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. Last Updated: 07/27/2016

Eastern Europe's Largest Mall Opens on MKAD

Itar-TassTrees imported from Florida and artificial palms line the shopping and entertainment center's 150,000 square meters of space.
Eastern Europe's biggest shopping and entertainment center, the 150,000-square-meter Mega Mall, opened in southern Moscow on Thursday.

The mall, with major retailers such as Swedish furniture maker IKEA and French supermarket chain Auchan, is expected to attract 25 million visitors a year and handle up to 170,000 visitors on peak days.

By next summer, the mall will also have the country's largest movie theater, and a three-star hotel is in the works.

Developed by IKEA next to its second Russian store at the intersection of the Moscow Ring Road and Kaluzhskoye Shosse, the mall cost some $200 million to build and is expected to generate $675 million in annual sales.

"That's a conservative number," project leader Peter Odlund said at a news conference on Dec. 9 where it was announced similar malls would be built at IKEA's first store in the northern suburb of Khimki and next to IKEA's first St. Petersburg store, which is due to open at the end of 2003.

A total of 150 shops covering 120,000 square meters of retail space opened in the Mega Mall on Thursday. The project's advertising budget is $700,000, Vedomosti newspaper reported.

Geared at families, the mall has a children's play area with a Faberge egg theme and an ice-skating rink. It also features a special tracking system for children who get lost on the 53-hectare site.

Trees imported from Florida and artificial palm trees line the 2-kilometer stretch of storefronts. The food court -- with eight fast-food outlets, seven sit-down restaurants, 19 cafes and seating for 3,000 diners -- is capable of serving 260 meals an hour.

The next biggest mall in Moscow is the 45,000-square-meter Atrium next to Kursky station and the next biggest in Eastern Europe is the 73,000-square-meter Wola Park in Warsaw.

IKEA received a $100 million loan from the European Bank for Reconstruction and Development to develop Mega. Odlund did not disclose IKEA's total investment in the project but said the company does not expect a return for at least four to five years.

IKEA is one of the mall's five anchor tenants, which also include Auchan, Tekhnosila home electronics store, German do-it-yourself store OBI and Rising Star movie theater, a joint venture with U.S. chain National Amusements.

Auchan is to open in the Mega Mall -- its second Moscow store -- on Wednesday.

Frederique Mioche, director for marketing with the French retailer, said the store was not ready in time for the mall's grand opening. "There were certain problems with electricity and gas," Vedomosti quoted Mioche as saying.

Auchan is not the only store not yet receiving customers.

Dmitry Binyevsky of Adidas Russia told Vedomosti the sports store would not open its outlet in the Mega Mall until Dec. 20. "We opened in the Atrium before most other stores and so we operated at a loss," he said. "We are afraid there might be a similar situation here."

The 11-screen Rising Star movie theater -- the largest in Russia -- will not be completed until next summer, at which point, the mall will have 248 retail outlets, Odlund said.

About 20 of the stores are new to the Russian market, said Natalya Oreshina, head of retail at Stiles & Riabokobylko, the local affiliate of Cushman & Wakefield Healey & Baker.

Stiles & Riabokobylko and Jones Lang LaSalle offered consultancy services and were involved in leasing space.

IKEA surveyed other shopping centers in Moscow and set Mega's prices a little lower, said the shopping center's manager, Jeff Kershaw.

Kershaw said the mall would not offer discount cards like some other shopping centers, because this was a disadvantage for those who might visit rarely.

A three-star hotel is also under construction. IKEA's board of directors did not decide to build the hotel until Aug. 15 last year, so construction companies Skanska, Hochtief and Bouygues have some 3,000 workers building the 10-story hotel around the clock, Binnmur said.

"It will probably take about a year to complete, including underground parking," Odlund said.

Odlund said IKEA is negotiating with two international hotel operators and that the 200 rooms would cost about $70 a night.

Maxim Karbasnikoff, associate director and head of retail at Jones Lang LaSalle, predicted only 15 percent to 20 percent of visitors arrive by public transportation or the Mega mall's shuttle bus. The site has 10,000 free parking places.

"It's a family center, and a family usually moves by car," he said.