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. Last Updated: 07/27/2016

Supermarkets Set Pace In Real Estate Industry

Russia's real estate market continues to make great strides. You only need to look around Moscow to see new office buildings under construction and older buildings being renovated to meet demand. While the office sector moves along steadily, it is clear that Moscow's fastest-growing real estate industry is the supermarket and hypermarket sector, which is forging ahead at a feverish pace. Today, some of the most remarkable developments are coming from foreign retailers, who are setting up shop and investing millions in order to get a piece of one of the largest and least developed consumer markets in Europe. The following are some of the most notable projects.

The French retailer Auchan, which owns more than 700 stores in 12 countries and has annual revenues of $22.7 billion, is planning to open an 11,000-square-meter hypermarket at 62 Rublyovskoye Shosse. Additionally, it is anticipated that Auchan will take part in the pilot shopping center at the intersection of Ostashkovskoye Shosse and the Moscow Ring Road, with a total size estimated at 60,000 square meters. The store is part of the Governor's Ring project, a program supported by Moscow Region Governor Boris Gromov to develop large-scale retail outlets near the Ring Road.

Metro AG:
Metro AG is the world's third largest wholesale and retail chain, and German retailer Metro Cash & Carry is the biggest company in the Metro AG holding. There are more than 350 Metro Cash & Carry shopping centers in 20 countries, with Russia being the 21st. Metro AG made yet another step forward by laying the cornerstone in June 2001 of its first outlet in Russia, a $25 million, 10,000-square-meter complex in northwest Moscow.

Also, two Cash & Carry stores are expected to be opened in November 2001: One on Leningradsky Prospekt, with a total space of approximately 30,000 square meters, and the other on Prospekt Mira, with a further 30,000 square meters.

German retail giant AVA laid the cornerstone of its first hypermarket in Russia on May 17, 2001. The $18 million complex is set to open next spring in Kotelniki along the southeast rim of the Moscow Ring Road. The 26,500-square-meter self-service store is expected to employ roughly 700 staff. In addition, a 2,000-square-meter mall will be developed for additional shops and services.

Spar, a Dutch company established in 1932, now has an impressive 16,800 shops in 30 countries, some of them directly owned and others franchised. Stores range in size from 200 to 6,500 square meters with four varying formats. Ninety percent of Spar shops are referred to as "neighborhood" stores (200-450 square meters with parking) due to their location near large housing complexes. Spar has become the latest of the foreign retail giants to open up in Moscow with its $3 million, 1,800-square-meter EuroSpar outlet at 146 Varshavskoye Shosse in the south of the city. The company has plans to invest up to $50 million over the next three years in an effort to establish 30 more stores throughout the country.

The effect of new projects, such as those listed above, will ultimately be to increase competition. And this competition is positive for both the Russia consumer and Russian firms that will help supply thousands of items that will fill the shelves of these stores. It's clear that foreign retailers are looking to invest in Russia, and both the retailer and the consumer will share the dividends.

Chris King is the director of business development for Colliers International, a full-service real estate company with offices in Moscow, St. Petersburg, Kiev, Almaty and Baku.