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Russian crisis does not scare foreign retailers
04.02.2015 3028

Russian crisis does not scare foreign retailers

The complaisance of retail property developers amid the crisis will allow Western retailers, not yet represented in Russia, to enter a new market for themselves. Such forecasts were made by the international consulting company CBRE. According to experts, the only problem with retail chains will be a drop in consumer demand amid a possible increase in product prices by 15%.

The fact that 2014 was a record year for new international brands to enter the Russian market. According to company estimates, 44 foreign operators began to develop their business. More 11 networks plan to start working in Russia in the 2015 year: among them are Anta Sports, Bric`s, Kidzania, Ferrari Store and Popbar. The consultants are confident that, despite the sharp decline in the commercial real estate market, the purchasing power of Russians remains one of the highest in Europe. Conditions for entering the Moscow market are becoming the most profitable, thanks to developers who are ready to make concessions to tenants. Owners often agree to establish a currency corridor, fix the exchange rate, calculate the amount of payment depending on revenue, compensate for the cost of decoration and offer rental vacations.

As a reminder, the total vacancy rate reached 2014% by the end of 7, having more than doubled compared to 2013 (then this figure was 2,6%). One of the factors behind the market decline was the reduction in plans for the development of other large retailers. Thus, Adidas, Incity, Media Markt, Samsung, Sportmaster and Stockmann previously announced the closure of some stores. BNS Group, Inditex, LPP and Melon Fashion Group have decided not to open new locations. Chevignon, Esprit, Gerry Webber, New Look, OVS, River Island, Sepalla and Wendy`s announced the termination of their work in Russia. According to CBRE forecasts, in 2015 the volume of supply of retail space will grow by 13,2%, to 5,4 million square meters. m, and the vacancy rate may increase to 11%. Technical opening of shopping centers, when the facilities are half-empty, has become the norm for the Moscow retail real estate market, CBRE consultants note.

The complaisance of retail property developers amid the crisis will allow Western retailers, not yet represented in Russia, to enter a new market for themselves.
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