Investment in new Vegas malls hits $900M
The expansion of Crocus Group’s presence on Moscow’s shopping center scene is continuing, with investment in the developer’s Vegas brand of malls reaching 30 billion rubles ($928 million), real estate firm Cushman and Wakefield announced last week, irn.ru reported.
The original Vegas – currently the largest shopping mall in Russia, at 480,000 square meters – opened in November 2010 in southern Moscow at the intersection of the Moscow Ring Road and Kashirskoye Shosse.
New locations to the west of the city, at Crocus City in Krasnogorsk and between Rublyovo-Uspenskoye and Mozhaiskoye shosses in Kuntsevo, are looking to attract a wider range of consumers than the luxury demographic targeted by the current Crocus City Mall.
“If brands such as Prada, Chanel, Lamborghini, Miu Miu – that is, luxury segment brands – are on offer at Crocus City Mall, aimed at an exclusive clientele,” said Charles Slater, head of retail services at Cushman and Wakefield, “then Vegas Crocus City , as a super-regional shopping and entertainment center will offer brands of the mass-market segment.”
The Kashirskoye Shosse Vegas includes over 300 stores: anchors such as Auchan and Tvoi Dom, and smaller tenants like Zara, Next, H&M, New Balance and The Body Shop.
Konstantin Kovalyov, managing partner at Blackwood real estate agency, agreed that Vegas Crocus City would not compete with the upmarket Crocus City Mall.
“Rather the reverse: the new shopping and entertainment center will strengthen the synergetic effect of the components of the Crocus City complex,” Kovalyov told The Moscow News. “Taking into account the experience of the developer’s operating shopping centers in Moscow, we can expect that the new objects will be characterized by a competently designed conception, a quality set of tenants, and interesting decisions on the architecture and interior.”
Localization
The creation of a “city within a city,” as Slater described it, is at the heart of Crocus City, including the Crocus City Mall, the Crocus Expo center and the Crocus City Hall concert venue. For the Vegas brand, however, localization is another key feature, building a connection with residents in neighboring areas.
“The new complexes Vegas Crocus City and Vegas Kuntsevo have a high potential to become strong centers of attraction, to form local social-cultural centers,” said Mikhail Sverdlov, senior director of retail real estate at Cushman and Wakefield, BFM.ru reported.
New residential complexes, developed either independently or by Crocus Group itself, are also being eyed by the developer as a source of a growing local customer base.
“The target customer base living in the primary zone of Vegas Crocus City, according to our analysts, is 390,000 people; for Vegas Kuntsevo, 312,000,” said Olga Antonova, head of the rental department at Crocus Group, BFM.ru reported. “Counting the construction of residential complexes in the immediate future, within three years, these numbers will probably increase by 30 percent on average for both areas.”
Design awards
The innovative features of the Vegas brand extend to design, with the flagship earning top prize in the “large shopping center” category of the Commercial Real Estate Awards in 2011, and Crocus Group itself winning Developer of the Year, BFM. ru reported.
The mall’s thematic design, which features five distinct sections, are going to continue at the new projects, with Vegas Crocus City featuring replicas of New York’s Rockefeller Center and Times Square, plus a skating rink snaking around cylindrical aquariums.
The ride attractions at Vegas, including a London Eye-style Ferris wheel and a drop tower, will be matched at Vegas Kuntsevo by XVenture, an active leisure zone that will include a two-level velodrome.
“The main idea [behind X-Venture] was to present something new to visitors,” Slater told The Moscow News. “Additionally, an athletic component is taking shape in the surrounding area, so the second idea was the support of the particular features of that area of Moscow – the Krylatsky Sports Complex, for example – taking into account the needs of the immediate area.”
Finances and completion
Thirty percent of the space at both projects has been rented according to contracts, said Crocus’s Antonova, BFM.ru reported, with an additional 40 percent at the signing stage.
Cushman and Wakefield’s Slater is confident that the pace of construction will go forward as predicted – a press release on the current Vegas mall’s website cited a completion date of March 2013 – despite the economic crisis.
“The developer already has construction experience and experience in completing a project in a crisis period, and has a partnership with a leader in the banking sector,” he said. “So it understands its strengths and capabilities, and has declared a realistic timeframe.”
Crocus is counting on a recoupment period of eight years, Slater added, “which, for the Russian shopping and entertainment center market, is a positive prognosis.”
Подробнее: THE MOSCOW NEWS