The beauty segment is bound to increase, some experts insist, so we must pay attention to this trend already now. Ekaterina Sizanova, a chief analyst of CBRE Market Research, says that among the budding formats of beauty industry operators today are locations inside business centres, gated communities, multi-purpose residential complexes as well as neighborhood shopping centers.
We must also add that community shopping centers have the most potential for such operators. Owners of next-door shopping centers have been trying to reduce the amount of fashion retail outlets to the minimum and stock their centers up with catering, entertainment and services. As for beauty operators, such centers are of a high interest for them too as they would have a constant flow of local residents unwilling to commute for a service to a different part of town. However, they will need help with changing their habits to receive all the beauty services in a shopping center just around the corner. The post-lockdown period showed that small neighbourhood shopping centers got back to work and are recovering faster than bigger ones, so those operators who had been avoiding such locations might now get interested in moving in. Even now, when officially there is no lockdown, while many people are nearly forcibly working from home, it is easier to get your nails done in a closest beauty salon rather than travel somewhere else.
There is an opposite opinion as well. Anastasia Egorova, Chief of Brokerage in Property Mangement Department, Colliers International, warns she does not see any future for a soaring development of beauty segment in shopping centers. “At the moment, there are no factors for an increase in this segment in shopping centers.
As this is a low-margin business, such operators are just an add-on to the main pool of tenants and services”, says the expert. She adds that a lot depends on the location and the profile of the customers. “For business customers, such services will be in high demand, while for a neighborhood shopping center, the demand is unlikely to be as high because such segment prefers street retail locations in residential sector, apartment blocks, for example”, she adds.
Where beauty lives
According to the statistics of CBRE, a typical area for a service operator is 150-350 sq. m.. “As a rule, service operators are not picky about the location and traffic compared to fashion operators, which allows owners to maximize all floor space, including the most hidden areas of their shopping centers,” comments Ekaterina Sizanova.
On the other hand, not all areas are suitable for beauty services as they lack water and sewage at the very least. “This infrastructure is usually planned for at the design stage, otherwise water supply is arranged by the tenant and requires an additional investment”, explains Anastasia Egorova. Islands do not need water supply as they offer hardware manicure, which does not require water, yet there are islands with taps. In some neighborhood shopping centers, nail technicians bring water from the restroom, yet this is what you should not really do.
The pandemic, which we have been facing this year, may surprisingly lead to some operators, providing they are generally ready, increasing their floor space. “Due to the limitations set by the Russian Agency for Health and Human Rights, the requirements for operations in shopping centers have changed. Social distancing for work stations is one of the reasons pushing many operators to expand and rent bigger areas to reach the pre-crisis turnover. It will definitely affect the financial results, yet it is worth noting that the demand in this segment is as high as it was before,” explains Irina Kozina, Head of Street Retail, Knight Frank.