Market View Dnipropetrovsk Retail

Market View Dnipropetrovsk Retail

Full Year 2011

Hot Topics
Modern retail stock is dominated by multi-tenant retail centers and shopping malls 270 sq. m. of quality retail premises per 1,000 people Home city for national retail chains: ALLO , Astel , Mobilochka , ABV-technics , Bolshaya Lojka , Eva , Comfy Second city in Ukraine for regional expansion (Marks & Spencer, GAP, MAC, LEtoile, Inditex Group (Zara, Bershka, and Pull & Bear)

FUNDAMENTALS Dnipropetrovs k is the third larges t city in Ukraine with a population of more than 1 million inhabitants , is one of Ukraines main bus ines s , indus trial and s cientific centers . Dnipropetrovs k city is growing rapidly, and on the background of new buildings , is increas ingly becoming a vis ible part of the old buildings . T he city holds the s econd place after K yiv in terms of quality s hopping center s upply and amount of profes s ional retail operators . Majority of retailers which are already pres ent or planning expans ion to Ukrainian regions cons ider Dnipropetrovs k as a firs t-tier city to enter. S ucces s ful retail development and expans ion to other regions became pos s ible due to pos itive trends in financial environment. Wage level increas e followed by economic upturn in 2011. Average wages in Dnipropetrovs k are $353 per month, s econd highes t in Ukraine (higher wages only in K yiv). C ons equently, retail s ales have s hown 10.7% increas e relatively to 2010 year (in comparis on to 9.1% 2010 increas e).
Dnipropetrovsk Wages, Retail Turnover and CPI, (% change, y-o-y)
CPI 70 60 50 40 30 20 10 0 -10 -20 2006 2007 2008 2009 2010 2011 Real wages Retail turnover

SUPPLY
Dnepropetrovsk is a homeland of many effective national trade chains. For
7000 6000 5000 4000 3000 2000 1000 0

Retail trade objects

Retail trade enterprises Stores Semestationary

instance, such chains as ALLO, Astel, Mobilochka, ABV-technics, Bolshaya Lojka, Eva, Comfy had been

established in Dnepropetrovsk. These chains are dominating in local market and expanding their network all over Ukraine. Furthermore market Ukrainian is largest located food in

Ozerka

Dnipropetrovsk area. Alef Estate, Dafi, Logos, Karavan, Akselrod Estate

S ource: Dnipropetrovs k S tatis tics Office

represent the strongest local developers and investors in retail market. Dnepropetrovsk market remains second of the most saturated among Ukrainian cities with around 270 sq. m. of quality retail premises per 1,000 people. The most popular Dnepropetrovsk`s shopping centers are Most-City Centre, Karavan and Dafi; with 33,000 sq. m, 63,800 sq. m and 16,000 sq. m of GLA accordingly. Modern Dnepropetrovsks retail stock is dominated by shopping malls and multitenant retail centers. As reported, they account for about 79% of total retail stock in the market. Another 21% of remaining retail stock belongs to big box retail developments. Dnipropetrovsk has no fashion outlets or retail parks. During 2011 year two retail projects joined the market: Priozerniy, phase 1 (21,620 sq. m) and Passazh (13,000 sq. m). Passazh is located in the prime central area of Dnipropetrovsk, and it brought some new market entries in the city: First stores of such brands as Marks&Spencer, GAP and LEtoile opened their doors exactly in Passazh center. During 2012 is expected of 28,000 sq. m to be delivered. These new projects include City Centre and Cascade Plaza. Both of them are developed as

multifunctional complexes. Amount of Dnepropetrovsks

supermarkets has increased almost 2,5 times for last 10 years. In 2002 city had 2

40 large s upermarket retails , now there are roughly 98. P ractically all of thes e s upermarkets belong to s everal retail chains . However total amount of food s tores has decreas ed by 22%. T en years ago there were 1337 operating food s tores , today there are 1049. Dynamics s hows tendency to food s hops ` area enlargement leading to decreas ing of total amount of food retail s pots . S ale market recent res earch s hows 0,2% ($3) (or $1539 per s quare meter) price increas e for Dnepropetrovs k`s secondary retail premis es not located in s hopping centers . Lenins kyi has remained as the cheapes t rayon with average price of $1240 per s quare meter. And the mos t expens ive for buying became Zhovtnevyi rayon where the average price reached to $1 772 per s quare meter.

Price Ranking For Shopping Centers)

Secondary

Retail

Premises

(Not

RAYON AmurNyzhnodniprovskyi Babushkinskyi Industrialnyi Kirovskyi Krasnohvardiiskyi Leninskyi Samarskyi Zhovtnevyi

DYNAMICS

% ($) 0,96 ($12) 1,15 ($20) 0,4( $6) 0,94 ($15) -0,19 ( $3)

$ per sq.m. $1 264 $1 758 $1 396 $1 607 $1 570

-0,88 ( $11) $1 240 1,26 ( $16) $1 285 -0,95 ($17) $1 772

Retail TradeVolume, mln UAH

35000 30000 25000 20000 15000 10000 5000 0

Retail turnover dynamics, %

140

DEMAND

120

Demand

for

quality

retail

space

in

100 80 60

Dnipropetrovsk remains strong both in multi-tenant retail centers and high street locations of the city. Favorable financial environment attracts new players as well as existing retail chains. This attractiveness is due to combination of such factors as relatively

40 20 0

s table and divers ified economic bas e, large population, developed high s treet retailing and availability of critical mas s of the retail s chemes of proper quality in the city. All price s egments , low, lower middle and premium price s egments are equally attractive for Dnipropetrovs k retailers . High average wages and increas ed retail s ales attract large foreign players . Monobrand s tores cons ider their openings in Dnipropetrovs k as the s econd mos t important after K yiv (firs t regional s tores of s uch firms as Marks & S pencer, G AP , MAC , LE toile, Inditex G roup (Zara, B ers hka, and P ull & B ear) opened in Dnipropetrovs k).

of $60-80 per sq. m for standard units. At the same time the highest rents for properties along Karl Marx Avenue and Lenin Square presently vary in the range of $70-95 per sq. m.
FORECAST

Taking

into

consideration

announced

completions of new projects it is expected vacancy rate to remain stable as of 2012. Additionally, 27800 sq. m of new retail premises are expected to be completed with total of 297400 sq. m supply of quality shopping center stock.

RENTS

Retail premises` rents remain quite high during last few years. Rents for high street retail premises are higher than for multi-tenant retail centers. Most of center city stores are located along highly developed Karl Marx Avenue. After crisis rents had fallen by 50% and remain stable till 2010. However vacancy rate has increased by 6% as of 2011 caused by the delivery of new projects. During last year prime net monthly retail rents in the retail centers in the city vary in the range 4

Existing Retail Schemes #

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 Atrium Bosfor Dafi Europe Grand Plaza, Phase 1 Karavan-1, Phase 1,2 Materik Miriada Miriada-2 Most-City Centre Noviy Center Noviy Kontinent Passage Priozernyi, Phase 1 Terra-1 Terra-2 Vavilon

NAME
Appolo

ADDRESS
Titova St., 32 Karl Marx Ave., 22 Ekaterinoslavskiy Blvd., 2 Zvezdniy Blvd., 1A Centralnaya St., 10 Karl Marx Ave., 67D Nizhnedneprovskaya St., 17 Marii Kyuri St., 5 Kalinovaya St., 9A Kirova Ave., 11 Glinki St., 2 Glinki St., 1 Pobedy Nab., 86A Karl Marx Ave., 50 Bobrova St., 2 Panikakhi St., 15 Geroev Stalingrada St., 118D Malinovskogo St., 2

GLA, SQ M
19500 10300 8700 16000 5300 9000 63 800 13500 9000 6400 33000 7000 5700 13000 21620 6800 8300 12700

COMPLETION/ANNOUNCED DELIVERY
2009 2006 2005 2005 2005 2002 2008 2006 2007 2008 2006 2004 2005 2011 2011 2003 2007 2007

Retail Schemes Under Construction

1 2 3 4 5 6 7 8 9 10 11 12 Amstor Brama C as ad P laza C ity C enter Dafi-2 G rand P laza, P has e 2 K aravan-1, P has e K aravan-2 Magelan Miriada-3 P riozernyi, P has e 2 V ladimirs kiy Zaporozhskoe Shosse, 25 Mironova St./Plekhanova St./Kharkovskaya St./ Glinki St E katerinos lavs kiy B lvd. K arl Marx Ave., 72 G eroev Ave. K arl Marx Ave., 67D Nizhnedneprovs kaya S t., 17 K os miches kaya S t. G azety P ravda Ave. S lavy B lvd., 17 S hmidta S t./B obrova S t. G azety P ravda Ave . 12000 n/a 13000 5000 32000 17500 9800 n/a 50000 8000 20000 42000 n/a n/a 2012 2012 n/a n/a 2012 n/a n/a n/a n/a n/a

S ources : Dnipropetrovs k S tatis tics Office http://www.dneprs tat.gov.ua http://www.kanzas .ua/overview_advertis ement/page_view/Analiz-rynka-torgovoinedvizhimos ti-K ieva-i-region-14-05-2012/ http://www.ukrainehotels online.com/en/des tination-dnepropetrovs k/AboutDnepropetrovs k.html http://aiu.com.ua/it/news /dnipropetrovs k.html http://www.chamber.ua/img/C ountry_P rofile_P art2_10(1).pdf http://gazeta.comments .ua/? art=1296136034 http://znaimo.com.ua/%D0%94%D0%B D%D1%96%D0%B F %D1%80%D0%B E %D0%B F %D0%B 5%D1%82%D1%80%D0%B E %D0%B 2%D1%81%D1%8C %D0%B A#link14 http://proua.info/index.php/2012-02-06-21-03-31/item/858%D1%80%D0%B 8%D1%82%D0%B 5%D0%B 9%D0%B B %D0%B 5%D1%80%D1%8B %D0%B E %D1%82%D0%B 4%D0%B 0%D1%8E %D1%82%D0%B F %D1%80%D0%B 5%D0%B 4%D0%B F %D0%B E %D1%87%D1%82%D0%B 5%D 0%B D%D0%B 8%D0%B 5%D0%B 3%D0%B E %D1%80%D0%B E %D0%B 4%D0%B 0%D0%B C %D0%B C %D0%B 8%D0%B B %D0%B B %D0%B 8%D0%B E %D0%B D%D0%B D%D0%B 8% D0%B A%D0%B 0%D0%B C