For Russian Retail, It's 1982 All Over Again

Russia's growing middle class is leading a boom in American-style enclosed shopping malls, which are still rather new to the country. Some rival the size and popularity of Minnesota's infamous Mall of America.

2 minute read

January 3, 2013, 5:00 AM PST

By Jonathan Nettler @nettsj


At the same time that commentators in America are proclaiming the coming death of the shopping mall and the return of inner city retail, Russia has caught a case of mall mania, driven by an emerging middle class with disposable income and salavating sovereign wealth funds and Wall Street banks, reports Andrew E. Kramer. "As American malls dodder into old age, gaptoothed with vacancies, Russia’s shopping centers are just now blossoming into their boom years, nourished by oil exports that are lifting wages."

“'It’s 1982 all over again in Russia,' said Lee Timmins, the country representative of Hines, a Texas-based real estate group that is opening three outlet malls in Russia, referring to the heyday of the American mall experience. Russians, he said, love malls."

And the country isn't wading slowly into mall development, it's diving in head first. With 34 million square feet, Moscow "has more floor space in malls than any other European city." Most astoundingly, this development has only occured over the last dozen years. As Kraner notes, "the first Western-style suburban mall opened in 2000."

“'Over the past 10 years, Russia has turned into a middle-class country,' Charles Slater, a retail analyst at Cushman & Wakefield, a commercial real estate consulting firm, said in an interview. 'What better to do than go to an enclosed, warm environment with many things on offer, whether that be bowling, cinema or food courts, things the customers have not been used to in the past?'”

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