MOSCOW Cushman & Wakefield Global Cities Retail Guide

Cushman & Wakefield | Moscow | 2019 0 Moscow is the capital city of Russia and the biggest consumer and retail market in the country. As of January 2018, 12.2 million people live in the city. Retail turnover is more than 3 times more than in St. Petersburg and 20 times more than in other cities with over a million inhabitants. There are 120 quality shopping centres in Moscow with a total GLA of 5.3 million sqm, which is 25% of total retail stock in Russia. The purpose of visiting shopping centres is not restricted to only making purchases, but is shifting to leisure and recreation. There is an obvious trend for shopping centres to have extensive entertainment and food and beverage areas. These zones have become points of attraction in shopping centres, generating additional footfall. Large-scale city improvements are being held in Moscow as part of the My Street project. Redevelopment is generally targeted at pedestrians - the streets are becoming wider, while parking areas close to the city centre are now limited and paid. Development of this kind has a large impact on high street retail as whole and the profiles of some streets. In particular, fashion operators are being replaced with MOSCOW tenants that are focused on pedestrian traffic, such as restaurants, cafés and convenience stores. OVERVIEW

Cushman & Wakefield | Moscow | 2019 1 MOSCOW KEY RETAIL STREETS & AREAS

CITY CENTRE TVERSKAYA STREET

The oldest shopping destination in Moscow is This is one of the busiest streets and shopping locations concentrated around the Kremlin. GUM shopping centre in Moscow, a ‘must visit’ area for all tourists in the city. It was opened in 1893 and located in front of the Kremlin starts from the Kremlin and goes north. Historically, the on the opposite side of the Red Square. It is an iconic street was home to the flagship stores of many fashion place for many retailers and a popular tourist destination. brands, however after the ban of parking and The exceptional historical interiors and unique location reconstruction, Tversakaya Street’s tenant mix has attract luxury brands, such as Gucci, Louis Vuitton, changed significantly. Now it is occupied with operators Moschino, Dior, Burberry, Escada. mostly focused on pedestrian traffic – catering operators, pharmacies, banks and mini-markets. Among the surroundings there is Nikolskaya Street which after reconstruction started to generate huge Areas adjacent to Tverskaya Street (e.g. Kamergersky people traffic and became a popular place for retailers of Pereulok, Bolshaya Dmitrovka) attract high pedestrian different types. Tretyakovsky Proezd is occupied by flows as well offering huge retail activity potential and luxury retailers such as Mercury, Dolce & Gabbana, Tom now are primarily occupied by cafés and restaurants. Ford, Ralf Lauren and Brioni.

Cushman & Wakefield | Moscow | 2019 2 MOSCOW MARKET OVERVIEW

KEY AREAS/ TYPICAL RENT CONSUMER RANGE OF UNIT STREETS/ MAJOR RETAILERS PRESENT FOR 150 SQM UNIT PROFILE SIZES (SQM) SHOPPING CENTRES (RUB/ SQM/ YEAR)

Mass market. The busiest Moy Auchan, Bosco, AV Daily, United Colors of Benetton, Tverskaya Street 60,000-150,000 100 - 1,750 street in Moscow That’s Living

Agent Provocateur, Bulgari, Burberry, Calvin Klein, Cartier, Luxury brands, mid-upper Coach, Dior, DKNY, Etro, Fabi, Falke, Fendi, Freywille, Furla, GUM 100,000 -250,000 50 - 500 brands Gucci, Hermes, Louis Vuitton, Marella, Marina Rinaldi, Max Mara, Max & Co, Miu Miu, Moncler

ZARA, Uniqlo, Pull&Bear, Stradivarius, Colin's, Swarovsky, Mango, Adidas, Bershka, Armani Exchange, Calvin Klein, Okhotny Ryad Mass brands 150,000 – 190,000 50 - 800 Converse, GAP, Pandora, Superdry, Swatch, Victoria’s Secret, Helly Hansen Calvin Klein Jeans, ZARA, Hamleys (1,700 sqm), Pull&Bear, Evropeisky Mid-upper and mass brands Bershka, Stradivarius, Massimo Dutti, Marks & Spencer, 200,000 – 250,000 50 - 2,500 Mothercare, Lacoste, Mango, Topshop, Uniqlo

Hamleys, ZARA, H&M, Mango, Uniqlo, Bershka, Nike, Metropolis Mid-upper and mass brands REEBOK, Lacoste, Superdry, Zara Home, Pull&Bear, LC 100,000 - 150,000 50 - 2,500 Waikiki, Crocs, OYSHO, Guess, Colin’s, Marks & Spencer

MEGA malls Auchan, MEGA, IKEA, OBI, Colin's, Mango, Marks & Spencer, (MEGA Khimki, MEGA Belaya Mass brands Massimo Dutti, Furla, MAC, Marks & Spencer, Mothercate, N/A 50 - 7,000 Dacha & MEGA Teply Stan) Pandora, Pull and Bear, U.S. Polo Assn., Uniqlo Auchan, OBI, Hoff, Massimo Dutti, Modis, Pull&Bear, Bershka, Mango, Tommy Hilfiger, ZARA, H&M, Uniqlo, Armani Aviapark Mass brands 80,000 – 120,000 50 - 11,000 Exchange, Stradivarius, cacharel, Calvin Klein, Converse, crocs, Falke,

Cushman & Wakefield | Moscow | 2019 3 MOSCOW SHOPPING CENTRES

OKHOTNY RYAD METROPOLIS

One of the first professional retail schemes in Moscow Metropolis is considered to be one of Moscow’s ultimate opened in 1997. It is an underground shopping centre shopping and entertainment destinations with a selection located right in the centre of Moscow, next to the Red of well known international brands. It is conveniently Square. Due to the central location and presence of mass- located at a major transportation hub between the airport market brands, the centre always has high footfall. and the city centre, close to a metro station. It is home to over 250 shops and the majority of retailers would prefer to enter the mall. The extension of Metropolis opened in 2016, which increased the GLA from 80,000 sqm to 120,000 sqm. The extension is connected to the Moscow EVROPEISKY Central Circle station; passengers have a direct The centrally located Evropeisky, which opened in 2006, connection from the railway station to the metro station is one the most popular shopping centres in Moscow. It is through the shopping centre galleries, which increases the located near the Kievsky train station and the busy footfall. Kievskaya metro station. Its popularity with Moscow consumers provides retailers with some of their highest sales turnovers in Moscow. MEGA

One of the first international developers, which entered the Russian market in the 2000s, was IKEA. It has AVIAPARK become one the largest retail developers in Russia with MEGA mall super regional projects. There are 3 MEGA Aviapark is a shopping centre which opened in 2014 with malls located in the Moscow suburbs. Many international a GLA of 230,000 sqm - the largest shopping centre in mass market brands are present in these shopping malls. Russia and Europe. The mall has four levels and a two- Even though the scheme was opened more than 10 years level car park. Anchor tenants include Auchan, Hoff, OBI, ago, the shopping center is still up-to-date due to Decathlon, large fashion gallery and Karofilm, one of the continuing renovations. Having IKEA as a unique tenant biggest cinemas in Russia. The first Kidzania gives the shopping center a competitive advantage. entertainment centre opened there and is very popular among visitors.

Cushman & Wakefield | Moscow | 2019 4 MOSCOW OUTLET CENTRES

OUTLET VILLAGE BELAYA DACHA FASHION HOUSE OUTLET

(GLA – 32,000 sq. m) was the first factory outlet The first phase of the project of an international developer development in Russia opened in 2012 by Hines. - Fashion House Outlet (GLA – 19,500 sq. m) was opened in 2013. The outlet is fully covered under the roof, which is suitable in Moscow climate conditions. The retail scheme is still in the process of development – the third phase of VNUKOVO OUTLET VILLAGE the project is planned.

The first phase of the project was opened a year after Outlet Village Belaya Dacha - in 2013.

OUTLET CONSUMER F&B AND LEISURE RANGE OF RETAILERS PRESENT CENTRE PROFILE TENANTS UNIT SIZES

Outlet Village Trendy fashion- Tommy Hilfiger, Meucci, Michael Il Pario, Shokoladnitsa, 30-1,000 sqm Belaya conscious shoppers Kors, Freywille Guess Shooga Cafe Dacha

Vnukovo Albione, Calvin Klein, Cacharel, Trendy fashion- Trattoria, Coffee Mania, Outlet Caterina Leman, New Balance, 30-1,000 sqm conscious shoppers Chicken Roll Village Tommy Hilfiger

Baldinini, Benetton, Cacharel, Fashion Trendy fashion- Calvin Klein, Furla, Fabi, Mango, Shokoladnitsa, Il Patio 30-1,000 sqm House conscious shoppers Levi’s, Max Mara

Cushman & Wakefield | Moscow | 2019 5 DEVELOPMENT TO WATCH OUT FOR

DREAM ISLAND

Total Scheme Size 292,000 sqm

- Retail 70,000 sqm

Planned Opening Date Q4 2019

Consumer Profile Mass market

ABOUT THE DEVELOPMENT

The shopping center is going to be a part of the first in Europe and the only in Russia indoor children’s theme park. The development is located on the Moscow River shore,10 minute-drive away from Kremlin. Dream Island includes amusement park with various attractions, promenade with concert hall and multiplex, landscape park, riverwalk and hotel.

MOSCOW NEW DEVELOPMENT WATCH

Cushman & Wakefield | Moscow | 2019 6 MOSCOW FOOD & BEVERAGE

Moscow is the most actively developing Along with the growth in the number of fast-casual F&B market in Russia, and all new trends establishments, a new format for the Russian market has start from here. emerged: food halls. 8 new concepts opened during last 3 years, and more and more projects are being announced. Relatively new for the market, the fast-casual format has Over the past few years, the street reconstruction been actively developing for the past three years, programme in Moscow, aimed at expanding the although its market share is below 1%. The increase is pedestrian areas and limiting parking in the centre, has caused by changing consumer behaviour; a growing led to a change in tenant profiles on shopping streets. Due ‘foodie’ culture and the value of the eating experience. to the increased pedestrianisation, many cafes and Also, due to a decline in incomes, customers have restaurants have taken the place of clothes, shoes and swapped from fine-dining restaurants to lower value accessories shops. Catering establishments now occupy options. the bulk of retail space on shopping streets in the city centre.

Cushman & Wakefield | Moscow | 2019 7 MOSCOW FOOD & BEVERAGE MARKET OVERVIEW

RENT FOR 200- KEY AREAS CONSUMER PROFILE FOOD & BEVERAGE OPERATORS 300 SQM UNIT (RUB/SQM/YEAR) Longstanding pedestrian Dve Palochki, Akademia, Le Pain Kuznetskiyi Most / entertainment area. Quotidien, Prime Cafe, Bolshoi, Costa 70,000-200,000 Kamergerskiy Fashionable district in the Coffee, Krispy Kreme, The Most, Chips, historical city centre. Cherdak, Vogue, Dante BQ Cafe, Luisiana, Le Pain Quotidien, Lively retail and leisure Easy Brix, Bjorn, Cheretto, Paul, Taras Pyatnitskaya district, surrounded by areas 50,000-110,000 Bulba, Meatless, BB&Burgers, Est’ of business activity. Khinkali Pit’ Vino, Molly Gwyn’s Aloha Bar, Dream Bar, Babetta Café, Dve Historical city centre with Palochki, Marketplace, Krispy Kreme, Myasnitskaya large number of restaurants 40,000-100,000 Prime Café, Burger King, KFC, and cafés of varying quality. McDonald’s

Longstanding pedestrian McDonald's, Starbucks, Le Pain entertainment area. Lively Quotidien, Rukkola, Hard Rock Cafe, Mu- Arbat 60,000-120,000 retail and leisure district. Mu, Dunkin’ Donuts, Shake Shack, Traditional tourist destination. Teremok, Shokoladtnitsa

Food Market 21, Black Star Burger, Obed Actively developing F&B Bufet, Teremok, Dve Palochki, Zhiguli, Novy Arbat zone, which got ‘a new life’ 60,000-100,000 Barashka, Kitayskie Novosti, Burger after reconstruction. Heroes, Chesterfield, Chaihona

Central Market, Propaganda, McDonald’s, Centrally located historical CoffeMania, BB&Burgers, Teremok, Kleb I Maroseyka/Pokrovka district with a lot of mid-price 30,000-80,000 Vino, MosDoner, Pita & Suvlaki, Saperavi, bars, restaurants and cafés. Harat’s pub, I like wine, DoubleB Pedestrian street that starts #FARSH, Ryby net, Papa’s Place, Le Pain from the Red Square. Quotidien, Beverly Hills Diner, Krispy Nikolskaya 80,000-150,000 Crowded with people, Kreme, Varenichnaya #1, Teremok, especially with tourists. Baccarat Cristal Room Several cultural Central Market, Black Star Burger, establishments, shopping BB&Burgers, Krispy Kreme, Buddha Bar, Tsvetnoy Boulevard 70,000-100,000 centres and business centres Probka, The Mad Cook, Valenok, are located in the area. People&Pasta

Cushman & Wakefield | Moscow | 2019 8 OXANA MOSTYAEVA Head of Retail Ducat Place III 6th Floor; Gasheka St. 6; Moscow, Russia 125047 Tel +7 916 181 7429 [email protected]

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