300 Retail Centers to Spring Up

City Hall has approved a plan to build 300 new shopping complexes occupying 6.3 million square meters over the next 20 years.

The plan calls for a number of multi-functional centers to be combined to create large plots of commercial property. Under the resolution passed last month, land will be set aside for the shopping centers and, as of July 1, the current land users will not be permitted to initiate major construction projects.

Most of the building will take place in the city's outlying areas. Only 3 percent of the construction is planned for the city center, which City Hall considers already overwhelmed by large stores.

In its volume of large retail centers, Moscow differs considerably from other European capitals. For every 1,000 Muscovites, there are only 36 square meters of space in shopping complexes that meet current standards, according to Jones Lang LaSalle real estate company. Within a year, that indicator has risen almost two times from 20 square meters for each 1,000 people. In contrast, for every 1,000 people in Paris, there are 400 square meters; in London, 275 square meters; in Berlin, 210 square meters; and in Prague, 140 square meters.

Yefim Rybalov, first deputy director of the Moscow government's consumer goods and services department, presented the city's plans and said they were entirely realistic. Sixty-four stores covering 1.5 million square meters are under construction or are in the project stage.

For example, the city has earmarked three plots of land for international company Metro's construction of cash-and-carry centers and around a dozen large supermarkets, all unified in one commercial zone, which will appear on Dmitrovskoye Shosse near the Moscow Ring Road.

The stores on Dmitrovskoye Shosse will be the first example of the city's new design, which the Moscow architecture committee nicknamed the "trading zone." Within the zone, wholesale and retail trade of various goods will have ready warehouse space and service infrastructure, which could include a garage, gas stations, car service, exhibitions and offices.

The plan foresees the establishment of eight such "monster" zones over 20 years covering from 100,000 square meters to 400,000 square meters with good transport options. Besides the trading zone, specialists in the city government established two additional terminals for smaller scale objects: a trading complex that measures from 10,000 square meters to 80,000 square meters and a trading facility from 2,000 square meters to 10,000 square meters.

The consumer goods and services department also plans to develop a project for building shopping complexes outside the Moscow Ring Road. "Although our interests don't always coincide with those of the [Moscow] region, we really want to do this," Rybalov said.

At its own expense, the city plans to develop pre-project documentation and to offer companies that win a tender a plot of commercial property with all the necessary documentation needed to begin construction. This will make investors' lives significantly easier, freeing them from bureaucratic red tape, Rybalov said.

The city government is planning on very large-scale development and it would be a mistake to rely on the active participation of foreign investors, said Maxim Karbasnikov, director of the real estate trade department of Jones Lang LaSalle. "Not much time has passed since the financial crisis, which frightened many people," he said. "However, there is interest, as there are a multitude of Russian companies looking to invest in commercial property. It's very important that the city demonstrates to them its intention to develop its territory."

Vladimir Gruzdev, the chairman of the board of directors of the Sedmoi Kontinent supermarket chain, said his company is satisfied with the city authorities' decision. "Finally, a plan has appeared that will allow trading networks to develop steadily," he said.

Sedmoi Kontinent plans to compete in the tender for purchasing plots of land. The company announced its intentions to open 10 new supermarkets this year for an investment of $40 million.

In addition, three other food-sellers, Perekryostok, Diksi and Kopeika — all members of the Russian retail alliance — have announced plans to open more than 40 stores in the capital. Investment in the business development should exceed $65 million.

The plan for the development of retail trade will be very positive for investors, said Vadim Zuikov, president of the National Trading Association. "The Moscow government is showing [investors] which regions have large consumer potential and are suffering from a shortage of shopping centers," he said.