Russia Growing as Retail Market Leader

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Russia is positioned to pass the U.K. for the first time and become the second-largest retail market in Europe, according to the Cushman & Wakefield's European Shopping Center Development 2013 report. 

France is the leader in European retail space with 17 million square meters, followed by the UK with 16.48 million square meters. Russia now has16.47 million square meters of retail space, Cushman and Wakefield said.  

The European retail market is expected to open 7 million square meters of new shopping centers this year, the most since the 7.8 million square meters added in 2009, C & W reports.

But Russia has been the standout performer, the firm reports.

"Rental rates remain high and continue to favor the property owner but this may change in the near future when1.8 million square meters of quality retail assets get delivered in the regions," Cushman & Wakefield said in the report.

Overall, investment activity in the Russian market hit a record level of $3.39 billion during the first quarter of 2013, reaching almost half of the $8 billion projected for the entire year, C & W reports.

"Although the Russian property market keeps setting new records and there is a clear interest in the regions, the lack of new institutional investors and deficit in quality supply holds it back," Alexander Zinkovski, of C & W research department said in a release.  
 
"Nevertheless, the investment potential of Russian commercial real estate market is high...there should be increasing activity in 2014 when a large number of attractive projects, especially in retail and warehouse sectors, get delivered across Russia."