Development in spite of
Despite all the difficulties of the past two years, many operators continue to develop, and the demand for retail space remains. “At the same time, continued existence in the realities of the crisis has led to a noticeable transformation of the structure of demand and its redistribution,” says Nadezhda Tsvetkova. For example, judging by the deals made by CBRE, the high activity of the fashion segment remains, but its share in the demand structure is noticeably lower than in 2019 and 2020. So, in 2020, demand fell by 4 percentage points in comparison with 2019, and in 2021 - by 10 percentage points in comparison with 2020.
The food retail segment, which is obviously the most resistant to “pandemic” restrictions, is also noticeable in the structure of demand. In 2021, the share of supermarkets was 13% of the total occupied space. Among tenants of retail real estate, there are also non-standard for such objects: in the outgoing year, coworking spaces have appeared in the structure of demand. Their share in the total structure of transactions in 2021 was 10%.
According to Knight Frank, by the end of 2021, 14 new brands will enter the Russian market (13 brands entered the market in 2020). Among them are Arket, Ecco Kids and Dior Beauty, which opened as a classic store in a mall, and Zara Beauty. The Bally brand opened its first retail store in a standard format in the Crocus City Mall. Superdry and Miss Sixty have relaunched their concepts in Moscow. Superdry entered the market as an outlet at Ordzhonikidze 11, the Miss Sixty brand opened two of its stores, in the Aviapark and Metropolis shopping centers.
“However, in general, the structure of demand remains weak on the part of international operators. The reason for the slowdown in the expansion of foreign brands on the Russian market is the current situation on the Russian market, as well as the difficult situation in international markets associated with the Covid-19 pandemic, "Knight Frank said.
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Shopping mall operations in 2021 were again impacted by the restrictions associated with the pandemic. Next year, a lot will also depend on what restrictions will affect certain types of retailers or entire properties. I would like to believe that there are none, but it is obvious that the business is forced to take into account different scenarios. In Moscow, barrier-free access to shopping centers is currently maintained, regardless of whether visitors have QR codes. However, even in those regions where visiting non-food stores is possible only upon presentation of QR codes, the business must gradually adapt to such a restrictive measure in the horizon for as long as a year at most and learn how to operate within the framework of the new pandemic norm.
The attendance rate, which has fallen due to the pandemic, will be a key factor that will continue to influence the development of the entire retail sector as a whole. According to Nadezhda Tsvetkova, visitor traffic in shopping facilities is still low, but higher than in 2020. Interestingly, traffic is now characterized by a higher conversion - those who come to the mall are more likely to make a purchase.
“The turnover in a number of categories is recovering faster than traffic. The purchasing behavior model is unambiguously changing: more and more of our visitors make a clear targeted visit to the shopping center, planning the shopping list and route in advance. As a result, the average time spent in a shopping center, which has already become a familiar KPI, does not increase. We understand that it is necessary to change the models of interaction with visitors and adapt them to changing needs. In our properties, we focus on additional product communication, the active use of instant messengers and video content to inform buyers about the current range and offers, ongoing support and improvement of omnichannel feedback, additional navigation and other factors affecting the shopping experience, "says the Chief Financial Officer and NHOOD Russia asset management Maria Chernakova.