Street rules
And we will go north
The most successful tourist season since the collapse of the USSR with access to the top locations of tourist-oriented stores (mainly Chinese), the introduction of paid parking, "night of long buckets" and statements by officials about the expansion of pedestrian zones allowed experts to call the past year one of the most interesting for St. Petersburg street retail.
On average, the rotation in 2016 affected 21.5% of street retail facilities in the city center, analysts tell Knight Frank St. Petersburg. In about half of the cases, there was not only a change of tenant, but also a change of profile. Thus, the demolition of the pavilions on Sennaya Square significantly improved the visual accessibility of the built-in premises that were previously on the "second line", increased their attractiveness and stimulated an increase in rental rates. In the future, this will lead to a change in the structure of tenants. In turn, souvenir shops, ready to pay the most fabulous rates, continue to displace not only fashion operators, but also restaurateurs from the streets. Only on Nevsky Prospekt, according to Knight Frank St Petersburg, there are now 19 stores of this profile, with a total area of about 1800 m2.
Fashion operators in street retail were also influenced by the closure/opening after repairs or the commissioning of new metro stations: on the eve of 2016, the Vyborgskaya metro station opened, in May 2016, Vasileostrovskaya, and at the end of the year, the opening took place Elizarovskaya metro station. In 2017, active dynamics in the street retail segment will be observed in the zone of influence of the Lesnaya metro station, which is being closed for repairs. In turn, the construction of new stations long before their opening attracts the attention of investors and operators to the relevant locations. In particular, the planned opening of three new Frunze radius stations in the south of the city in 2017 stimulates the rates and interest of tenants in street retail premises in the area adjacent to Bucharest Street.
Moreover, the players note the "mass exodus" of the St. Petersburg luxury to a "quieter and less touristic place". According to experts JLL, the most serious changes are associated with the strengthening of the role of Staro-Nevsky Prospekt as a luxury shopping corridor – it has already been chosen by brands such as Louis Vuitton and Escada, a Dior boutique will soon open there. The positions of Staro-Nevsky, according to market participants, will only strengthen – first of all, luxury retailers are considering the possibility of opening stores here.
In total, according to Knight Frank St Petersburg, 17 new retail operators joined the St. Petersburg market during the year, with both domestic and foreign networks showing activity. Maris, in association with CBRE, expects the continuation of expansion into the St. Petersburg market of new international brands and also cites the latest discoveries: on Bolshoy Prospekt PS – the first Italian O bag store; on Nevsky Prospekt – boutiques Eres (Chanel) and Jil Sander Navy; Veta store has started work on Kamennoostrovsky Prospekt.
"In St. Petersburg, the street retail market has stabilized over the past year: it has adapted to the changed macroeconomic situation," reflects Yulia Korchemnaya, head of street retail at JLL in St. Petersburg. Due to the stability of the ruble against the dollar, the absence of global macroeconomic shocks, there was an increase in demand from retailers, including the fashion segment, for the main shopping streets of the city. As a result, in 2016, 8% more street retail facilities were opened on these streets than were closed.
In addition, there are more premium class tenants on B. Konyushennaya Street, and the opening of "New Holland" has led to an increase in pedestrian flows in neighboring territories. "In these conditions, the attractiveness of street retail premises on Konnogvardeysky Boulevard and Labor Square will significantly increase," rates here, according to our forecasts, will increase by 10-15%," believes Marina Puzanova, head of the commercial real estate department Knight Frank St Petersburg. "Now is the time to invest in the facilities of this location."
To be continued.
Author:Ekaterina Reutskaya
Photo: Shutterstock.com
