According to official statistics, total retail sales in St. Petersburg for January-May 2007 increased by 20.2% as compared to the same period of the previous year, totalling RUR 157 557 million. Public catering sales reached RUR 7 767 million, 18.4% up from the same period of 2006. Real monetary income of St. Petersburg population for January-April 2007 grew by 6.6% as against the relevant period of 2006.

The total area of St. Petersburg shopping centers as at end of June 2007 amounted to 2.99 million sq. m. The Primorsky District and the Vyborgsky District have maintained their leadership in terms of shopping space supply (see Figure 1).

Figure 1. Operational Shopping Centers Market Structure (by Total Area) as at End of June 2007

Source: Colliers International

During the first six months of 2007, 12 shopping centres with a total area of 298 000 sq. m. were put into operation (see Table 1), which is 30% less than in the same period of 2006 (400 000 sq. m.).

Table 1. Shopping Centers Opened in January-June 2007

* - including underground parking

The shopping space supply per 1 000 inhabitants of St. Petersburg totalled 288 sq. m.

There were no significant fluctuations in the shopping centre vacancy and rental rates registered in January-June 2007.

Figure 2. Distribution of Total Operational Shopping Centres Space by District as at End of June 2007

Source: Colliers International

According to our estimates, most shopping centres scheduled to be opened in 2007 will be opened in the second half of 2007 (see Table 2).

Table 2. Major Shopping Centers Scheduled to be Opened in Second Half of 2007

Source: Colliers International

Figure 3. Distribution of Total Shopping Space under Construction by District as at End of June 2007

Source: Colliers International

SIGNIFICANT EVENTS

New Projects:

• By 2008, the company Transas will open a separate interactive complex of the Transas-Force chain with a total area of 3 000 sq. m. in St. Petersburg. Investments are expected to top $ 4.5 million.
• The Moscow-based company Odezhda 3000 intends to develop its own chain of clothing stores Modis. It plans to open 25 monobrand stores by the end of 2008 and increase the number of centers up to approximately 120 by the end of 2009. Investments into the project will amount to roughly $30-36 million, given the average area of 1 500-3 000 sq. m. per one store. The first store of the chain has already opened in St. Petersburg in the shopping and entertainment center Rodeo Drive.
• The Central Real Estate Agency (CAN) is to become a co-investor in a shopping and entertainment centre in the North of St. Petersburg on a land plot located along the Vyborg Highway close to the intersection with Suzdalsky Prospekt. According to CAN plans, the total area of the centre will total 40 000 sq. m.
• The company Eurogarden has publicly announced the launching of a garden center chain project named Green Country. Eurogarden develops in partnership with one of the largest European retail operators of garden centres. The opening of stores is scheduled for the second quarter of 2008. By 2009, it is planned to increase the number of garden centers operating in Moscow and St. Petersburg up to six. One Eurogarden centre is currently being built in St. Petersburg.
• The developers Etalon LenspetsSMU are constructing the shopping center Aura on a 1.3 ha site in between Primorskoye Highway and Lakhtinsky Prospekt. The three-storey centre with a total area of approximately 14 300 sq. m. is to be opened in autumn of 2008. The total project cost will amount to approximately 22 million. The future shopping centre is being positioned as a Premium-class Interior Goods Design Centre.

New Brands and Operators:

• The St. Peterburg product retail market is about to acquire a new player. The Kaliningrad-based retail chain Wester intends to open three hypermarkets in the city within a couple of years. In two years, it is planned to build two hypermarkets in St. Petersburg and to open another one in a building taken on lease, with investments in each amounting to about $6 million. The area of each store will be in the range of 4 000-20 000 sq. m., with up to 90 000 product items represented therein.

• Africa Israel Investments Ltd., a company managing real estate projects in Russia, USA, Europe and Israel, signed an agreement for the construction of a 22 000 sq. m. shopping centre in St. Petersburg. The company plans to complete its first St. Petersburg project in 2008.
• Developers Diversified, one of the largest US developers, announced its plans to enter the Russian market. It will establish a joint venture with the German company ECE for construction of shopping centres in the Western part of Russia and in the Ukraine. Within five years, its own investments will reach $300 million, and, when considered together with loans, this amount will increase up to $1.2 billion.

Multifunctional Complexes:

• The developer Jensen Group will spend $100 million to develop three projects in St. Petersburg. On a 14 ha site, it is planned to erect the multifunctional complex Petrovsky Arsenal with a total area of 140 000 -150 000 sq. m., with 80 000 sq. m. out of this number assigned for residential purposes and the rest taken by offices, shopping, entertainment and wellness facilities. The company has also acquired a 54 ha land plot in proximity to the part of the Ring Road under construction near to the town of Lomonosov. Furthermore, Jensen Group is negotiating the acquisition of the Sosnovskoye pedigree farm in St. Petersburg. This territory will be also used for development purposes.
• LSR Group has started the construction of a multifunctional complex with a total area of 200 000 sq. m. on the territory of the former plant Electric (7.3 ha) at 10 Medikov Prospekt. More than 60% will be occupied by class А offices, and the rest by shopping and entertainment facilities (stores, restaurants and a fitness center). Investments in the project are estimated at $600 million. The opening is scheduled for 2013.
• The holding company Clover Group presented its project of the multifunctional complex Clover Plaza with a total area of 315 000 sq. m. on the Ushakovskaya Embankment. The complex will include a class A business centre (72 000 sq. m.); a shopping and entertainment centre (30 000 sq. m.); a residential area (90 000 sq. m.); a 4-star hotel for 150-180 rooms to operate under the Holiday Inn brand; an apartment hotel for 120 rooms, as well as a parking lot for 2 500 cars (96 100 sq. m.). The project cost is estimated at $0.5 billion. The opening is scheduled for 2011.