New malls open half-empty, Jones Lang LaSalle says

Jones Lang LaSalle came up with a report on the state of the Russian commercial estate market in the first quarter of 2010. The company says that, after a quick rise at the end of last year, the demand for the shopping areas in the Russian malls has remained the same. Moscow’s shopping malls are still more popular than the provincial ones, so the retail trade turnover went up by 2.7% in the Russian capital and only by 0.8% in the rest of Russia in January-March 2010 (compared with January-March 2009).

‘Even though retailers have been showing more interest in renting lately, the share of unoccupied shopping space in the total mall area is still the same as it was last year. In Moscow, this share comes to 10% of the mall’s shopping area on average, in Saint Petersburg the figure is 13%, and in most provincial cities it is 15% to 20%. The reason why the renting statistics does not change is that a lot of new malls are opened half-empty on a regular basis,’ the agency explains.

For one, Fan-Fan and Alatyr shopping centers got opened in Yekaterinburg last year with half of the shops still not rented.

Jones Lang LaSalle’s analysts do not believe the demand for the shopping space is going to restore quickly, so there will still be a lot of empty shops in the malls this year.

‘The fact that so many new malls get opened regularly is another risk factor. Besides, some retailers make their stores smaller and manage to keep the sales turnover the same in a moderately-sized shop,’ the analysts observe.


Other materials on the topic::