Zolotoi Vavilon Junior

Before its completion it was sold along with the first site to Austrian investment fund, Immoeast AG for whom the deal is its first direct investment in the Russian market. The sale price has been estimated at $200 million. In 2009 Immoeast plans to commission a third Zolotoi Vavilon (GLA over 140,000 sqm) which will be the largest shopping center in Moscow.

Bread & Circuses
The Zolotoi Vavilon shopping center opened on the site of a former market in Yasnevo in August 2006. The realization of the project, including pre-project preparations, took two years. According to the developer, Krona-Design, there were no problems during construction. A special design was developed for the second Vavilon which was of course based upon the experience gained during the construction and operation of the first Vavilon. Both shopping centers have the same concept which was developed by Colliers International, and the same anchor tenants – a Perekriostok supermarket and a Luxor multiplex. The retail galleries are 60% identical. Both shopping centers are also managed by Delta-Service and the facility management is carried out by KA Gepard.
The Vavilon fully matches the format of a district shopping center. The anchor is a grocery supermarket and the retail gallery includes stores selling clothing, footwear, convenience goods and a wide range of other services including a bank outlet, chemist’s, optician, travel agency, beauty salon, dry cleaners, manicure studio and photography outlet. The entertainment component is large and includes a 5-screen multiplex, cafe, Zolotoi Arbuz gaming zones, food court with eight operators, sushi bar, Coffee House and Kofetun cafes. There is also a children’s play area.
Today this combination is entirely standard but three years ago, when the project was developed far from all shopping centers, even medium-sized ones could not offer such a range of operators. “Before the opening of the Luxor in Zolotoi Vavilon there were no modern cinemas in Yasnevo. The developer accurately identified its target market and established a clear competitive advantage for several years to come,” says Mikhail Gets, vice president of strategic development at Blackwood. The large entertainment area ensures a steady supply of visitors even during week nights when many shopping centers located in residential districts are empty.

Key Position
Zolotoi Vavilon is located in a densely-populated residential region (200,000 people live nearby) at the intersection of busy transport routes. According to market experts, it has excellent car and pedestrian access and is visually accessible. The transit potential of the region is large and so Vavilon draws in shoppers not just from the surrounding development but also from other regions. Every day more than 10,000 cars travel down Novoyasenevsky prospect and just slightly fewer down Yasnogorskaya St. It is also right next to Yasnevo subway station which is on the Kaluzhsko-Rizhskaya line. Just a few steps takes you from the metro exist to the entrance way to the shopping center. About 70,000 people travel across the station daily.
Zolotoi Vavilon was the first modern shopping center in Yasnevo but the region itself is saturated with high quality retail areas. Apart from MEGA-Teply Stan shopping and leisure center, which is the retail giant of the city’s southwest, a Ramstore has been successfully operating near Belyaevo subway station for several years. There is also the Kaluzhsky shopping and entertainment center near Kaluzhskaya subway station. At the end of 2007 the 72,000-sqm Novoyasenevsky shopping and leisure center must be commissioned near Teply Stan subway station. Naturally a shopping center the size of Zolotoi Vavilon cannot directly compete with retail sites of this scale but that was not the intention of the project’s owners. It was designed as a neighborhood shopping center - a role which it performs superbly, and there are no shopping centers of the same format in the area.
According to Mr Gets, its proximity to the metro station will ensure heavy flows of shoppers from neighboring retail zones even if other retail sites are open. “Zolotoi Vavilon was created as a modern professional retail site geared towards long-term profits. Even if other modern retail sites are built nearby it will remain competitive,” comments Colliers International.

Optimal Balance
In terms of location, there is nothing in the district to beat it but that is not the only reason for the center’s competitiveness. The quality of the concept and construction was recognized by the Russian Council of Shopping Centers which gave it first place in the small shopping centers category.
Delta-Service, the management company for the Vavilon, defines the target market as young people with average incomes. This is the basis that was used to develop the tenant pool. The gallery offers well-known chain brands with an emphasis on clothing for teenagers, Expedetsiya gift stores, nail care products and LUSH natural cosmetics. This would appear to contrast with the anchor, a grocery supermarket. According to Dmitry Ivanchenko, senior analyst at consulting firm RRG, the Perekriostok supermarket is meant for families while the other retail operators are geared towards a narrower range of consumers. “Today this is not impacting its success but in the future the owner may well have to reconcept and reposition the Vavilon,” says Mr Ivanchenko. Nonetheless it continues to fulfill its role as a neighborhood shopping center, ideally located for people on their way to or from work, which makes the presence of a supermarket and services necessary. The main target audience remains the youth, for whom the retail gallery was created.
The architect and designer of Zolotoi Vavilon in Yasnevo is the Russian practice Arkopol, which designed it in the same style as the interior of the Zolotoi Vavilon in Otradnoe developed by well-known Italian firm, Coimpredil, whose previous projects include the French hypermarket chain, Casino. The exterior and construction materials are basic but perfectly suited for a site of this format. According to experts, the value of the project is enhanced by the expensive stores and a complex architectural design was not called for. The brightly-colored panels look attractive and are popular with shoppers.
The equipment and building services infrastructure is state of the art. Like the Otryadnoe Zolotoi Vavilon it uses a YORK Facility Manager system with centralized air conditioning, ventilation, central heating and internal and external lighting which is operated by one person. The cooling system uses energy-efficient technology. It is equipped with a fully automated fire extinguishing system. Tenants are offered the option of an extra power, heating and water capacity.
The shopping center has a good navigation system and there are no extra entrances or dead zones, something which experts identified and criticized in the first Vavilon. The interior layout is well planned and makes optimal use of the available space, for example, Coffee House is located in the area beneath the escalator. A section of the retail gallery on the second floor is visible from the main entrance which encourages shoppers to go upstairs. The Perekriostok supermarket is located on the ground floor along with the mini-anchors - an OGGI clothing store and NIKE sports goods stores, as well as a cosmetics store, chemist’s and dry cleaners. The second floor includes stores selling clothing and footwear, a restaurant courtyard, children’s play area and multiplex. The gaming zone has a separate entrance.
The high attendance levels mean that the 231-space car park is too small but since the bulk of shoppers arrive on foot or by public transport the management company does not regard this as a significant disadvantage.
A large section of the sales area is occupied by the anchor tenants and the car park but the high rental rates for the retail gallery tenants guarantees high income levels. Cushman & Wakefield Stiles & Riabokobylko comments that the cost per square meter average $1,000 per year which is high for a small shopping center in a residential region on the outskirts of the city. Tenants are clearly happy to pay these rates since the retail areas are 100% occupied.