Analysts at the Center for Economic Forecasting of Gazprombank report that in 2022, only 126,000 sq. meters of retail space were commissioned in Moscow, while in other regions, the figure was 179,000 sq. meters. This is the lowest result in the past 12 years and is also 65% and 67% lower than in 2021, respectively.

Experts attribute the decline in construction rates to three factors. First, there was a postponement of commissioning dates for future periods due to the high degree of uncertainty. Second, stabilization occurred after record volumes of commissioning in 2021 compared to the previous five years. Third, there was a rise in the vacancy rate in existing retail space.

Specialists are certain that a small number of real estate commissioned in 2022 supports the level of vacancies and rental rates. If retail space continued to be available on the market at the same rate, the vacancy rate would grow, and landlords would be forced to reduce prices. At the end of the year, vacant space in Moscow shopping centers reached 16%. Rental rates for anchor tenants and for gallery tenants have decreased by an average of 5-7%.

Due to the outbreak of the military conflict in Ukraine, sanctions, and the departure of Western brands, attendance at the largest shopping centers in Russia decreased by a quarter year-on-year in 10 months of 2022 as empty space grew. Compared to the pre-COVID year of 2019, attendance fell even more, by almost 40%.

It’s not just the largest malls that have problems with attendance. The traffic of large shopping centers with an area of 40 thousand to 80 thousand square meters decreased by 7% year-on-year and by 24% compared to 2019.