Russian Shopping Malls 'May Face Bankruptcy' This Year: Forbes

By Steve Wynne-Jones
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Russian Shopping Malls 'May Face Bankruptcy' This Year: Forbes

Russian shopping malls are facing a drop in rental income of around 30% to 50% this year due to international brands shuttering their operations, leaving many facing bankruptcy, a report form Forbes Russia has found.

Marks & Spencer, H&M, Nike, Mango, ASOS and Farfetch are among the international brands that have ceased operations in Russia due to the conflict in Ukraine, with CBRE analysts estimating that the share of closed stores stands at 15% by brand and 20% by area, Forbes said.

Fellow commercial property firm Knight Frank estimates the figure to be between 20% and 25% of total mall space, while in some malls, as much as 60% of trading has been suspended.

Traffic Levels

The issue is compounded by the fact that traffic to malls had still not reached pre-pandemic levels, with a CBRE spokesperson saying that traffic is "slightly higher" than in 2021, but still lags 2019 by between 15% and 20%.

Traffic is estimated to drop again as a result of store closures – by 10% to 15% in the short term, according to IPG.Estate, and by as much as 25% by the end of the year.


“The revenue of landlords will definitely decrease by 30% to 50%, depending on the composition of the tenants,” Cushman & Wakefield's Olga Antonova told Forbes.

Increased interest rates on bank loans are likely to push mall owners close to bankruptcy, Forbes said.

Read More: There Will Be 'No Domestic Food Shortages', Says Russian Deputy PM

Credit Holiday

The Russian Council of Shopping Centres (RSTC), which represents the industry, has written to authorities requesting a 'credit holiday' given the current situation.


According to the RSTC, the rental income on all shopping centres across Russia is valued at €6.9 billion per year, with Russian shopping centres seeing 4.0 billion customer visits per annum. [Image: ©semion/123RF.COM]

© 2022 European Supermarket Magazine – your source for the latest Retail news. Article by Stephen Wynne-Jones. Click subscribe to sign up to  ESM: European Supermarket Magazine.

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