Revival in the commercial real estate market

The onset of the cold season and the reduction in the share of empty space stimulated consumers to visit shopping centers more often: their attendance in Moscow and St. Petersburg in October increased by 6–10% compared to last year. The dynamics are more noticeable in large-format objects. Neither shopping centers nor the street retail segment of the market yet see prerequisites for an increase in rates, although they predict a further decline in vacancy. Office real estate is developing in a similar scenario and is experiencing a muted revival.

The Mall Index indicator (reflects the number of visitors per 1 thousand sq. m of retail space) in the period September 26 – October 23 in Moscow exceeded the value for the same period last year by 6%, in St. Petersburg – by 10%, calculated by Focus Technologies . The most positive dynamics, according to analysts, are in large-format objects (with an area of ​​more than 40 thousand square meters), which faced more pronounced losses last year. In Moscow, their traffic in the last month increased by 12% year on year, in St. Petersburg – by 15%.

Seasonal growth

Mikhail Vasiliev, head of research and consulting at Focus Technologies, connects the growth of the shopping center audience with the weather: after a warm September, a cold snap began, stimulating a seasonal change of wardrobe. The expert points out that the attendance of fashion retail tenants over the past month has increased by 26% year-on-year in Moscow and by 18% in St. Petersburg.

“Clothing and footwear stores occupy 40% or more of the space in shopping centers; now we see the opening of new tenants in the segment, attracting additional audiences,” adds Mr. Vasiliev.

The share of empty space is indeed decreasing. So, in MoscowAccording to the regional director of the retail real estate department of NF Group, Evgenia Khakberdieva, vacancy in September amounted to 9.8%, having decreased by 2.4 percentage points over the quarter. She associates the trend with the expansion of fashion brands: in the third quarter, Just Clothes from lady & gentleman city and Idol from MFG entered the market. By the end of the year, the expert expects a further reduction in vacancies. Andrey Surkov, head of research and consulting at Magazin Magazinov, makes a more restrained forecast. The share of empty space, in his opinion, will be 12%, which is a percentage point lower than the same period last year.

IN St. Petersburg, according to estimates from the director of the Maris market research department, Alena Volobueva, vacancy in shopping centers is now 7.8% and also retains the prospect of a decline in the fourth quarter. The expert notes an increase in demand for premises from fashion chains and jewelry retailers.

The consultants interviewed by Kommersant do not note any prospects for an increase in rates on the retail real estate market either in Moscow or St. Petersburg.

Although the high season in the segment traditionally begins in November: sales start, flowing into the period of the pre-New Year rush.

Nadezhda Tsvetkova, head of retail space leasing at CORE.XP, suggests that, faced with financial difficulties, the population will be more attentive to discounts and advantageous offers this year. This will ensure an increase in flow. Director for Management and Development of the Mall Management Group, Alina Strelkova, expects that at her company’s facilities at the end of the year, attendance will increase by 15% year-on-year, and turnover by 20–25%. “All last year we were busy replacing outgoing brands; it became turbulent for the market,” she recalls. Ms. Volobueva notes that even if consumers strive to reduce spending, an increase in turnover will occur due to a general increase in prices.

Street stability

The vacancy level in the street retail market, according to Denis Bobkov, head of marketing and analytics at Asterus, is now 13–15%; year-on-year the value decreased by 1–2 percentage points due to the expansion of tenants. By the end of the year, the figure will reach 12–14%, but is unlikely to return to the stable level of 2019 – 10%, he argues. Marina Markova, head of the street retail department of the Magazin Magazin company, also has a positive outlook: according to her, before the New Year, the business is more actively concluding deals, trying to fulfill the plans formed at the beginning of the year. “Both catering and clothing brands and accessories are actively developing,” she says.

Denis Bobkov talks about the slow growth of rates in the street retail segment, by 3–5% year on year, although in some cases we are talking about 20–30%: the most high-quality lots in terms of price-quality ratio are washed out of the market, this allows owners demanded premises in good locations increase prices. Ms. Markova adds that owners agree to reduce prices only for objects that have been on display for a long time. These could be, for example, premises with complex characteristics or an unfortunate location.

Office revival

The Moscow office market, according to Victoria Goryacheva, director of the Nikoliers office real estate department, remains quite active due to pent-up demand and the development of Russian business, and the last quarter of the year traditionally leads in terms of transaction volume. The total absorption of offices this year in Moscow may reach 1.8–2 million sq. m. m, increasing year-on-year by 50–67%, suggests Kirill Babichenko, director of the office real estate department at CORE.XP.

The main demand in the market, according to him, is formed by the public sector, companies from the sphere of telecommunications, financial services, real estate and construction.

Victoria Goryacheva notes that at the end of nine months of the year, vacancy in the Moscow office market amounted to 7.4%. The expert expects that the value will stabilize at this level in the future. Mr. Babichenko’s forecast is close to this figure: 8.2%. The share of empty class A space will be 6.3%, being noticeably lower than the value for class B (12.6%). The average level of requested rates, according to Ms. Goryacheva, in Moscow is 25.6 thousand rubles. and 18 thousand rubles. per sq. m per year respectively. The expert does not note an increase in indicators, but speaks of their stabilization: previously, discounts on the market could reach 15–20%.

In St. Petersburg, the volume of office transactions at the end of the year will be about 250 thousand sq. m. m, being 15% lower than in 2022, predicts Alena Volobueva. “There is now demand in the market from Russian IT companies, as well as those who are expanding their business, taking advantage of the opportunities that have arisen after the departure of foreign players,” says Ms. Goryacheva. According to Maris estimates, at the end of September 9.4% of office space in St. Petersburg was empty; compared to last year, the figure decreased slightly – by 1.8%. Alena Volobueva does not see any prerequisites for its significant change. The average rental rate for class A premises, according to her, is 2.1 thousand rubles. per sq. m per month, class B – 1.4 thousand rubles. By the end of last year, both values ​​were up 2.9%.

Alexandra Mertsalova