MOSCOW — Shoppers who find that 250 stores aren’t enough can go ice skating, watch movies or even ride a carousel, all under a single roof.
While it sounds like the Mall of America, this mall is outside Moscow, not Minneapolis.
“I feel like I’m in Disneyland,” Vartyan E. Sarkisov, a shopper toting an Adidas bag, said recently while making the rounds of the Mega Belaya Dacha mall.
Instead of bread lines, Russia is known these days for malls. They are booming businesses, drawing investments from sovereign wealth funds and Wall Street banks, most recently Morgan Stanley, which paid $1.1 billion a year ago for a single mall in St. Petersburg.
One mall, called Vegas, rose out of a cucumber field on the edge of Moscow and became, its owners say, larger than the Mall of America if the American mall’s seven-acre amusement park is not counted in the calculation of floor space.
A few offramps away on the Moscow beltway, another mall scored a different kind of victory: the Mega Tyoply Stan shopping center drew 57 million visitors at its peak in 2007, well ahead of the 40 million annual visits reported by the Mall of America.
As American malls dodder into old age, gaptoothed with vacancies, Russia’s shopping centers are just now blossoming into their boom years, nourished by oil exports that are lifting wages.
“It’s 1982 all over again in Russia,” said Lee Timmins, the country representative of Hines, a Texas-based real estate group that is opening three outlet malls in Russia, referring to the heyday of the American mall experience. Russians, he said, love malls.
The mall boom illustrates an extraordinarily important theme in Russian economics these days. The growing crowds at malls, and the keen interest in Russian malls on the part of Wall Street banks, are signs that the emerging middle class that made up the street protests against Vladimir V. Putin in Moscow last winter is becoming a force in business as well as politics.
Investors, who with money at stake are a bellwether of the new trends, are not waiting for the next round of protests; they are already placing bets on the rise of a broad affluent class in Russia.
“Over the past 10 years, Russia has turned into a middle-class country,” Charles Slater, a retail analyst at Cushman & Wakefield, a commercial real estate consulting firm, said in an interview. “What better to do than go to an enclosed, warm environment with many things on offer, whether that be bowling, cinema or food courts, things the customers have not been used to in the past?”
Moscow now has 82 malls, including two of the largest in Europe, according to the International Council of Shopping Centers, a New York-based trade association. Both are owned by Ikea Shopping Centers Russia, the branch of the Swedish assemble-it-yourself furniture franchise that manages 14 malls here. In Russia, malls are still novel; the first Western-style suburban mall opened in 2000. They are now changing hands as developers sell to institutional investors, like Morgan Stanley, shedding light for the first time on their eye-popping values.
At the core of the attraction for investors is the rising disposable income of Russians, nudged along by policies favoring the middle class, lest their challenge to President Putin’s rule intensify.
Russia has a flat 13 percent income tax rate. Most Russians own their homes, a legacy of post-Soviet privatizations, and so pay no mortgage or rent. Health care is socialized.
Not surprisingly, then, Russians have become fanatical shoppers. Russians spend 60 percent of their pretax income on retail purchases, a category that includes food, according to Jones Lang LaSalle, a real estate consulting firm. The country in second place in Europe is Sweden, where retailing accounts for 40 percent of total private spending. Germans, by comparison, spend 28 percent of their salaries shopping, according to Jones Lang LaSalle.
Malls, where the secrets of Western capitalism were finally peeled open and laid bare, with fast food, clothes, ice rinks, electronics and appliances wherever the eye falls, have mesmerized shoppers here — much as they did in their early years in the United States, from the 1960s to the 1980s.
Olga N. Zaitsova, 55, who was in the Mega Belaya Dacha mall with her granddaughter Anastasia, said she came every weekend, drawn by the warm play area for toddlers. “It’s just not comfortable to be outside when it’s so cold,” she said.
When she shops, she said, “now we buy things we want, not things we need.”
With a Mall Boom in Russia, Property Investors Go Shopping
This article
With a Mall Boom in Russia, Property Investors Go Shopping
can be opened in url
http://newsejection.blogspot.com/2013/01/with-mall-boom-in-russia-property.html
With a Mall Boom in Russia, Property Investors Go Shopping
