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COME ON, GOODBYE

In Moscow, according to JLL, the fashion segment leads in the number of occupied premises in such locations as Stoleshnikov Lane and Petrovka Street (48% and 22%, respectively, in the structure of tenants), which remain a place of concentration of luxury brands. At the same time, fashion brands prefer popular shopping malls to open their first stores in the country, thereby minimizing risks. They consider the premises of street retail mainly for the opening of flagship formats. All debutants of the fashion segment in 2018 eventually opened in the shopping center: COS and Adolfo Dominguez in "Afimall City", Karl Lagerfeld in "Metropolis", Coach in GUM. Street retail chose the American brand of household goods That's Living to open the first point, as well as the Italian perfume brand Xerjoff.

"Location on the central streets of the capital for large luxury retailers has always been more of an image story," shares Olga Yarullina, Director of the Retail real estate Department S.A. Ricci. However, due to the decrease in the level of audience traffic, as well as the general stagnation of the economy, few are now ready to invest in such a retail outlet. Therefore, luxury operators do not seek to expand into street retail, preferring shopping malls. The places of those who "left the streets" are occupied by less expensive retailers and catering outlets focused on pedestrian traffic. Nevertheless, large international players can still attract premises in the street, but everything depends on the location and format (for example, flagship stores of well-known brands in the center of Moscow, such as Nike and adidas). Of the interesting novelties in street retail, the opening of the flagship interior boutique That's Living on Tverskaya Street, the opening of the flagship home appliance store Bosch on Tsvetnoy Boulevard.

Street retail continues to be influenced by the boom of e-commerce (offline stores are beginning to function as showrooms), as well as the reformatting of shopping centers, which are confidently "drifting" towards social and leisure. In addition, the rotation of tenants was associated with the 2018 FIFA World Cup.

SUCH NUTRITIOUS

According to the estimates of Knight Frank, one of the significant trends in the street retail market in Russia in 2018 is a decrease in the average floor space in the offer: 196.6 m2 versus 199.4 m2 in 2017. The tendency to reduce leased space is primarily due to demand from the market, namely operators seeking to be closer to the consumer, the company is convinced. A smaller format allows the retailer to enter a larger number of objects, while a larger area of rented space reduces the number of offers. In addition, in the new offer of street retail premises, developers, in order to get a faster return on investment, design commercial areas with a predominant number of small premises, the rate for which is much higher compared to large-format areas. This is especially true for objects located in the center.

Catering has become the main and leading segment in street retail by all indicators, which has attracted the main demand: more than 40% of the street retail format space inside the TTK falls on catering establishments, Knight Frank reports. Since 2015, this segment has been a leader and over the past three years has shown an increase of 8.3% in the total volume of street retail premises inside the TTK (from 32.5% to 40.8%). The growth in the share of catering establishments, grocery stores, and services amounted to 22% over the year. Catering operators are most active in relation to premises located on pedestrian and transport-pedestrian corridors of the city, and occupy the largest share in the structure of demand - 54.6% and 37.6%, respectively. According to JLL, the leader in the volume of cafe and restaurant openings has become Garden Ring, in second place – Arbat, then Patriarchal Ponds and Pyatnitskaya. Restaurateurs opened new concepts for the market primarily in the popular zonePatriarchs, as well as on Pyatnitskaya.

In S.A. Ricci, in turn, the main "catering" trend of the year is called food halls. Among the food markets that opened in 2018, –«Rag gastronomic row» next to GUM, Eat market in Khamovniki, «Stankolit.Food market», gastromarket «Around the World» on Nikolskaya, «Central Market on Maroseika». At the beginning of 2019, a food court «Depot» was launched in the renovated Mius Tram Park.

Author: Ekaterina Reutskaya

Photo: from free sources