“Brands don’t want to leave our market no matter what they say” — RealnoeVremya.com
Expert — on the reasons for the sale of shopping centers, the adaptation of metropolitan mega-shopping centers and the advantages of regional amenities
Western sanctions have created difficult conditions for the operation of shopping centers in Russia: many tenants among foreign companies have suspended their activities, due to which the owners of shopping centers have suffered losses and put the sites up for sale. Why investors are not yet in a hurry to invest in shopping centers and what are the advantages of regional shopping centers over large Moscow shopping centers – read in the author’s column for Realnoe Vremya from the director of service development regional, co-director of CORE.XP retail department, Mikhail Rogozhin.
If there is demand, there is supply
To this day, some owners are trying to sell the object, realizing that now they will have to work a lot with it. And if they don’t have such a burning desire and opportunity, then they will try to sell it. But the point is that no one wants to sell cheap and buy expensive. Thus, all offers that can theoretically go on sale today will not be implemented.
Again, thinking about the possibility of selling and selling are two different things. As in the joke: does Izya want to sell watches or market watches? That is, often people enter the market just to ask the price. Some are ready to sell the item, but if there is adequate supply (in their opinion). By today’s standards, that might not be quite what they expect. Of course, there is a trend in the sale of shopping centers currently, but it is not exhaustive and concerns objects that are not the simplest and probably not the most recent.
Regional malls are rated higher than those in Moscow
In general, the situation is about the same for the whole country. But, probably, Moscow and St. Petersburg stand out here, because there is a huge number of very large objects there, and the price is appropriate. And there are not so many investors who are now ready to pay a lot of money even for a good object.
If we take smaller and regional objects, then an object with an area of 30-40 thousand is much easier now, it can be sold and, for example, then “animated”. Therefore, investors are watching them closely, since the amount of money that will have to be spent is much lower than for premium Moscow projects. In each city, I think there will be a number of items, the current owners may want to sell.
Another issue for buyers is that it’s not always clear what to do with these items. If there is a real possibility of improvement within 1-2 years, then of course you should take it if you understand how and what to do. And who exactly will. If we consider it simply as a question of investment, then the question of recovery may arise here.
Brands do not want to leave the Russian market
Of course, Western sanctions have weighed on the development of rent levels in shopping centers, as many outlets have closed. But there is no general trend in this area now. Everyone is trying to bargain over payment here. After all, each owner is fighting for himself.
On the one hand, when you own and LPP, Adidas, H&M and many other international brand iconic stores are temporarily closed, you sit and think about what to do, wait, try to negotiate. Because you want them to open up and keep working, you go from there. Because there is often no one to replace them. And there are those who closed only one conditional Adidas (which initially did not have a wide representation of these networks), such objects felt this result a little easier.
As for the rent, here, on the one hand, everyone is also trying to negotiate, and on the other, everyone is waiting for the destructive politician to weaken a little. At the same time, it is understood that the brands mentioned by us and others like them, in principle, do not want to leave our market, since this is quite a serious share for them. Whatever they say is really a lot for them.
Therefore, they either try to negotiate with new partners from other countries or, perhaps, with some subsidiaries, in order to continue working later, as if they were not alone. Although the merchandise will remain their own, you may need to play around with brand names a bit. There is such a topic: in Moscow, the stores of the Polish LPP chain have already opened, which have slightly changed their names, but are slowly resuming their activities. The same will happen with McDonald’s. All restaurants directly owned by him have now been sold to a certain businessman from Kemerovo and, according to unverified rumors, will open even with the name “Mc”, with the possibility of keeping the letter M logo.
Ikea’s relevance is going nowhere
Under current conditions, I would say to shopping center owners that you should never turn a blind eye to alternatives. Especially depending on what you wrote in the contract with existing comrades who are temporarily unemployed. On the one hand, of course, we have to keep our eyes open and watch the opportunities that arise and will arise, because one day the Chinese, the Turks, the Iranians and someone else will come. Everything is moving slowly, but it is impossible to predict when it will be in large volume.
On the other hand, we must not shut ourselves up, we must try to negotiate. Knowing that if you see the prospect, relatively speaking, of keeping “Ikea” in your mall, then, of course, it may be worth suffering a bit, but only so that there is some mutual benefit: you wait, understand for what, what you will get during the downtime of these stores, and you are fine, you are ready to wait.
Because it is difficult to find an alternative to Ikea now, maybe Hoff will come, but it is bound to always develop in such a volume as Ikea. Or maybe it will. For example, in Kazan we launched the Hoff in Gorky Park shopping center and it feels good so far. But nevertheless, the relevance of Ikea is not going anywhere and is unlikely to go away. But, again, it depends on the object. If the object is strong, then it may have more pathos and piety in a relatively peaceful struggle with the marks. And if the install is weaker, at some point the brands themselves can pay what they owe and then leave that install. And you will end up with such holes that for a very long time you will think about how to fix them. And replacing Zara with Fixprice is probably not very healthy for the object as a whole.
The author’s opinion may not coincide with the position of the editorial board of Realnoe Vremya.