very large malls. In Russia, ice rinks operate in malls measuring at least 65,000sqm. Astera Oncor reports that including an ice rink in a retail project is appropriate as long as it is rated as a property catering to the population of an entire district or province (i.e. as being of district or regional significance) in line with international classification of retail centers. Creating a skating facility in a shopping center that measures less than 15,000sqm is not worthwhile, as the monthly cost of maintenance of the rink stands at $10,000 on average. As those expenses are assumed by the landlord he must brace for a much longer payback on his investment.

During the work on the concept of the future shopping and leisure complex attention is attached to the number and mix of anchor tenants. Property experts’ experience shows that where anchors hold leases to over 40% of space, the project may fail to handle the load and will pay back longer.

Yuri Mereminsky, head of consulting at Penny Lane Realty, says that building an ice rink in a retail complex involves design and installation of sophisticated engineering systems; therefore the decision should be made in the early stages of the project when working on the concept of the future development, before design works begin. Sergei Khramov notes that shopping and leisure complexes as such are energy-intensive projects, whereas with an ice skating facility in place the mall’s energy requirements grow even further. Hence, the fate of the project hinges not only on the concept but also on availability of sufficient power capacity to ensure normal operation of the mall.

Less costly option is an artificial (plastic) ice rink as then there is no need to control the temperature regime of the skating surface. Irina Kirsanova says such rinks may be installed in shopping centers measuring 15,000 to 30,000sqm. A skating facility with checkrooms requires a space of 250 to 700sqm. Besides, maintenance costs for such rinks are lower. If needed it may be dismantled and redesigned as a shopping area.

“If we proceed from the landlord’s objective of maximizing rental revenues from each square meter of retail space, an ice rink -- unlike shops -- does not bring any income to the mall owner,” says Olga Yasko, head of retail real estate analysis at Colliers International. “Nevertheless, when developing a concept for a professional shopping center our experts view an ice rink as a feature that helps to boost customer loyalty and shape the image of the complex as a family-oriented venue. Boosting popularity and, consequently, attendance of the shopping centers helps to increase sales in shopping arcades and has a positive impact on rental revenues.”

Ice rinks for public skating are planned in several shopping centers currently under construction or on drawing boards. Andrei Zhamkin, cites the future mall Mega Belaya Dacha as an example. The project features a theme park and an ice rink. Sergei Khramov has mentioned the shopping and leisure center River Mall (on the site formerly occupied by the Likhachev car plant), slated to open in 2008.

“Whether the indoor rink is included in the future retail and entertainment complex or not depends on the concept of the project and many other factors that require thorough examination in each case,” Yanis Zhukov, head of commercial real estate at RIGroup, agrees. “Top quality leisure facilities, which include ice rinks, shape permanent buyer flows, which are of advantage to any mall.”

But then there is another side of the matter although of course it is hardly of any interest to consumers. Experts say that a mall providing a skating facility pays back much longer. “The cost of building and promoting the rink is quite high and while a bowling alley pays back in 4 to 5 years on average, the payback on “ice” is two to three years longer,” says Sergei Khramov.

Skating Charges

Public access to skating rinks operating within sports complexes is not free of charge. For example for a 60-minute skating session at the indoor rink Sozvezdiye an adult is charged 75 rubles, a children’s ticket costs 40 rubles.

The ice palace Yuzhny charges adults and children 100 and 70 rubles respectively for 90 minute of skating. A ticket to the Krylatskoye ice rink costs 200 rubles for adults and 100 for children aged 7 to 14. Children below 7 skate free of charge. The session lasts 2 hours. A four hour session of skating in the ice palace Sokolniki costs 350 rubles, tickets for children under 7 are free. A 45-minute ticket in Khrustalny is 110 rubles for adult skaters and 60 rubles for kids; Rus charges 100 and 60 rubles respectively.

Tickets at Medvedkovo where the rink is open for public skating from 23-00 to 5-00 are sold for 250 rubles for adult visitors and 200 for schoolchildren. Interestingly, kids under 7 skate free of charge in night hours. Not all shopping malls charge their visitors for skating. At appointed hours experienced figure skating instructors hold training sessions for children and curling master classes for everyone who is interested. An ice rink at the Gorod retail center is used as a venue for children’s hockey competitions and a training site for young players for Moscow hockey clubs.

The Ice of the Future

The plan for construction of new sports arenas and installations is included in the general program for development and placement of physical culture and sports installations in the city of Moscow till 2010. Construction of indoor skating facilities is also on the agenda. Sports installations providing ice rinks are planned in Zhulebino, Strogino, Kurkino and other parts of the city.

One of the most ambitious projects -- Dinamo Ice Palace -- has been raised on the territory of a residential compound Grand Park. The sports facility, planned as part of public amenities in the area, will host competitions and ice skating shows. The rink will be open for public skating for several hours per day. The 45,000sqm complex has a seating capacity of 14,000, Alexander Yumashev, head of new construction department at Miel Nedvizhimost, has reported. The 60x30 ice arena will form the core of the palace which will provide training halls, relaxation rooms and cafes. The palace will operate as a multifunctional urban sports complex.

Two investors took part in the project. The sports organization MGO Dinamo has put up 509 million for construction of the palace, whereas the city hall’s department for economic policy and development allocated 1,145 billion rubles. The general contractor is Monarkh Concern. The sports complex was launched in Sept. 2006, on the eve of the Day of the City celebrations. The skating rink has been covered with ice and is ready to for training sessions.

Considering the high cost of construction of indoor skating rinks some of those planned in Moscow are artificial ice facilities, which are quick and easy to install and whose installation costs 200 million rubles on average. For example, in South Administrative District of Moscow alone two such facilities are now planned. One of those is to open on Chertanovskaya Street, another is to appear on Kashirskoye Shosse (highway). Each property will measure approximately 4,000sqm.

Indoor artificial ice rinks are also planned as part of several sports and fitness complexes. A 3,000sqm rink is to be built on the premises of the sports center Atlant (Kosmodemianskys Str.) Indoor rinks measuring 2,500sqm each are planned on Festivalnaya and Susanin streets.

Operators planning skating projects face two major obstacles. To begin with, it is hard to find an investor for the scheme, secondly, to secure a building site suitable for the development. A vivid example is Irina Rodnina Ice Palace, which has been on the list of planned projects for more than five years now. At first, the authors of the project could not raise investment for the development; up to now the city hall still has not decided which plot to allocate for the purpose.

Warded off by lengthy paybacks private investors are not eager to spend their money on “ice” and opt for construction of shops or offices instead. It may take years to find a developer, and meanwhile the plot originally designated for a skating facility will most likely be used to build a commercial property that will pay back much sooner.

Everything Will Work Out in Freestyle

While sports installations are of little interest to private investors, mixed-use complexes featuring a variety of leisure facilities is the format already successfully tested in many countries worldwide. Examples of large projects featuring skiing and skating facilities are available in Spain and the UAE. Especially popular are indoor ski slopes, that are open all year round. MT Development reports that there are a total of nearly 50 indoor alpine ski centers across the globe, 20 more are to be launched in near future.

None of the Moscow developers has undertaken such projects yet. Analysts say that is because they are complicated and costly, and local builders have no experience in the field. But in 2005 two major projects were announced one after another. The building company GK SU-155 is set to develop what is to become Russia’s first all-year-round ski resort, worth $100 million. Investors are SU-155 and the Regional Financial Building Company. The 8-ha site has been allotted for the purpose in the countryside town of Krasnogrosk near Pavshino floodplains. The developer plans construction of a ski zone 97 meters high, with a 400-meter run, 60 meters in width. The resort will also feature a large ice rink, equipment rentals, ski equipment shop, numerous cafes and restaurants. The complex is slated to be commissioned in August 2007.

The second project titled Freestyle Park is to become the largest freestanding leisure center in Europe with ski runs, ice rinks and other sports and leisure facilities, to be built by MT Development on a territory measuring 11 ha, 1.5 km from the Moscow outer ring road on Kiyevskoye Shosse, and at a distance of only 3.5 km from the Yugo-Zapadnaya metro train station. The project measuring a total of 180,000sqm and worth $150 million is designed by ABD Limited.

The complex will feature several theme zones including skiing facilities, shops, offices, hotel rooms and apartments. The ski zone measuring 36,000sqm will house a main slope 650 meters long and 70 meters wide, a training slope, a snowboard run (fun park), a children’s playground, a 1,000sqm ice rink, bobsleigh runs, ski rentals, the restaurant Alpine Chalet, bars and fast food stores. The amusement zone will provide a 74,000sqm multiplex theater, children’s entertainment zone, bowling alleys, go-carting and rock climbing facilities, and a sports bar, as well as a water park with a wellness center, saunas and bathhouses and a fitness bar. The 10,000sqm hotel and business center will provide 200 rooms, a conference hall and a restaurant. The retail zone, measuring 15,000sqm, will include a sports good stores and shopping arcades. Freestyle Park will also comprise 100 apartments measuring 50 to 70sqm, available for sale today for $4,000 per 1sqm. The parking capacity in Freestyle Park is 2,600.

Alexander Timofeyev, general director at MT Development, says that the project is currently on the drawing board and bank loans are being raised. Construction of the theme park will begin in the second half of 2007; the entire complex is to be finalized by mid-2009.