Despite the accelerated transition of a certain part of retail to online, the threat does not hang over shopping centers. Offline and online still exist in harmony, and market participants are confident that this situation will continue. Physical stores will become a hub for customer experience and a showcase for brand strengths.
“This year has proved the main thing - that offline shopping is not only not going anywhere, but is gradually moving to a different weight category. It's not just that shopping centers are a place for meetings, communication and, of course, shopping. By the way, this transformation in the retail real estate market began long before the pandemic. But today, successful malls play on the field of customer experience, and online will not be able to replace it in the coming years also because the value of simple human communication has only grown in a pandemic,” comments Alina Strelkova, Director of Commerce and Development at Mall Management Group.
The streets are still empty
The street retail segment continues to be negatively impacted by the coronavirus crisis. The share of vacant space has remained at a high level since mid-2020; about 16% of square meters are vacant in Moscow. The growth of vacancies is largely due to the closure of operators focused on tourist traffic and brick-and-mortar retailers, as well as the bank optimization program, explains Yulia Nazarova, head of street retail at CBRE in Moscow. At the same time, according to her, a significant part of the vacant premises today are "systemically unclaimed", that is, they are offered on the market for more than 12 months, which greatly exceeds the average exposure period.
In addition, there has been an increase in the total number of premises. This is due to the tendency of dividing large rooms into smaller ones, both by dividing into separate lots and by forming sections within one room. Several such premises appeared, in particular, on Tverskaya and Arbat. They are rented to mini coffee shops, flower parlors and other small operators.
The most active openings are cafes and restaurants, accounting for 45% of new openings in 2021. The leaders in the emergence of new food outlets are Maroseyka, Pyatnitskaya and Pokrovka, which accounted for about 30% of the openings in the central shopping corridors of Moscow. At the same time, in general, Pokrovka and Bolshaya Dmitrovka became the leaders in reducing the share of vacant premises. According to CBRE, these streets, along with Patriarshiye and Maroseyka, are characterized by the lowest vacancy rate (6-7%). The maximum indicator is still on 1st Tverskaya-Yamskaya and Tverskaya streets.
“Many retailers, due to covid restrictions, faced a shortfall in profits and were on the verge of closing establishments, the amount of revenue fell to 10-20% of the previous years. However, it should be noted that despite the impact of the pandemic reality on street retail operators, we note a positive trend towards an increase in new openings on the streets of Moscow, which will continue if the situation gradually stabilizes,” sums up Irina Kozina, director of street retail at Knight Frank.