Shopping Centers Russia Февраль 2023 | Page 67

«Sold at the cap rate of 7, multiplier of 14. In other words, when the net operating income is cleared from utilities, net operating income and the rest is multiplied by 14. On average, in retail real estate transactions, when dealing with Net stream, we multiply the flow by from 9 to 11» explains Belavin.

«If you take smaller and obscure objects, there is a clear desire to sell them as soon as possible. Due to the closure of foreign brands because of the sanctions, shopping mall attendance declined rapidly. Nikoliers analysts have calculated that there are up to 30% «on hold» foreign retailers in the capital’s trade facilities. On top of that, people’s incomes have fallen. Taxes are the biggest expense for shopping centres, transaction costs and loan payments remain. More often, shopping malls are built on credit, which is why many shopping malls now are on the verge of bankruptcy or pre-bankruptcy» says Margarita Forbes.

According to her, in 2023, many objects can be bought profitably from bankruptcy trading. In general, there is an interest from buyers in commercial real estate. Yet investors need more time to make decisions, as sanctions made it difficult to build any development strategy for shopping malls.

Experts believe that investing in shopping malls is the best strategy with a payback period of 7 to 9 years. Keep in mind that you are definitely taking a risk in this case.