‘Brands don’t want to leave our market, no matter what they say’

Expert — about the reasons for the sales of shopping centres, the adaptation of metropolitan mega-malls, and the advantages of regional facilities

Western sanctions have created difficult conditions for the operation of shopping centers in Russia: many tenants from among foreign companies have suspended their activities, in connection with which the owners of malls have suffered losses and are putting the sites up for sale. Why investors are not in a hurry to invest in shopping malls yet and what advantages regional shopping centres have over large Moscow malls — read in the author's column for Realnoe Vremya of the director for the development of regional services, co-director of CORE.XP retail department, Mikhail Rogozhin.

If there is demand, then there is supply

To date, some owners are trying to sell the object, realising that now they will have to work a lot with it. And if they don't have such a burning desire and opportunity, then they will try to sell it. But the question is that no one wants to sell cheap and buy expensive. Therefore, not all of the offers that theoretically can be put up for sale today will be implemented.

Because the price expectations of current owners are quite inflated, and those who want to buy are underestimated, they understand that they are buying a “stressful” object. Although there are objects that need to be improved a little, and they can take off later. It just needs to be done so that there is good project management, and not everyone has it. And in the case when there is no one and you don't want to do it — people are thinking about the possibility of selling.

Again, thinking about the possibility of selling and selling are two different things. As in the joke: Does Izya want to sell watches or market watches? That is, often people enter the market just to ask the price. Some are ready to sell the object, but if there is an adequate offer (in their opinion). By today's standards, it may not be quite what they expect. Of course, there is a trend towards sales of shopping centres now, but it is not comprehensive and concerns those objects that are not the simplest and probably not the newest.

Regional shopping centres are quoted better than Moscow ones

In general, the situation is about the same for the whole country. But, probably, Moscow and St. Petersburg stand apart here, because there are a considerable number of very large objects there, and there is an appropriate price tag. And there are not so many investors who are now willing to pay a lot of money even for a good object.

If we take smaller objects and regional ones, then an object with an area of 30-40 thousand is much easier now, it can be sold and, for example, then “brought to life”. Therefore, investors are looking closely at them, since the amount of money that will need to be spent is much less than for premium Moscow projects. In each city, I think there will be a certain number of objects, the current owners may want to sell them.

Another question for buyers is that it is not always clear what to do with these objects. If there is a real possibility of improvement within 1-2 years, then, of course, you need to take it if you have an understanding of how and what to do. And who exactly will do it. If we consider it simply as an investment issue, then the issue of payback may come up here.

Brands don't want to leave the Russian market

Of course, Western sanctions have affected the change in the level of rent in shopping centres, because many outlets have closed. But there is no general trend in this issue now. Everyone is trying to negotiate on payment here. After all, every owner fights for himself.

On the one hand, when you are the owner and LPP, Adidas, H&M and many other iconic stores of international brands are temporarily closed, you sit and think what to do, wait, try to negotiate. Because you want them to open up and continue working, you proceed from this. Because there is often no one to replace them. And there are those who closed only one conditional Adidas (who initially did not have a large representation of such networks), such objects felt this outcome a little easier.

As for the rent, here, on the one hand, everyone is also trying to negotiate, and on the other hand, everyone is waiting for the political destructive to weaken a little. At the same time, there is an understanding that the brands we mentioned and others like them, in principle, do not want to leave our market, because this is quite a serious share for them. Whatever they say, it's really a lot for them.

Therefore, they are either trying to negotiate with new partners from other countries or, perhaps, with some subsidiaries, in order to continue working later, as if not by themselves. Although the goods will remain theirs, you may have to play a little with the name of the brands. There is such a topic: in Moscow, the stores of Polish LPP chain have already opened, which have slightly changed their names, but are slowly resuming their activities. The same will happen with McDonald's. All the restaurants that belonged to it directly have now been sold to a certain Kemerovo businessman and are going to open, according to unverified rumours, even with the name “Mc”, with the possibility of preserving the logo letter M.

Relevance of Ikea is not going anywhere

In the current conditions, I would say to the owners of the shopping centres that you should never turn a blind eye to alternatives. Especially depending on what you have written in the contract with existing temporarily unemployed comrades. On the one hand, of course, we need to keep our eyes open and look at the opportunities that arise and will arise, because one day the Chinese, Turks, Iranians, and someone else will come. It's all moving slowly, but it's impossible to predict when it will be in large volume.

On the other hand, you don't need to lock yourself in, you need to try to negotiate. Realising that if you see the prospect, relatively speaking, of preserving some “Ikea” in your shopping centre, then, of course, it may be worth suffering a little, but only so that there is some kind of mutual benefit: you are waiting, understanding for what, what you will get for the period of downtime of these stores, and you that's fine, you're willing to wait.

Because it is difficult to find an alternative to Ikea now, maybe Hoff will come in, but it is necessarily that it will always develop in such a volume as Ikea. Or maybe it will. For example, in Kazan, we launched Hoff in Gorky Park shopping centre and it feels pretty good to this day. But nevertheless, the relevance of Ikea is not going anywhere and probably will not go away. But, again, it depends on the object. If the object is strong, then it can have more pathos and piety in a relatively peaceful struggle with brands. And if the facility is weaker, then at some point the brands themselves can pay what they owe, and then leave this facility. And you will be left with such holes that you will think for a very long time about how to patch them. And replacing Zara with Fixprice is probably not very healthy for the object as a whole.

Mikhail Rogozhin

The author's opinion may not coincide with the position of the editorial board of Realnoe Vremya.