Market overview 2nd Quarter 2017: Retail Sector

The offer

  • In the first half of 2017, there were no new projects commissioned in the retail sector in Saint-Petersburg. In the first half of 2017, there were no new projects commissioned in the retail sector in Saint-Petersburg. Thereby, by August 2017 the offer in high quality retail real estate will remain 3.9 million sq. m.
  • In perspective of 3-5 years no major projects are planned to be commissioned. This fact confirms the saturation of the retail real estate market in Saint-Petersburg.
  • From the end of 2016, a key development tendency in retail sector is renovation or reconception of existing obsolete projects.
  • Thus, the reconception of "Kapitoliy" shopping mall is being continued, and the outlet center is planned to be launched within its framework. The reconception of Shopping and entertainment complex "PIK" is also beeng continued withhout any pauses.

Dynamics of the new premises commissioning

Demand and occupancy rates of shopping centers

  • The retailers' activity in the 1st half of 2017 was high. The number of newly commissioned premises increased by 30%, compared to the similar period in 2016.
  • In the 1st half of 2017 a new format of leisure sport activity, the "Beach" center, was opened in "RIO" shopping mall. It allows visitors to practice beach sports throughout the whole year.
  • In the 1st half of 2017 the overall market vacancy rate remain at the last year's level of 9%, a major part of which are obsolete shopping malls with sub-optimal location and an outdated concept. The vacancy rate in successful shopping facilities does not exceed 2-3%.

Street retail

  • There was an increase in street retail segment in the 1st half of 2017. Primarily due to the continuing trend of active development in the catering sector. Many network operators updated their development plans and have been actively expanding since the beginning of 2017.
  • Grocery retailers were also highly active in the 1st half of 2017 due to appearance of new formats in large federal networks.
  • In the 1st half of 2017 there were two big commissioning in street retail format:

- Supermarket "Perekrestok" was opened in Periniy rows in Dumskaya street with total area of 2 000 sq.m.
- Supermarket "Lend" was opened in "Passage" shopping mall on Nevskiy prospect with total area of 2 600 sq.m.

  • According to the results of the 1st half of 2017 The structure of the street retail market by tenants profile remains stable, with slight increase of grocery retailers' share.
  • The vacancy level in street retail sector remained at the level of 4-5% with no significant fluctuations. Exposure period for liquid facilities does not exceed 2 months.
  • Rental rates also remained stable. The highest rates are still belongs to Nevsky and Bolshoy Prospect (PS).
  • We expect the preservation of the main trends in the street retail segment till the end of 2017.

The structure of demand for street retail premises

Rental rates in key trade corridors

Trade corridor

Rental rate,
Rubles/ sqm/ months

Nevsky prospect

6 000 - 16 000

Bolshoy prospect PS

2 700 - 10 000

Moskovsky prospect

1 700 - 7 000

Sadovaya street

2 200 - 5 500

Vladimirsky prospect

2 300 - 6 000

Sredny prospect VO

1 800 - 4 500

6-7 line VO

2 000 - 4 000

Kamenoostrovsky prospect

2 000 - 8 000

Liteyniy prospect

2 000 - 7 000

Zagorodny prospect

1 500 - 5 000

Vosstaniya street

2 000 - 6 000

Komendantsky prospect

1 800 - 4 500

Leninsky prospect

1 000 - 5 000

Veteranov prospect

1 000 - 4 000

Prosvesheniya prospect

1 500 - 5 000

Engelsa prospect

1 200 - 4 000

Despite of the Confederation Cup and SPIEF, the level of tourist flow to Saint-Petersburg by the end of the 1st half of 2017 remained on the same level. It can be primarily explained by the decreasing number of domestic tourists, who tend to prefer foreign destinations. 
In 2017 the results of the hotel market main indicators are expected to be similar to the results in 2016. Qualitative growth of tourist flow and occupancy will be observed in 2018.

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