The rise in consumer spending in tourist hotspots in Russia during the 2018 FIFA World Cup could boost demand for short-term retail leases, according to new research from Colliers International.
Data from the Russian Federal Agency for Tourism and the Moscow Sports and Tourism Department predicts that 1-1.5 million visitors could arrive in the capital during this summer's football tournament, taking place 14 June to 15 July.
According to Colliers, the event is expected to have a significant impact on vacancy rates in Moscow's retail property market. The demand for short-term leases from retail and food and beverage (F&B) operators in tourist hotspots could increase by 10-20%.
‘It is likely that retailers wishing to capitalise on the World Cup will look for opportunities in areas of high tourist flow and will sign shorter, three to five-year leases, as opposed to a typical five to seven-year lease. Properties that require less capital expenditure, especially those that have the option of withdrawing from the contract, will be particularly attractive,' said Ekaterina Podlesnykh, head of high-street retail at Colliers International Russia.
‘As to what type of retail is most likely to grow, we expect food service demand in Russia to expand by around 10% in the run-up to the World Cup championship. The proportion of food services in the tenant structure is anticipated to increase from a 39% share, to 41- 42%, as F&B operators seek to satisfy the demands of hungry football fans and tourists.
'Cosmetic and sporting goods retailers are also competing for retail space in places with potentially concentrated tourist streams, with a view to boosting exposure and sales. This trend is particularly evident in Moscow, which is not only the main gateway city for tourists, but is also hosting the lion’s share of football matches,’ Podlesnykh concluded.