Vnukovo Village Outlet centre to open 3Q 2012

A new major shopping development is to appear on the Moscow retail scene with the Vnukovo Outlet Village confirming it will open during 3Q 2012.

ґColliers International has announced that it will be handling tenancies for the centre, intended for smart shoppers, from the more than 15 million people living within 90 minutes travelling time from the site, 2 kilometres from Vnukovo airport, incorporating nearly 47 thousand square metres of retail space and parking for more than 2400 vehicles.

Co-owner of the Vnukovo Outlet Village Dmitry Kulkov, says the new shopping venue will provide a completely new shopping experience for Russia`s burgeoning consumer market, with discounters from high street format chains a key focus.

"The outlet format - is a natural process of development of commercial real estate. Our task is to make the most professional outlet centre in Russia that meets all the "canons of the genre." For the successful implementation of the outlet project it is vital to commit to several factors: the right mix of tenants, the location of the project, as well as strict adherence to the rules of doing business in this segment. In particular, tenants should provide the complete collection with enough variety, and maintain prices 30-50% lower than in the usual format stores,"

Kulkov added that the $55-60 million project is expected to pay back over 5-7 years. Galina Maliborskaya, Retail Director at Colliers International, says that the outlet centre format, although quite common in North American, European and Australian markets, is new to Russia, and that other similar projects planned, including a Belaya Dacha Outlet Village, with US Real Estate Investor, Hines, a key player, and a Fashion House Moscow outlet centre located near Sheremetyevo Airport.

Outlets are designed to increase retail chain turnover added Maliborskaya
"The interest to outlet format is growing as retailers recorded double digit growth of profits accumulating almost half of a total retail chain turnover. For instance, the retail turnover per sq.m in European outlets reaches 4000-6000 euro over performing average trade center results."

Experts say that population densities required to support outlet centre in Russia will need to be heavier in than in Europe.

Alexey Mogila, Head of Trade real estate department at Penny Lane Realty, says Moscow is a perfect retail market to examine the opportunities for the new formats
"The outlet format is new and very promising for the Russian retail market. However, we should bear in mind that the success of this format will depend on several crucial factors such as customs issues, logistic and quality of the tenant mix. Vnukovo outlet village in this case should become a bespoke leader among Moscow outlets. First of all, the location of the outlet will perfectly suit retailers and traveling customers. The airport area is highly popular for shopping and it will be additional extension to a duty free zone in terms of clothing retail. The developers are high level professionals and have focused on this project development to achieve maximum similarity to European standards of outlet shopping."

Maliborskaya noted that outlets will have their own distinct customers, and will not have a serious impact on other retailing centres in Moscow, adding that the developers may not be able to achieve the discount rates comparing to European outlets

"This type of discount outlet will not have any deteriorating impact on other major shopping centres in Moscow. The classical trade centre located in the city centre or inside the MKAD is designed to fulfil customer needs for day-to-day entertainment and fast fashion shopping. The audience of the outlet centre will be distinct and various: from tourist and Moscow business visitors willing to buy some clothes or shoes and home stuff frequently in one place not changing planned trips. However, those brands related to premium class retail will be eager to open their stores assuming additional footfall, increase in turnover and total stock sales and of course low rental rates which will help to remain high margins."

sections: Society, Economics