IBC Real Estate and ATER unveil Russia’s mall classification

More than 27 million sq m of quality shopping-centre stock defines the Russian market, according to IBC Real Estate estimates. The consultancy and the Association of Trade Real Estate and Retail Experts (ATER) presented a new classification with four classes and 53 criteria in 12 parameter groups. It responds to ageing assets, rising vacancy and falling visitor traffic.

Almost 80% of that stock opened more than 10 years ago. Shopping centres from different generations and formats now compete for audiences and traffic as consumer preferences change. Delayed revisions of concepts and tenant mixes have made the market more uneven.

The pressure extends beyond Moscow: the capital accounts for one quarter of the country’s quality shopping-centre stock, while other large cities combine extensive leisure options with a highly developed e-commerce market.

Development has slowed and the market has segmented by size. Average annual new construction stood at 1.3 million sq m in 2012-2021, but fell to 400,000 sq m over the latest five years.

Consumer demand has changed and the pool of traditional shopping-centre operators has contracted. Even at lower developer activity, neighbourhood centres continue to open, often within residential developments and with gross leasable area (GLA) of up to 20,000 sq m.

The market has been turbulent for more than five years, yet some centres have failed to adapt, as vacancy continues to rise and visitor traffic declines. IBC Real Estate and ATER argue that assessing current condition through universal characteristics can provide a starting point for the market’s next development phase.

Classification scope

The four qualifying classes are Prime, A, B+ and B-. Assets that meet none of their requirements fall into class C. The scoring system combines mandatory and optional criteria across 12 groups, with 53 criteria in total. Its scope reaches beyond physical condition to the commercial mix that determines how a centre performs.

Technical and operational groups cover:

• Engineering systems; building structure and architectural layout; vertical transport; parking and mobility infrastructure.
• Transport accessibility; ownership and management; logistics and operations; safety; telecommunications infrastructure; visitor services; and certification against various standards.

Tenant composition is a key indicator because a centre’s real condition cannot be assessed without it. The review considers overall tenant-pool diversity, the category of food and beverage operators, types of anchor tenants and the presence of foreign retailers.

Anchor tenants (large stores that draw recurring traffic) are assessed by type. The framework also measures space taken by off-price (discounted branded goods) and second-hand (resale) operators, plus food discounters (low-price grocery formats).

Scoring flexibility

Each of the four classes permits a property to fail two mandatory criteria. It may also substitute up to three additional mandatory criteria with optional ones, at a rate of three optional criteria for each mandatory criterion. No more than three mandatory criteria may be replaced in total.

What changes for owners and tenants?

“The classification should be useful to everyone who owns a shopping centre, runs a business there or comes to shop,” said Pavel Lyulin, co-chair of ATER. “For an owner, it helps assess the asset, compare it with competitors and determine investment priorities.”

“For a tenant, it clarifies the quality of the location, operating conditions and service level at the stage of choosing premises. For visitors, its value lies in clear comfort requirements: convenient navigation, accessibility and properly functioning equipment. Our task is to give the market a tool that supports decisions and consistently raises the quality of shopping centres,” Lyulin said.

The practical change is a common decision framework. Owners can benchmark an asset and set investment priorities; tenants can compare the location, operating environment and service level before choosing premises; and visitors can check a centre against stated comfort standards. For all three groups, the framework supplies the same measurable basis for evaluating a property.

Its value now rests on consistent application: the classification gives the market a common tool for prioritising investment and improving shopping-centre quality.