As at the end of September 2007, the total area of shopping centres amounted to 3.15 million sq. m., with the gross leasable area being 2.04 million sq. m. The increase in shopping space¹ registered in 3QU 2007 is comparable to the same period of the previous year: from July to September 2007, the total floor space rose by 135 750 sq. m.
(July-September 2006: 135 000 sq. m.), see Chart 2. As regards the supply structure, there were changes in the shares of shopping centres, DIY-centres and Cash&Carry (as at the end of the first six months of 2007: 70%, 8% and 7% respectively), see Chart 1.

Chart 1. Market Structure of Operational Shopping Centres (by Total Area) as at End September 2007

Source: Colliers International

Chart 2. Increase in Shopping Space (GLA of more than 4 000 sq. m.), Break Down by Quarters of 2007

Source: Colliers International

As at the end of September 2007, the number of retail outlets in St. Petersburg increased by 7, totalling 129, including 64 shopping centres.

Table 1. Shopping Outlets Opened in January-September 2007

* - including underground parking

The shopping space supply per 1 000 inhabitants of St. Petersburg totalled 447 sq. m. as at the end of September 2007 (the shopping space supply in shopping centres being 301 sq. m. per 1 000 persons).
There were no significant fluctuations in the shopping centre vacancy and rental rates registered in January-September 2007.

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 outlets 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 centre 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 centre 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 centres operating in Moscow and St. Petersburg up to six. One Eurogarden centre is currently being built in St. Petersburg, on the Tallinn Highway.
• The developer Etalon LenspetsSMU is constructing the shopping centre 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.
• The company Start intends to open 50 construction hypermarkets throughout Russia within 5-6 years. Two new Start hypermarkets will be built in St. Petersburg, in Bogatyrsky Prospekt and in Rustaveli Street. These projects will become operational no earlier than in 2008. The floor space of one centre will amount to about 25 000 sq. m., with 10 000 sq. m. occupied by foodstuffs trading and the remaining 15 000 sq. m. by a building materials store. Under the company's plan, the St. Petersburg chain will consist of 6 outlets.

New Brands and Operators:

• The St. Petersburg 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.
• One of the world's largest clothing retailers, Hennes&Mauritz (H&M), has decided on the timing of its entrance into the Russian market. The first Russian H&M store will be opened in the second half of 2008 in the shopping and entertainment centre Okhotny Ryad. Meanwhile the company is searching for suitable locations in Moscow and St. Petersburg shopping centres under construction.
• Jeans Symphony developing the JS Casual, Mustang, Pierre Cardin Menswear and Camaieu chains is launching a new retail project. The company will become a new strategic partner of Tom Tailor (Germany) and open franchised monobrand stores of the same name, as well as TT Denim stores. It is planned to open six stores by the end of 2007 and at least another six in 2008. Three stores will be opened in Mega shopping centres in Rostov, Novosibirsk and Samara, the other three - in the Megapolis shopping centre in Moscow, the Baikonursky shopping centre in St. Petersburg, and in the SemYa shopping centre in Perm. The floor space of these stores will range from 180 sq. m. to 350 sq. m. Investments in repair and equipment for the stores will amount to no less than EUR 1 000 per sq. m.
• Mania Grandiosa, operating the chains of elite footwear boutiques Mania Grandiosa and Baldinini, will open the salon complex Il Palazzo Mania Grandiosa in St. Petersburg, at 150 Nevsky Prospekt. This new project includes five stores with a total floor space of more than 500 sq. m. The amount of investments into the project is not disclosed. Apart from Mania Grandiosa and Baldinini stores, the Il Palazzo complex will include a salon of more democratic footwear MG by Mania Grandoisa and a monobrand boutique John Richmond Accessories which will be the first in Russia.

• Developers Diversified, one of the largest US developers, announce 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 company Migros Turk (part of Koc Holding group) announced that it would sell 50% of the Ramstor chain to the Turkish construction company Enka for $542.5 million. At present, Enka owns 100% of the chain.

Multifunctional Complexes:

• The developer Jensen Group will spend $100 million to develop three projects in St. Petersburg. On a 14 ha site in the Kurortny District, on the territory of the Sestroretsk Tool-Making Plant, 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 the proximity to the part of the Belt Highway under construction close to the town of Lomonosov. Furthermore, Jensen Group is negotiating the acquisition of the Sosnovskoye breeding plant 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 340 000 sq. m. on the territory of the former Electric Plant (7.3 ha) at 10 Medikov Prospekt. Class A offices will take more than 60%, and the rest will accomodate shopping and entertainment facilities: stores, a restaurant and a fitness centre. The opening of the complex is scheduled for 2011.
• 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 Holiday Inn hotel for 150-180 rooms; 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.
• Adamant has started the construction of the multifunctional complex Adamant-Park with a total area of 127 000 sq. m. between the Pulkovo Highway and Dunaisky Prospekt. This complex will have several functions: class A offices, a 4-star Sheraton hotel for 360 rooms, a boutique area, a restaurant area, apartments, and a fitness centre. Investments into the project will amount to approximately $200 million. The completion of the project is scheduled for 2009.