Analysts of the consulting company NF Group summed up the results of 2023 in the Russian retail real estate market. According to the study, the market volume in the whole country amounted to 32.5 million square meters, and the increase in new supply was 288.7 thousand square meters or 25 objects, which is the minimum volume of retail space introduced over the past 20 years. In the regions (excluding Moscow and the Moscow region, St. Petersburg and the Leningrad Region), 19 facilities were opened for 220 thousand square meters, while in 2024 the figure may more than double: the announced volume of commissioning is 24 shopping centers for about 562 thousand square meters. m of leasable retail space. More than 40% of the volume will be accounted for by two shopping malls of the super-regional format, however, in quantitative terms, the bulk of the new offer (10 facilities) will be represented by the micro-district format, according to a press release from the company.
NF Group is an international consulting company that specializes in providing real estate, investment and asset management services. The company was founded in 2000 and has offices in more than 100 cities around the world. It offers real estate valuation services, strategic consulting, commercial real estate sales and rentals, and real estate investment management services.
In 2023, 19 shopping malls with a total leasable area of about 220 thousand square meters were opened in the regions of Russia, which is 34% higher than in 2022. The growth of the indicator is explained by the effect of the low base of 2022 and the opening of trading centers, the dates of which were previously postponed. Since the beginning of 2017, the volume of shopping center commissioning in the regions of the Russian Federation exceeded 500 thousand square meters only once – in 2021, when 516 thousand square meters were commissioned. The rest of the time, the indicator ranged from 160 thousand square meters to 479 thousand square meters, while during the period of active market growth from 2007 to 2016. At least 1 million square meters were opened annually of retail space.
Over the past 10 years, the retail real estate market in Russia has undergone significant changes. In 2010-2011, there was a significant decline due to the economic crisis, but stable growth was noted in subsequent years.
One of the key trends in recent years has been the development of shopping center formats, such as district and district shopping centers, which offer a more diverse range of goods and services compared to traditional malls. There is also a growing demand for high-quality shopping malls with a high level of service and convenient location.
In addition, consumer behavior is changing, which leads to an increase in the share of online commerce and the development of delivery services. This, in turn, affects the structure of tenants in shopping malls, where online stores and food delivery services are taking up more and more space.
In general, the retail real estate market remains attractive to investors, and it is expected that in the coming years it will continue to develop, adapting to changes in consumer behavior and technological innovations.
The volume of commissioning of leasable areas in 2024 may be the maximum since 2016: 24 shopping centers for 562 thousand square meters have been announced. More than 40% of the volume will fall on two shopping centers of super-regional format, the area of such facilities starts from 75 thousand square meters. However, in quantitative terms, the bulk of the new offer (10 objects) will be represented by a micro-district format.
By the end of 2024, the volume of high-quality supply in the regions may reach 21.4 million square meters, while the deadlines for the completion of about 30% of the facilities may still be postponed.
“In 2023, the market of shopping malls in the regions showed more stable growth compared to the capital markets. One of the main advantages of the regions was that there were not so many large international retailers in them, so their departure from the Russian Federation was not so noticeable. This made it possible to effectively use the vacated space, and the rapid emergence of new brands and formats returned the interest of buyers to the shopping center. In 2024, positive dynamics in the volume of discoveries is expected and it is primarily due to the implementation of transferred facilities from 2022 and 2023, as well as the areas of several fairly large projects consisting of multifunctional facilities and transport hubs,” said Evgenia Khakberdieva, regional director of the department of commercial real estate at NF Group.