Shopping Centers Today International

APR 2016

Shopping Centers Today is the news magazine of the International Council of Shopping Centers (ICSC)

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currency has plummeted over the past two years, and last year the economy shrank by 3.8 percent. Perhaps not surprisingly, retailers in Russia are becoming more cautious, Baranowska suggests. Though tenant demand remains strong in Moscow, St. Petersburg and some of the other cities with populations in excess of 1 million, the outlook is darker in the smaller markets, she says. "Many retail- ers are continuing their expansion, but deploying a cautious approach focusing on prime locations and projects," Ba- ranowska said. "There is lower interest in smaller regional cities, especially from international brands, placing the onus on independent local retailers to drive these markets. Higher vacancy levels are expected as a result." In Moscow some 1.2 million square meters of projects are under active con- struction, many of which will probably open with 50 or 60 percent occupancy, according to Colliers. Other projects have been frozen. In regional markets an additional 2.3 million square meters are under construction, plus 1.7 million square meters of dreams deferred. In the short-to-mid-term, Colliers is forecasting an increase in vacancy levels and some rental declines, particularly in the secondary locations and at lower- quality shopping centers. "Long-term we may see some lessons learned — en- forcing better planning and design and a much higher level of preleased space required for securing financing," Ba- ranowska said. Retailers may also start to rethink their expansion plans and to do more homework before moving into any market. There will probably be a slowdown in Russia, says Andrew Phipps, London- based executive director of CBRE's EMEA retail research and consulting division, though he also notes that there are glimmers of hope and that some of the frozen projects may eventually thaw. "These will start to come back to life over the next few years, assuming there are no new issues coming to the fore," Phipps said. Long-range prospects in Russia are still arguably positive too. Annual in- come in this country of nearly 144 mil- lion climbed to $13,220 per capita in 2014, from $5,800 in 2006 — and that A p r i l 2 0 1 6 / S C T 45 French and English.) The proj- ect is being built on the site of the old Godin stove factory and will combine some half dozen old and new buildings. A central exhibition space that Godin employees once called "the cathedral" because of its stately columns will be preserved as the architectural focus of the site, which will also include brasseries with open-air terraces, shops and a 1,500-seat concert venue. Jll executives have suggested that the effect will be a pleasing mix of modern and industrial architecture not unlike Trinity leeds. H&M, Media Markt and Michael Kors are among the retailers signing on. The grand opening is slated for October. Westfeld Milan Westfeld's frst foray into con- tinental Europe is now under construction on a 60-hectare site adjacent to Milano linate Airport, 15 minutes from the city center. The €1.4 billion, 180,000-square-meter mall is set to open next year, with some 300 shops, 50 restaurants and a 14-screen cinema.

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