Shopping Centers Russia Апрель 2022 | Page 62

Ready for rapid development?

In the past three years, retail real estate has been in a black stripe: first, multi-month covid restrictions, now many foreign brands have suspended their activities. And although so far, according to analysts, there have been no terminations of lease agreements, and the space remains with everyone who reported the suspension of work in Russia, the situation can change at any moment. The greatest “damage” to shopping centers can be caused by the departure of fashion brands, which, according to Knight Frank, occupy an average of 20%-25% of the space in high-quality shopping centers. Since 2014, according to Knight Frank estimates, about 150 European fashion brands have entered the Russian market, which is 75% of the total share of international brands entering the market.

It is not surprising that the owners of the shopping center are very concerned about this situation - due to the departure of foreign brands from the Russian market, traffic in shopping centers will fall - and are looking for ways to get out of the situation in the least painful way.

“It is unlikely that the departure of popular manufacturers of clothing, footwear and accessories will lead to the fact that shopping centers will become empty: their owners will replace European and American brands with Chinese and Turkish ones,” said Ruslan Gaisin, chairman of the board of City 78 HC. However, the expert is sure that this is not a quick process, and due to a sharp jump in the exchange rate, any imported clothing will become much more expensive, while the purchasing power of the population in the current economic situation is unlikely to grow.