Elena Stryukova: ‘The share of Russian players in the structure of shopping centre tenants will continue to grow’
What transformation the retail real estate market is going through in Kazan
In the coming years, multifunctional facilities of new formats with a diverse range of categories, including catering, wellness industry, entertainment and recreation, are going to appear on the Kazan retail real estate market. According to Elena Stryukova, managing partner of Perfect RED and representative of the Russian Guild of Managers and Developers in Tatarstan, this trend towards “reassembling” the functions of shopping centres is due to the popularity of online shopping and the shift in consumer interests towards getting emotions. So far, despite the stabilisation of traffic, the city's shopping centres have not returned to their 2019 values. The expert talks in more detail about tenant rotation, brand replacement and new projects in the author's column for Realnoe Vremya.
Commercial real estate: market indicators
Aggregate supply in the segment of shopping centres is represented by 24 objects with a total area of 1,17 million square metres. There are eight high-quality shopping centres in Kazan, including the Community ART Centre, which opened the year. The total area of high-quality facilities is 575,000 square metres, the leased area is 348,000 square metres.
Footfall in shopping centres has stabilised. Over the past two years, it has been at about the same level. However, people's purchasing habits are changing, so we should not expect a return to the indicators of 2019.
The decrease in vacant space, the replacement of brands, and the rotation of tenants stabilised the traffic in shopping centres, although they did not ensure a return to the values of 2019. The popularity of online shopping and the shift of consumer interests towards receiving emotions stimulate the “reassembly” of functions in shopping and entertainment centres. In our opinion, in the coming years, multifunctional facilities of new formats will appear with a diverse range of categories, including catering, wellness industry, entertainment and recreation.
To assess the positions of various categories of tenants, we compared the average unit turnover in rubles (per 1 sq. m.) for the 12 months of this year with the same period in 2023. The indicators of the fashion and fast food categories showed a drop in comparison with the indicators of 2023. They amounted to -2% and -3%, respectively. At the same time, the share of turnover among tenants in the “products” category increased by 21% compared to last year. The changes in the fashion industry, in our opinion, are related to the traditional price increases and the increasing popularity of online shopping.
Vacancy rates and rental rates
The vacancy rate in high-quality facilities throughout 2024 remained at the level of 13%-15%. At the end of the year, the vacancy rate decreased to 7% due to the opening of the Megamarket marketplace in Mega. The replacement of international operators is being completed in Kazan shopping centres, which has led to the rotation of current tenants and the updating of concepts of existing stores.
The replacement of international operators is coming to an end in Kazan shopping centres. Thus, 78 new stores were opened in 2024 (not counting the openings in the new ART Community Centre). The opening rate is slightly lower than in 2023 (90 new stores).
Key market news
- In the first quarter of 2024, it became known about a major deal between Megamarket and Gazprombank, the new owner of Mega shopping centres. The marketplace plans to lease the entire free space of IKEA stores in 11 regions of Russia. A warehouse has already been opened in Kazan, and it is functioning.
- In the Innopolis of the Verkhneuslonsky municipal district of the Republic of Tatarstan, it was planned to build a shopping and entertainment centre on the territory of the residential complex. Currently, the concept is being developed, according to preliminary plans, a cinema and a sports complex will be located in the building.
- In the third quarter, the ART Community Centre was put into operation, which includes retail spaces and a food hall. The facility has been added to the list of high-quality shopping centres in the city. One of the anchor tenants of the ART Centre is SPAR, which opened on December 19. The shopping centre also features tenants exclusive to the city: a family-run halal restaurant called Eniem from the creators of Olio, the EZYMILS health food cafe, as well as new formats from Medina and NUMI.
Reconstructions
- The reconstruction of the Koltso shopping centre has begun. So far, only interior works are underway. Respublika, Savinovo and XL shopping centres are also being prepared for renovation.
- The interior renovation works of the Moscow Market are in their final stages. The building is scheduled to open in the second quarter of 2025.
- Сhanges await the Chekhovsky market as well. The Kazan City Development Institute presented renderings of the external changes and reconstruction of the facility.
Outlook
- A decrease in the pace and volume of construction of large-format shopping centres, based on the investment attractiveness of small retail real estate formats.
- Maintaining demand for commercial premises in residential complexes with an active increase in cost.
- The share of Russian players in the structure of tenants of shopping centres will continue to grow. Due to the gradual increase in rental rates, the rotation of current tenants and the renewal of store concepts opened 5-10 years ago will continue.
- The indexation of rental rates is higher than stipulated by the indexation agreements against the background of rising costs and an increase in cadastral value.