She adds that reevaluation of retail concepts has taken place due to the surpass of classic formats and a tough competition caused by the rise of strong players. Only those survive and develop who are trying to increase the loyalty of their visitors by offering new services and a varied range of items.
Marina Stogova, head of commercial real estate with Glincom, continues that if before an average cycle of shopping real estate project was about 10-15 years, it is now only 4-5 years. The reconceptualization is inevitable for a business as a way to keep its niche.
The departure of international brands is also pushing shopping centres to rethink their formats, announces Svetlana Yarova, head of brokerage with RRG. Their areas can not only be filled in with other fashion retailors, but they can also be experimented with in terms of new formats.
“Basically, we are not talking about a reconceptualization at the moment as there is no money for such a transformation: the pandemic and the following economic instability both highlighted the existing problems while pushing away their solutions. So now it is more about a commercial rebirth with some elements of reconceptualization of weaker areas in shopping centres, such as reformatting a part of a floor or attracting new operators,” argues Yarova.
She adds that negotiations which are possible now, recently, were out of the question due to the opposite standings of both parties or the lack of areas. “There is a demand for clothes and shoe retailors, household goods, pet shops, makeup and entertainment. While such hype concepts as slime cafes or vr-projects are decreasing, explains Yarova.
In general, large Russian brands have been increasing their positions since February. At the same time, hardly anyone is ready for an active expansion, as most companies mostly mention a consistent development and launches of new formats.
Based on the opinion of Tatiana Lyalina, Commercial Director with M5Mall Shopping and Entertainment Centre, nearly half of shopping and entertainment centres need a reconceptualization or a renovation. The projects existing now are both obsolete and out of date, as generations and trends change together with the formats of retail trade, and new competitors emerge who grow into the urban environment. So those shopping centres which are not ready to change are risking to give away their traffic to more modern projects thus losing their turnover, average bill, the catchment area and as a result are likely to face the decrease in the rent income. Besides, there can be a competitor which attracts your customer pool appear in the neighbourhood. So, the reconceptualization can happen in different formats, for example, there is a change in the tenant mix which depends on the environment, so we deal with their needs and the income level. Or there are more serious changes to be made, for instance, to remove the dead-end zones in order to reorganize customers’ flow, to change the existing renting spaces and to adjust them for new retail formats. A modern trend is a shopping centre which is in touch with the reality and must include new spaces for people to mix in. A good example of such an integrated space is Paveletskaya Plaza in Moscow. Reconceptualization is bound to increase the traffic, as well as to present the uniqueness of the project.