Regional forces

Retail properties remain a flagship of commercial real estate development in Russia; in this respect nothing has changed since the early 2000s. Other segments are still weak and in low demand.

As we can see from the news reel in this issue, the highest development activity takes place in the regions. Feeble activity in Moscow and St. Petersburg can be explained by several reasons, one of them being political uncertainties. The Moscow government has not yet decided on its dealings with commercial real estate market players. As a member of CRE Awards Jury Committee, I'd like to note that for the second year in a row we witness the unprecedented growth of quality of the shopping malls, developed outside of the two capital cities not only by federal players but by local developers as well. Post-crisis development has matured and today regional developers practice a responsible approach to their projects. This particularly regards the location, concept and interaction with tenants.

Another trend of the day is mass outdating of SCs built a decade ago. Most of them are in need of renovation. I subscribe to the statement of Knight Frank's Sergey Gipsh quoted by the author of the cover story. We encountered this problem 1.5 years ago after we bought SC San & Mart in Kaluga. While marketing mechanisms are certainly important, renovation is above all about an updated and relevant concept, a strong pool of tenants, and also full or partial rebuilding. The marketing mechanisms described in the article should be standard for any SC aspiring for success.