Businesses and Marketplaces Are Shifting to Specific Regions
The Gist of Retail Boom in Russian Regions
Last year, a whopping 32.5 million square meters of retail space was leased nationwide. That's some serious expansion! But let's focus on the regions–minus Moscow, St. Petersburg, and their surrounding areas–where 19 fresh retail spaces covering approximately 220,000 sq. m emerged, marking a 34% surge compared to 2022.
Since 2017, this regional retail expansion has been a bit of a rollercoaster ride. The year 2021 saw a unique spike, with 516,000 sq. m of retail space commissioned–the only time this number has topped half a million since 2017. Other years have seen figures ranging between 160,000 sq. m and 479,000 sq. m.
By 2024, we're looking at the delivery of 24 shopping centers. Yekaterinburg, with the opening of the super-regional "Golden" mall (137,900 sq. m) and the micro-regional Enter (3,600 sq. m), will likely witness the most retail action.
Russian retailers are steering their gaze towards regional markets, aiming to diversify their presence and dodge the risks associated with prominent city concentration. Yevgeniya Khakberdieva, the regional director of the trade real estate department at NF Group, highlights the regions' allure with less competition compared to megacities and high potential for consumer demand growth.
The retail real estate market in 2022 showed a record volume of vacant space due to operational suspensions and international brands leaving the scene. However, things have stabilized in 2023. The majority of the space vacated by foreign brands has been snapped up by domestic retailers like Melon Fashion Group, Lime, Stockmann, Snow Queen, Gloria Jeans, and Sela. Additionally, wellness operators such as DDX Fitness network and Termoland have expressed their interest in the regional market.
As per Yevgeniya Khakberdieva, the market of shopping centers in the regions displayed more stable growth compared to Moscow markets in 2023. The regions' main advantage, she adds, is that they host fewer large international retailers, making their absence from Russia less noticeable.
Retail Real Estate Insights
Despite the excitement surrounding the retail boom in Russian regions, specific data on growth from 2017 to 2024 and planned shopping center projects by 2024 remains scarce. Information mainly revolves around retail and commercial real estate developers and their activities, focusing primarily on residential apartment development rather than retail or commercial spaces.
To unearth precise figures on retail space growth and planned shopping center projects in Russian regions, datasets on retail real estate development, commercial construction statistics, or industry reports from Russian real estate analysts or commercial property firms would prove beneficial. For a broader perspective on the retail real estate market in Russia, feel free to ask!
- The boost in retail space leasing in Russian regions, with a 34% surge in 2023 compared to 2022, indicates an investment opportunity in the retail real estate sector.
- The regions, with less competition and high potential for consumer demand growth, are attracting domestic retailers such as Melon Fashion Group, Lime, Stockmann, Snow Queen, Gloria Jeans, and Sela, indicating a shift in business focus towards regional markets.
- In the realm of finance, analyzing datasets on retail real estate development, commercial construction statistics, or industry reports from Russian real estate analysts or commercial property firms could provide valuable insights into the growth of retail space and planned shopping center projects in Russian regions.
