Shopping centers

Royal Park

Tenants

Among the anchor tenants are the KORA supermarket, CINEMA Park multiplex cinema, Tekhnosila consumer electronics store, and PAPAYA children's goods store. Some other tenants are the first ESPRIT clothing store in Novosibirsk, O'stin, Sephora perfume and cosmetics store, Byeliy Veter Digital, and Evrodom, among others.

Leasing rates, vacant spaces

The average leasing rates have declined 10-15% because of the crisis. Operating costs have not been changed. At the moment there are no vacant spaces, and the owners have a long waiting list of tenants. The crisis has caused some tenants to leave the shopping center, mostly those in the luxury segment – an expensive watch store, gifts shop, etc., because of the specificity of demand fluctuations. The average flow of visitors on weekdays: 15-17 thousand people a day, weekends this reaches 23-27 thousand per day.

Financial Indicators

Total volume of investments into construction came to 1.95 billion rubles. Estimated payback period is 5 years. Operating expenses per sqm are $80 per year, excluding VAT.

Stolitsa Shopping Center

Leasing rates, vacant areas

According to the company, the average leasing rates have dropped by 15-30% during this crisis. Average leasing rate before the crisis was in the range of $1200-2300 per sqm per year. Now it is in the range of $1000-1900. Vacancy rate stands at 3% today (on August 30, 2008 it was less than 1%). Anastasia Balmochnyh, director of commercial real estate at LCMC (exclusive consultant for the project), adds that in September-October 2008 (the peak of the crisis) the 3rd floor was fully vacant. Now there is a waiting list of tenants for that area. Operating expenses have remained unchanged, according to company reports.

Tenants

At the peak of the crisis, there was some rotation of tenants. Such stores as Expeditsia and Voltaire left the shopping center. The main reason given for the termination of the lease was financial difficulties faced by the retailers. Since there is a waiting list of tenants, the management company does not feel that it is necessary to significantly reduce leasing rates, says Anastasia Balmochnyh. But the management company tries to understand the needs of its loyal tenants. For example, in January 2009, when the retail market showed no signs of life, a one-month's deposit was credited as the January lease payment for those tenants experiencing financial difficulties, she adds.

Financial indicators during the crisis period

Gross income of the facility without VAT (lease, maintenance, utilities, advertising) - 5,898,305 USD / year Expenses, without VAT - 1,027,200 USD / year. Gross profit (before income tax) – 4,871,105 USD / year Capitalization ratio - 7.00% Project appraisal, without VAT - 69,587,215 USD Price per one sqm of total area, excluding VAT - 5,155 USD/sqm

MEGA Belaya Dacha

Leasing rates, vacant spaces

Leasing rates at Mega Belaya Dacha are not made public, as company reps site the confidential terms in their agreements with tenants. “All questions regarding leasing rate reductions or changes in terms, etc. are solved on an individual basis with our tenants. Individual support programs are developed if they are needed,” says Irina Johansson, public relations manager of the MEGA family shopping centers.

Information about the customer traffic flow is also being kept under wraps. However, according to their press service department, the number of visitors has not diminished with the economic crisis. “We did not need to develop any special anti-crisis offers, we are simply sticking to our overall operating strategy, which include active marketing, 'seasonal' promotions, advertising and PR support,” says Irina Johansson.

Tenants

The owners of the center believe that in any crisis, a tenant gets feedback from the marketplace, which confirms the strength or weakness of his concept and/ or his brand and sees how loyal his customers really are. “We do not wish to generalize the reasons why certain stores have closed their doors, says Johansson. In most cases, this is just a natural process that accompanies any economic situation, and tenant rotation is a common process for all shopping centers. You could say that during an economic recession the situation is different for every business.”

Financial Indicators

The company has reviewed all its expenses. Optimization plans have been implemented to reduce utility and electricity bills. The operation life cycles of technical systems increased. Shuttle buses from the subway stations to all company complexes are no longer free. Supervision over facility management has become more stringent.

Torgoviy Kvartal

Tenants

Major tenants are Perekrestok (supermarket), Snezhnaya Koroleva (clothing store), M.Video (household appliances and electronics), Detskiy Mir, the shoe stores – Carlo Pazolini, Salamander and Geox, and clothing boutiques O'stin, Sela, Henderson, Wool Street, Westland, Camelot, Tvoyo, Kira Plastinina, etc.

Tenants, which have left the facility recently include: Dzintars, O'Shade, Olsen, Betalink, Adamas, Pur Pur, Finn Flare, Wool Street and LTB. The reasons are varied. Some companies have gone bankrupt, as Pur Pur and Betalink. Some, such as Wool Street, decided to scale down their regional network. But the majority of tenants who have left were the local franchisees, or those who could not correctly build their sales volumes or replenish sold goods, or ones who closed their outlets because credit resources for the procurement of new collections became scarce. New tenants which have come: STEP, Diva, Expeditsiya, Style Park, Betty Barclay, M.Reason and DEVORE.

Leasing rates, vacant areas.

According to the Torgoviy Kvartal development company, the average leasing rate reductions were approximately 25% during the crisis. Average leasing rates in shopping centers (inclusive of anchor tenants) were around $353 per sqm per year before the crisis, and during a crisis – $263.

Operating and maintenance costs remain unchanged at $120 per year. The vacancy rate has changed though. Before the crisis it was 1%, and today it is up to 5%. The number of the visitors per month was 305,000, during the crisis – 260,000.