The commercial real estate market in Russia is gradually recovering, even as consumer foot traffic remains uneven and vacancy rates for larger properties stay notably high. Industry observers, including market participants cited by Kommersant, monitor movements through the Mall Index, which tracks visitor arrivals per thousand square meters of retail space, to gauge how activity translates into demand for shopping centers and retail volumes. This index serves as a practical proxy for investor sentiment and the health of retail leasing markets across major cities.
<pDuring the week of June 26 to July 2, the Shopping Center Index for Moscow showed a modest wobble, with output dipping slightly year over year, while St. Petersburg displayed a broadly comparable performance. When measured against pre-crisis levels from 2019, the declines are still material, with gaps of about a quarter in both cities. Yet there is a glimmer of positive momentum: consumer activity has begun to pick up again in a context where economic headwinds persist. This improvement, even if incremental, is interpreted by analysts as a promising sign amid broader resilience in the national economy.
<pIndustry professionals note that vacancy rates in the two capitals have edged downward since late 2022. As the market gradually adapts, international brands from friendlier countries are re-entering the space, contributing to anticipated positive dynamics in the near term. In Moscow, the vacancy rate trend suggests a modest improvement from around 14.2 percent toward the mid-teens, while St. Petersburg has the potential to see a sharper reduction from roughly 9.1 percent to around 6 percent as brands expand and leasing activity gains traction. These shifts underscore a process of recalibration in retail real estate that could support more stable occupancy and rent levels over the coming quarters.
<pAnalysts estimate that roughly one in ten street-facing retail properties still remains vacant, reflecting a market where supply is unevenly distributed and the pace of new openings remains constrained. The overall market outlook for the third quarter appears constrained by a lack of high-quality new supply and the slower commissioning of new development projects, which can limit fresh leasing opportunities despite improving demand signals. Nevertheless, the ongoing absorption of available space and the gradual restoration of foot traffic in key corridors may begin to offset vacancies in certain micro-markets, especially where brands target flagship locations and experiential formats to drive shopper engagement.
<pData from industry sources indicate that in the first quarter there was a noticeable uptick in shopping center visitation in several major urban centers after a prolonged period of weakness. Visitors returning in higher numbers help retailers test new concepts and stabilize turnover, which in turn can spur more leasing inquiries and investment interest. The broader context shows that investment activity in Russian commercial real estate for the end of the previous year reached a historic level, reflecting a cumulative interest from domestic and international participants seeking to position assets in a recovering environment and to capitalize on potential growth in rental yields as the market eyes gradual normalization. Analysts emphasize that such investment momentum will depend on both macroeconomic stability and the ability of retailers to attract consistent traffic and convert visits into long-term leases and capital appreciation.