Retail Real Estate Market Review

Transcription

1 Retail Real Estate Market Review Moscow, 3Q

2 Moscow Retail Real Estate Market Table 1. Major indicators of Moscow retail real estate market, Q Major indicators 2010 Volume of premises in quality retail centers as of Q3 2010, k sq.m. of total area (GLA 1, k sq.m.) Commissioned in the 1 st half of 2010, k sq.m. of total area (GLA, k sq.m.) Commissioned in Q3 2010, k sq.m. of total area (GLA, k sq.m.) Rate of vacant premises, % 11% / / ,2/188,7 According to the Department of Consumer market and services, the annual growth rate of the retail turnover for the period is estimated to be 104.1%. However, according to the Federal State Statistics Service, the post-crisis recovery of consumer confidence, which was observed from Q2 2009, has now finished. In Q3 2010, the index fell by 4 percentage points to (- 11%). The provision of Moscow residents with premises in quality retail centers was 367 sq. m. GLA/ people. Source: GVA Sawyer s research 1. Supply In Q3 2010, the aggregate supply of premises in quality shopping centers in the Moscow market has amounted to k sq.m. (GLA). Three shopping centres were opened in Q3 2010: «RIO» in the town of Reutov, «Klyuchevoy» and «Markos-Mall».. Shopping and leisure center «Gagarinsky» has been commissioned: permit of the Committee for State Construction Supervision in the city of Moscow (Mosgorstroynadzor) dated ); «Auchan» was opened on the 4 th of October; the official opening ceremony will be held on November 17, It should be noted, that no properties were commissioned during the same period last year. 1 GLA - gross leasable area 2

3 Chart 1. Dynamics of volume of quality supply, GLA Source. GVA Sawyer s research Several mergers and acquisition transactions were closed in Q % 35% 30% At the end of September, X5 Retail Group announced buying of 100% shares of ZAO «Ostrov-Invest», which manages the retail chain «Ostrov» in the Moscow region. sq.m % 20% 15% 10% Group of companies «Protek» (manages the network of «Rigla» pharmacies) has purchased the chain of pharmacies «Panatseya» F Volume on the beginning of the year, GLA New construction, GLA Increase GLA % 5% 0% Group of companies «Viktoriya» has purchased 100% of operational business and assets of the Tula retail chain«semeynaya kopilka» (40 shops in the city of Tula and Tula region). The share of vacant premises is still high (11%), primarily due to the large supply volume within the analyzed period. However, according to GVA Sawyer, the vacancy rate shall fall to 5-7% by Among the key events of Q we should mention the purchase of RC «Format» in the city of Mytishchi (total area 36.5 k sq.m., developer Moon-invest) by a large investment holding with Russian capital. The investment fund Aton Capital Partners (АСР) has become the co-owner of Henderson, which develops the retail chain of men s clothes. In September 2010, Oriola-KD (Finnish pharmaceutical distributor) purchased 70 pharmacies under «O3 Apteka» brand. TPG Capital and «VTB Capital» have purchased 35.4% of shares of «Lenta» group. «Azbuka vkusa» and the chain of wine boutiques «Kolektsiya vin» announced a merger to conduct the united purchasing and assortment policy and to increase the supply for the customers of both chains. Burger King has purchased the investment fund 3G Capital (owned by Brazilian investors) for 3,26 billion US dollars. The new owner shall also undertake liabilities of the company (total amount of the transaction is around 4 billion US dollars). Spar Moscow Holding (33 shops in Moscow) merges with «SVA-trading», which develops Spar chain in the Moscow region. 3

4 2. Financial terms Minimum rent rates from the beginning of the crisis (Q3 2008) were registered in Q However, there was an increasing imbalance in the rent rates in shopping centers of different level and quality. As of today, there is an upward tendency in rent rates, for many tenants rent rates have increased by 7-10% from the beginning of the year. When leasing sections to large clothes operators in new shopping centers, it is preferred to use percent of turnover approach rather than a fixed rent rate and the minimal fixed rent rate is put in the contract. For example, for supermarkets the market average percent of turnover is around 5-8%, for clothes shops 5-12%. Entertainment sector operators are ready to pay more than 10%, while the fixed rate is minimal. Table 3. Range of rent rates for operators in the Moscow shopping centers, Q Rent rates, $ per sq.m. per year Hypermarket Supermarket Anchor tenant electronics and household appliances Entertainment zone Shopping gallery up to 100 sq.m Shopping gallery from sq.m. $ per sq.m. per year Food court and food service operators more often lease premises at fixed rate, but some of them are ready to lease premises in shopping centers on the terms of commission from the turnover, 8-10% on average. Operational costs, $ per sq.m. per year Source: GVA Sawyer s research

5 Moscow Retail Real Estate Market, 3Q Demand In Q3 2010, demand from retailers for quality vacant premises in shopping malls and in street retail properties continues to grow. Among the largest deals in Q we should note the rent of sq. m. in the hotel Moscow by the luxury retailer Podium. In Q3 2010, the chain Dochki i Synochki opened two shops in Moscow; the retail chain Riv Gosh has opened seven (5 in Moscow) new shops since the beginning of The chain Ocean is planning to open 30 shops in Moscow ( ) anв 5 shops in Kazan. Media Markt is planning to open 3 hypermarkets in the 2 nd half of The chain of Olivye supermarkets is planning to increase its chain up to sales points by 2012 in Moscow and the Moscow region. Gloria Jeans is planning to increase its retail chain in Russia by 160 shops in 2010 (around 100 shops have already been opened). Several international retailers have announced about their plans to return to the Russian market. The Russian branch of the German retailer Media- Saturn-Holding (included in Metro group) is opening the first hypermarket Saturn (5 600 sq. m. total area, retail area) of electronics and household appliances in Russia, in REC Vegas. Alshaya Group is planning to open around 150 footwear discount shops Payless of the American shoe company Collective Brands Inc. by X5 Retail Group, Auchan, Magnit and other large chains are actively developing and opening new shops. Auchan group, who manages the chain of Auchan hypermarkets in Russia, is planning to increase the number of their Russian supermarkets Atak fivefold from 40 up to 200 shops by The subsidiary of the Finnish company Onninen Oy (distributor of sanitary engineering) - ООО Onninen - launches a chain of Onninen Express shops in Russia dealing in sale of sanitary engineering for construction companies, industrial organizations and infrastructural projects. El dorado is opening 2 new shops in Moscow and Reutov, the total area is around sq. m. The first hypermarket of electronics Bol shaya Evroset is opened in Moscow (around sq. m.) in RC Semyonovskiy. The second shop of the chain shall occupy around 2, 5 k sq. m. The St. Petersburg chain Deti is planning to open 7 shops in Moscow in Group of companies Tashir is planning to start promoting the British clothes brand Quiz of medium price segment: the group shall open around 8 fashion boutiques in Russia within 1.5 years. 5

6 Подготовлено GVA Sawyer