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In the segment of street retail, according to the experts of the company S.A. Ricci, there is still«general lack of professionalism of the owners and the lack of quality management of the companies». "Therefore, the reputation and adequacy of the owner comes to the fore, with whom it would be possible to quickly negotiate about operational matters (re­­mont, signage, entrance groups, engineering communications and much more)," explains Alexander Morozov. – Due to the increase in VAT, more attention was paid to taxes and the legal form – «simplified » (USN) or the subject of VAT».

As a result, the trend of the departure of key fashion operators from street retail continued and intensified. Among the reasons, traditionally, are high rental rates, as well as a change in the quality of traffic due to the consequences of the "pedestrian" policy of the city authorities. Catering is becoming a serious competitor of fashion operators in street retail. However, not everything is so bad. For example, JLL reports that the American sportswear brand New Balance has appeared in two central street locations - Stoleshnikov Lane and Arbat. The St. James men's clothing store opened a boutique in Stoleshnikov Lane, and the Italian Max Mara – on Novy Arbat. The Unique Fabric women's clothing store occupied three premises at once on Maroseika Street, Bolshaya Sadovaya and Zubovsky Boulevard. CBRE also celebrates the opening of the salon of furniture and accessories That's living (Moscow, Tverskaya St., 9), and a new gastronomic concept of the food hall "Around the World" (Nikolskaya St., 10).

BETS ARE PLACED

During 2018, retailers' expenses for renting premises, expressed in a fixed rental rate, a percentage of turnover and additional expenses (operating, marketing and other expenses in excess of rent), remained unchanged in most Russian megacities, including Moscow and St. Petersburg, according to the CBRE.

Despite the low growth of new supply and a decrease in the share of vacant space in most key markets by 1%, landlords are cautiously approaching the increase in rental rates. Players have been living on the principle of "in the same boat" for the fifth year. "The owners and the management Company understand that the success of the facility is linked to the success of its tenants, so joint efforts are being made, which allows the facility to remain successful," shares Alexander Morozov. – Then the rates rise due to indexing and/or the growth of turnover, on which payments are often calculated. A difficult object, where there are a lot of vacant premises, forces the landlord to make concessions. In this case, the rates are reduced up to a percentage of the turnover.

In CBRE they also talk about the continuation of the suit by fashion retailers of new forms of interaction with the management companies of shopping centers. For example, the world's largest flexible retail platform, the British company We Are Pop Up, has entered the Russian market, which allows you to quickly rent space for a pop-up store in a shopping center or street retail to capitalize on a certain event or holiday. In addition, in 2018, new formats of retail real estate were actively developing in the regions: outlet center (Brand's Stories Outlet in Yekaterinburg), amusement parks and retail parks (DEPO retail Park in Nizhny Tagil).

Experts also report on the ongoing renovation of objects. «Developers have taken a course to update obsolete objects, – explains Alexander Morozov. – To attract buyers, shopping centers are trying to strengthen and diversify the entertainment component, carry out reconstructions and real estate development, trying to become more modern. Retailers themselves also try to make the customer's stay in the store as pleasant as possible: they improve zoning and service, expand and change the assortment, develop self-service zones. The transformation of the business in the direction of greater technological efficiency is also continuing. Development of own applications, updating of information sites, data processing, targeted work with the audience, etc. According to the forecasts of CBRE, in the next ten years, a further increase in the share of the entertainment component is expected from 10% to 25%.

To be continued.

< span style="font-size: 12px;">Text author: Ekaterina Reutskaya

< span style="font-size: 12px;">Photo: pixabay