Guiding Lines: Better Late than Never

There is a lack of quality trading premises in Russia, commercial real estate experts note. According to Jones Lang LaSalle (JLL), in the country, per 1,000 people, there is 23 sq.m of shopping premises, whereas in the Czech Republic there is 176 sq.m, in Italy there is 169 sq.m, in France there is 241 sq.m, in the UK there is 258 sq.m, and in Sweden there is 405 sq.m of shops per 1,000 inhabitants.

In Moscow it’s better than the country as a whole: according to various estimations, there are between 200 and 500 sq.m of shopping premises per 1,000 inhabitants. Analysts find it difficult to give exact numbers, but the figures are clear. By JLL’s estimations, Moscow may catch up with European capitals on the prosperity of shopping centers by 2022. The average level of vacant areas at the moment is no more than 1 per cent, according to Cushman & Wakefield / Stiles & Riabokobylko (0.23 per cent in September).

But plans for the construction of shopping centers in Russia are the most large scale in Europe. Essentially, according to Cushman & Wakefield, 40 per cent of the 11.4 million sq.m of announced trading premises to enter the market in the second half of 2007-2008 will be in Russia (4.643 million sq.m). In France or the UK even 1 million sq.m is not planned. Of course, not all that has been announced will be put into operation on time or even constructed, experts show skepticism. But still, they will build a lot.

And the main thing, Vitaly Efimkin, vice president of Tashir Group, is convinced, is that modern Russian shopping and entertainment centers are advancing towards western ones. "And western experts recognize this," he adds. Tashir organized an excursion for the representatives of French company Quick (Tashir is planning to invest, together with Quick, more than 100 million euros in a chain of restaurants in Russia) to shopping centers, and according to Efimkin, they recognized that in Europe old generations of shopping centers still prevail, which, in appearance, have greater hangars and are very pragmatic, easy to build constructions without luxuries.

“We have a non-comparable level of furnishing, level of comfort, and decoration of public zones in shopping centers,” says Efimkin. “And shopping centers are big so that plenty of people can feel comfortable in them for long periods of time.” Because people spend a lot of time in shopping centers, they have become a popular form of leisure, a place for the family to relax in a country with not the best climate and not forgetting the absence of goods on free sale. What is more there are almost no other entertainment facilities - this infrastructure even in Moscow is not developed very well.

That’s where another feature of the “Russian approach” is coming from - the strong entertainment component of shopping centers. Multi-screen cinemas, entertainment centers, bowling and extensive food courts, and also the magnificent furnishing to European standards of usual hypermarkets transform the process of shopping into some kind of celebration, much to the pleasure of developers.

And it is all because, explains Efimkin, the Russian shopping real estate market started to develop relatively recently and straight away at a new level of quality. There are more modern building technologies. New shopping and entertainment centers are equipped with up-to-date equipment and are created thanks to recent progress in the shopping sphere. Besides this Russia can study the experience of other countries. On the whole, it is good that we started later.

JLL confirms that the new projects that are entering the market differ in scale, professional approach to forming a pool of tenants and the expanded spectrum of services offered to the consumer. However, the difference between quality shopping space and old poor-quality premises is striking. But international advisers usually do not even think about old shops.