Shopping center traffic in April-mid-May grew by 7% yoy

After a sharp drop in attendance caused by the departure of foreign brands, the traffic of large shopping centers throughout Russia began to recover. In April-mid-May, it grew by 7% year-on-year. In the market, the emerging revival is associated with the emergence of new tenants and the reformatting of familiar stores. But consultants do not expect a full recovery of the segment: a significant gap with the pre-pandemic 2019 will remain for a long time.

The Mall Index (reflects the number of visitors per 1,000 sq. m of retail space) in Russia in April-mid-May increased by an average of 3% yoy, follows from Focus Technologies data. Most significantly – by 7% – increased the traffic of large shopping centers with an area of ​​more than 40 thousand square meters. m. In small and medium-sized objects (from 5 thousand to 40 thousand sq. m.), the increase was insignificant – only 1%.

Mikhail Vasiliev, head of research and consulting at Focus Technologies, explains that this trend is manifested in all major cities of the country. He attributes this to the gradual opening of new stores by Russian and Turkish retailers in place of outlets for Western brands that have left the country. Large shopping centers suffered the most from their departure, as in some of these facilities foreign chains occupied up to 50% of the leasable area, says Marina Malakhatko, senior director of CORE.XP. The expert explains that, on the one hand, small shopping centers are more stable during crisis periods, on the other hand, unlike large shopping centers, traffic growth is limited for such objects.

Ms. Malakhatko confirms that now new stores are being opened mainly by Russian and Turkish chains. “Iranian, Indian, Korean and other brands, as announced a year ago, we do not see yet,” she says.

Eterna CEO Dmitry Tomilin is skeptical about opening stores under new brands in the place of departed Western players. According to him, consumers are often disappointed with new concepts and, as a result, such objects do not lead to a significant improvement in the performance of shopping centers. Magic Group President Alexander Peremyatov did not notice the expected revival after the opening of some Inditex stores under new signs. “At the time of the opening of these points of sale there was a small surge of interest from buyers, but now it has faded,” he says. Although the managing partner of Vanchugov & Partners Alexey Vanchugov explains that any openings provide an increase in traffic: buyers come at least to look at new formats.

Investors are also likely to take a positive view of the emerging signs of recovery in the retail real estate segment. According to NF Group forecasts, this year the volume of investments in such facilities will exceed 80–90 billion rubles, setting a record since at least 2017. Relative to 2022, this figure could more than double. Analysts at NF Group note that earlier in the retail real estate market, transactions were mainly concluded involving the acquisition of land plots for the construction of new facilities. Now the main activity is associated with a change in the structure of the owners of existing shopping centers, which is facilitated, in particular, by the withdrawal of foreign owners from the Russian market.

The further potential of large shopping centers, according to Mikhail Vasilyev, depends on the speed and volume of replacement of departed retailers. If positive trends continue, then this year their attendance may grow by 1-3% compared to the past, while the gap with the level of 2019 will remain at the level of 25-27%. “The traffic of shopping malls will never recover to the pre-crisis level, since now the formats of trade are changing in principle,” Mr. Tomilin believes. Marina Malakhatko calls the key indicator for the retail real estate market not traffic, but the turnover of objects. According to her, there has not yet been a serious recovery to the level of 2019 in comparable prices and the number of positions in checks, and retailers’ revenue is growing due to higher prices.

Alexandra Mertsalova