Moscow Malls Open Half-Empty as Retailers Struggle, Study Says

Shopping malls have been opening in Moscow less than half-full this year as retailers from Adidas AG to Stockmann Oyj scale down in Russia, according to Colliers International, a property consultancy.

Malls that opened during the period had occupancy rates of 30 percent to 40 percent, despite having tenant agreements for as much as 80 percent of the premises, Colliers said in a report Friday.

That discrepancy is because some cash-strapped retailers are struggling to find financing to furnish stores, the study said. Fashion stores and restaurants have been hurt the most by Russia’s economic woes and the ruble’s slump, according to the consultancy. Clothing brands including Herve Leger and Lindex exited the Moscow market in the first half, along with fast-food chain Carl’s Jr., the consultancy reported.

Overall vacancies at Moscow malls doubled from a year earlier to 7 percent in the first half, Colliers said. The rate will reach at least 8 percent by year-end, Colliers said.

Food discounters including PJSC Magnit, PJSC Dixy Group and X5 Retail Group NV’s Pyaterochka have seen stable demand and have been expanding their store networks, Colliers said. Leroy Merlin, Yum! Brands Inc.’s KFC, Fast Retailing Co.’s Uniqlo and Metro AG have recently reiterated their commitment to expanding in Russia, according to the report.