According to Knight Frank Russia's data on Moscow City, the vacant street retail space in the center reached 13,400 square meters in the first half of 2022. This represents 21.9% of the total supply of 61,000 square meters. The majority of this vacant space is divided between three developments: Federation Tower , Northern Tower , and Neva Towers .
Current state of the Moscow-City territory
Today, Moscow-City is home to 425 businesses engaged in trade and services. At least a hundred premises, including the upper floors, remain empty. More than half of the occupied space consists of units with an area of 50 square meters or less.
The food service industry is represented by the largest number of operators (43%) and the largest area covered (38%). Over the past six months, 37 new businesses of this type have opened in the cluster, covering a total of 1,500 square meters. In the first half of 2021, this figure did not exceed 18.
From January to June 2022, the amount of vacant retail space in Moscow City did not exceed 13,400 sq m. This corresponded to 21.9% of the total supply (61,000 sq m). The largest vacancies are found in the Federation, Northern Tower, and Neva Towers. This significant vacancy is due to several factors, the main ones being the recent addition of retail space to the market and the prolonged vacancy of existing unleased premises.
The situation with the distribution of areas
Currently, over 400 companies directly related to trade and services operate in Moscow-City. At least 100 premises, including the upper floors, are considered vacant.
The Federation, which comprises 6,400 square meters of retail space (25.9% of the total supply), is experiencing a high vacancy rate. Formerly vacant retail spaces are currently being actively filled. This is due to the emergence of new businesses:
-
several catering establishments (Drinkit, Spot4 , CoffeePita );
-
beauty salons , barbershops (MASKVA, SpaaX);
-
other tenant profiles.
Vacancy rates in other towers also decreased in the first six months of 2022. For example, in IQ-Kvartal, the decline was 7%. This is attributed to the opening of food service establishments (Lada, I Love Poke), the Lenta store operating in the basement, and other establishments. Compared to the previous year, the vacancy rate in Gorod Stolits has decreased by 3.7%, and by 1.1% over the six-month period. The figure at the end of the first half of the year was 2.8%. This decline was driven by the opening of the Nail Sunny VIP beauty salon, Cofix, Chikho, and other establishments.
Retail zones are particularly popular among operators who provide trade and services in Moscow-City during the day. These include many stores, fitness clubs , medical centers , and others.
At least 38% of the occupied space is used by food service operators, including canteens, restaurants, cafes, and delis. Up to 26.5% is allocated to sports-related businesses. A number of studios and fitness clubs will open in Evolution and Neva Towers during 2022.
Distribution of seats based on the number of operators:
-
first – representatives of the food service industry (43%);
-
the second is enterprises classified as services.
Over half of the occupied space is comprised of units measuring 50 square meters or less. Most of this space is located in underground walkways, allowing for convenient transportation between the complexes. In the aforementioned mixed-use developments, the average retail space is 116.5 square meters, while the average leased space is 112.2 square meters.
Spaces exceeding 500 square meters are primarily rented by restaurants, fitness centers, and medical centers. Spaces under 50 square meters are more suitable for bars, beauty salons, and dry cleaners.
In 2022, four operators began operating on the upper floors of Moscow-City complexes. Two of these are beauty and health salons. During this period, the fitness club at Mercury ceased operations. Nine spaces, totaling 8,200 square meters, are currently listed as vacant.
Expert commentary
Irina Kozina, head of street retail at Knight Frank Russia, notes:
"During the first six months of this year, Moscow-City experienced a rapid recovery in footfall. Business began to emerge from the crisis that arose in 2020 due to the coronavirus pandemic. Restaurants and restaurants increased demand, stimulating an increasing number of improvements in the support retail segment.
Over the last six months, 37 food service establishments with a combined floor space of 1,500 square meters opened. These include the Azur by Edral restaurant, the Poke Face café, and others. During the same period last year, only 18 food service establishments opened, each with a total floor space of 1,000 square meters. Cafés and coffee shops are the predominant formats. Deli-style restaurants offering prepared meals are becoming increasingly popular.
