An Urban Legend

The Gorod (Eng. – city) shopping and entertainment complex on Ryazansky Prospect, one of Russia’s largest federal highways, opened in May 2006, following the Moscow mayor’s signing of the respective decree in October 2005. The developer constructed the complex on a plot previously belonging to the Karacharovsky Machine Factory. Moreover, Auchan, one of the most sought-after grocery anchor stores over the past few years, has opened its eighth hypermarket in the Moscow Region in Gorod, while, as a future strategic partner with the owners of the shopping and entertainment center, Auchan has also bought part of the premises for the store on the first floor as its own property.

Following the construction of Gorod, the industrial zone was transformed into a well-built territory. The shopping complex was constructed on a section of the factory’s unprofitable premises, with the developer not only fully building the access roads and sidewalks, but also landscaping the territory. According to the investor, the amount invested in construction was about 100 million euros, with the company investing its own funds as well as attracting funds from outside sources.

No Rivals

The TEN group’s largest project is located in the heavily populated southeast of Moscow in the Nizhegorodksy district, bordering with Lefortovo, Yuzhnoportovy, Pechatniki, Tekstilschiki and Ryzansky, with Ryzansky Prospect, one of the largest federal highways, passing through the area only 50 meters from the center.

According to the owners, the deciding factor in choosing the premises was the excellent transport access, the convenient approach roads and the competitive nature of the area. “The complex is located on a highway leading from the center of the region,” explains Svetlana Prokhorova. “The Third Ring Road is close by, too, and the Fourth Ring Road and light subway will be in this area in the future, thereby increasing the shopping center’s attractiveness. The center can be reached today by car and by public transport, such as mini-buses, by going to the Gorod stop, or by leaving subway stops Taganskaya, Aviamotornaya, Ryazansky Prospect, Kuzminki, Kitai Gorod and Avotzavodskaya.”

“An industrial zone occupies most of the area in the Ryzansky district of the capital, more than residential space” comments Yulia Nikulicheva, strategic consulting and valuation director at Jones Land LaSalle. “Despite this situation, as well as the distance from the nearest subway station, the developer chose an excellent location for Gorod, especially when taking into consideration that there is not another facility as well-built qualitatively and with good pricing in the east of Moscow. In terms of location, even Mega-Belaya Dacha lags, given that the TEN facility is located within the city, which increases its customer base, and facilities along the MKAD are oriented more toward those people going to there country houses and are going specifically for shopping.”

Gorod shopping center has a system installed to calculate and analyze the flow of customers, and, following opening, the daily average flow of shoppers has been calculated at 30,000-40,000 people per day. According to the system’s data, the weekday number of customers has remained the same, but the figure is 55,000-93,000 during the weekends and on holidays, with the average shopper spending two-three hours in the building.

“We have included 95 areas for rest and entertainment in the shopping centers general area,” says Elena Baranova, brand manager at Gorod shopping center. “There are 32 cafes and bars as well as 30 restaurants. There are 87 small grocery stores of 100-150 sqm within walking distance, conveniently located on the first floors of residential complexes, but their assortments are practically the same, being daily goods and instant and processed foods. Moreover, in the surrounding areas, shopping areas and entertainment facilities are unevenly developed on streets and highways, so Gorod has practically no rivals.”

However, there is a flip-side to the large shopping center being near a main transportation artery: Ryazansky Prospect and the neighboring roads are packed with cars, so those anxious to go to the shopping center could find themselves caught in a traffic jam for some time.

One’s Own Ideas Are Better TEN typically handles all of the operations at its facilities, from the marketing concept to the management of the finished complex, thus ignoring the myth that additional outside consultants must be invited to operate a project. The developer also completed the initial marketing analysis via TEN-Media, which is part of the group of companies.

Currently, TEN has a synergy of business divisions, specializing in all stages of completing a project, from conception to analysis of effectiveness and the architectural design, construction and delivery to the market,” explains Natalia Chernova, PR manager of the group. “Our building management system is economically sound and works successfully, and we have only outsourced for cleaning.”

The overall area of the complex is 128,000 sqm, with nearly half of the premises, 66,100 sqm, being dedicated to parking space. The complex comprises two shopping and ground floors with parking. Additional parking is available on six levels. Gorod’s main advantage is its worthy lineup of tenants and variety of opportunities to rest and enjoy oneself.

“It is difficult to construct something unique,” note Baranova. “Therefore, we decided that Gorod would simply be an excellent center with a pleasant atmosphere and balanced lineup of operators geared toward middle-class customers.”

“Lease rates in Gorod are $400-$10,000/sqm, including kiosks. Tenant turnover is a round 2%,” says Prokhorova. “

“I think that Sportmaster being located beyond the food court is not very convenient, although it is joined with a rink and one of the escalators,” says Nikulicheva. “Given that the market was not saturated at the time of opening, the center’s owner maximized the lease rates, but anchor tenants like Auchan can pay $60-$100/sqm. In any case, the project will very likely quickly recoup investment in five to six years.”

“A shopping center like Gorod was needed in Moscow’s Southeaster Administrative District,” notes Ilya Shuravin, partner at S.A. Ricci/King Sturge. “The anchor tenants are excellent and the youth brand names are also well represented. In terms of 30-40-year-old group, the selection is a bit weak, and some stores could stand to leave the project, while others could stand to join. The food court is well laid out and there is a number interesting operators for the younger generation. Indeed, younger shoppers seem to be the target group of the second floor.”

There is a free-of-charge children’s play area in the shopping complex, where parents can leave their children with professional caregivers while they shop. “The play zone is set up as an area for kids to quietly spend some time and also for active play,” says Shuravin. “Children can play here, and all of the equipment and toys conform to EC and RF state sanitary and epidemiological norms and standards.”

The proper selection and mix of tenants is a result of the complex being aimed at the middle class, especially families with children.

“Gorod’s concept can be compared to the TEN group’s first project, L153 in Marino,” says Nikulicheva. “Also, the new Auchan project on the Third Ring Road, in the Sokolniki area, will likely be similar in size and layout.”

Entranceways and Navigation

According to the owner, the complex fully complies with modern requirements, convenient transport access and enough parking spaces. Currently, the shopping center has the most parking of any facility located within the city.

There is an additional road lane at the entrance of the shopping center, and there is a separate entrance for delivery trucks. The truck and rig unloading areas are equipped with hydraulic loading docks.

On the complex’s first sub-ground floor is a 36,422-sqm parking lot for 1,200 vehicles. A 29,678-sqm multi-tier ground-level parking lot can hold 800 vehicles, and the overall parking area can accommodate 2,000 vehicles on its 66,100-sqm area.

“Traffic guidance devices assist in easily entering and parking on the territory, but when exiting from the floors into the underground parking lot, one must search for a while for his car,” recalls Nikulicheva. “Also, there are several confusing navigation systems for customers who cannot properly read the floor plans, with the operators having been situated on ‘islands’ and ‘in the eights.’ It is not clear how to get there, where to go further, and, in my opinion, there is one escalator too many.”

Perhaps the above-outlined are part and parcel to what the owner calls “the variability of finishing and planning solutions for the tenants.” At the same time, Gorod’s interior navigation system includes all forms of vertical transport, including specifically: