Despite the crisis, over the past six months the retail property market has improved: more than 20 new brands have been brought to Russia, as stated by Natalia Tischendorf, Manager of Romanov Property Holdings Fund, during her speech at the Russian Session held on the 18th of November at MAPIC 2015.
The Russian Session organized by the Impress Media publishing house took place on the 18th of November in Cannes as past of the MAPIC 2015 business agenda. The discussioninvolving Russian and international experts addressed the current condition of the Russian retail property market, ways to respond to new challenges faced by both retail chains and owners of shopping centers, the most effective strategies today, and sources of project finance.
The invited speakers included Natalia Tischendorf, Managing Director at Romanov Property Holdings Fund; Tom Devonshire-Griffin, Managing Director at JLL (Russia & CIS); Andrey Kolokolnikov, Vice President at Morgan Stanley; Evgeny Butman, CEO at Ideas4retail; Brendon O’Reilly, Managing Director of Fashion House Group; Mikhail Urzhumtsev, President at Melon Fashion Group; and Michel Cheze, Real Estate and Development Director at Castorama.
The participants opened the discussion with issue of credit availability. Experts noted that over the past two years U.S. dollar-denominated loans have hardly been provided. “While the interest rates on ruble-denominated loans are too high, developers are not likely to start construction of new shopping centers within the next two years,” said Natalia Tischendorf, Manager of Romanov Property Holdings Fund.
As for the purchasing power, most of the experts concurred that by the end of 2015 purchasing power is expected to fall by 10%. According to Natalia Tischendorf, the situation has improved over the past six months despite the crisis. “More than 20 new brands have come to Russia, which is a positive trend as the number of new players surpasses those who have left this market,” emphasized Natalia Tischendorf.
The reason behind the interest that retailers express in Russia lies in the new opportunities for brand development in the country and more beneficial lease rates. However, only strong brands and multi-brand concepts will be able to grow in the present environment. As Natalia Tischendorf puts it, today many brands enter the Russian market on their own without using a franchise as it was before.
Finally, the participants of the event expressed their opinion on the attractiveness of the Russian market. Apparently, every crisis modifies the industry, and today retailers and developers are looking for new opportunities and strategies for development.