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. Last Updated: 07/27/2016

Retail Developers Eyeing Moscow's 3rd Ring Road

The area around the Third Ring Road is seeing a burst of shopping mall construction, according to a new retail report by Colliers International.

The recent completion of the road, located between two other circle roads -- the Garden Ring, which roughly outlines downtown, and the Moscow Ring Road, which delineates Moscow's city limits -- has opened large parts of the capital for redevelopment.

"It offers quality access to huge, largely industrial, territories that were previously virtually inaccessible and unsuitable for commercial real estate development," said Maxim Gasiev, retail director at Colliers.

And with virtually no good land sites left for construction in the historic center, the area around the Third Ring Road may be the next hot spot for real estate developers.

It is therefore not surprising that this part of the city is seeing more and more ambitious real estate projects, many of them on the grounds of former factories and other industrial facilities.

For example, the 92,000-square-meter Rio shopping mall, located on Bolshaya Cheryomushkinskaya Ulitsa, immediately south of the new road, is scheduled for a late April opening on the site of a former garage. Right next door, Turkey's Ramenka is building a 55,000-square-meter Ramstore hypermarket, which should open in late 2005.

There are also plans to build a 60,000-square-meter mall on the territory of the Mosinzhbeton concrete factory on Kozhukhovskaya Ulitsa, on the ring road's southeastern edge.

At least three more large development projects were announced for the area in the first quarter of 2005. By late 2006, the city's Cold Storage Complex No. 1, located on Verkhnyaya Krasnoselskaya Ulitsa in northeastern Moscow, is to be replaced by a new, 118,000-square-meter mall.

Work is also about to begin on a massive 450,000-square-meter mixed-used development, featuring a hotel, offices and retail, on the spot of the Ordzhonikidze machine tool plant near the southern segment of the road.

Another development is the 400,000-square-meter office center at the intersection of Kutuzovsky Prospekt, scheduled for completion in 2010. The center also includes a retail component.

"In terms of retail development, the Third Ring Road offers unique opportunities. On the one hand, land there is still relatively cheap. On the other, it is relatively central and can be easily accessed," Gasiev said.

Overall, the Third Ring Road is characterized by insufficient housing to generate enough local demand for retail projects, said Olga Kozlovskaya, head of research at the Magazin Magazinov retail consulting firm.

Gasiev noted that a lack of residential areas meant that developers would be concentrating on large shopping projects at the expense of smaller ones that cater to local inhabitants.

"Almost all demand will come from drivers. And since on their way they will most likely be encountering several malls, the latter's attractiveness for shoppers will be based on their size and tenants," Kozlovskaya agreed. For the same reason, a project's success may depend on its parking and road access, she said.