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According to Anastasia Malkova, Commercial director of the STONE HEDGE group of companies, some tenants, as a rule, agree with the owner to provide additional preferences and to reduce rates for the period of reconstruction. "The dynamics of the main indicators of the central street retail market in Moscow so far (rental rates and vacancy rate) shows that tenants are primarily interested in newly renovated streets," supports Oksana Kopylova, Head of Retail and warehouse real estate Analytics at JLL. – ​Firstly, during the reconstruction, the number of vacant premises always increases due to the departure of tenants with short-term contracts, for whom it is financially inefficient to be located in a location with limited traffic. Secondly, after the reconstruction, the streets are really transformed, and the profile of operators is shifting towards a better composition, that is, the share of network companies is growing and the share of no name tenants is decreasing.

As a result, the TOP 3 most crowded streets by the end of 2017 looks like this: Pokrovka (2.9% of the premises are empty on it), Myasnitskaya (3.4%) and the Patriarchal Ponds district (3.5%). According to JLL estimates, the most expensive streets in Moscow include: Stoleshnikov Lane, Nikolskaya Street, Kuznetsky Bridge and Petrovka Street. It is worth noting that Petrovka and Nikolskaya Streets became leaders in terms of occupancy dynamics last year: the share of vacant premises here decreased by 4.6 percentage points and by 3.8 percentage points, to 7.5% and 5.3%, respectively. Consistently high rental rates in these locations (at the level of 140–150 thousand rubles per sq. m. m per year) confirm the steady demand from tenants. "Nikolskaya Street is attracting more and more attention of operators this year due to the ever-growing traffic indicators," says Oksana Kopylova. In addition to the presence of several metro stations nearby, an abundance of attractions and the location near Red Square, Nikolskaya is becoming increasingly popular for walking among both tourists and citizens due to the formed and efficient pool of operators.

It is significant that the rotation of operators on this street over the past year has been zero, despite the fact that, thanks to the "luxury" location and high tourist traffic, the composition of operators here is extremely diverse: from restaurants of the highest price level to fast casual format cafes. «The cherry on the cake» in the mix of Nikolskaya catering establishments was the opening in early 2018 of the food hall «Around the World» from Novikov Group and White Rabbit Family in the IFC «Nikolskaya Plaza »: here, in a single space, various cuisines of the world from famous restaurants in casual format.

The opposite trend of a relative decrease in traffic was observed on Pyatnitskaya. "The reconstruction work on Pyatnitskaya took place in 2014," she was one of the first completely renovated streets, which at that moment attracted the special attention of tenants, " explains Oksana Kopylova. – ​As a result of the 2017 reconstruction, the appearance of all the main trade corridors was updated, and Pyatnitskaya ceased to stand out against their background. In addition, this corridor has become very uneven in terms of traffic intensity and, as a result, the demand for premises in certain locations and the level of bids. The highest pedestrian flow of this corridor is concentrated in the location between the Novokuznetsk metro station and Klimentovsky Lane, while its other sections are less popular and the rate level there may be two to three times lower than the Novokuznetsk metro area.

To be continued.

Text: Ekaterina Reutskaya

Photo: shutterstock