Neighborhood centers in Moscow's suburbs see recovery in footfall and become trendsetters for local brick & mortar industry

April 8, 2021
ADG group, a Russian development company, today shared its results for the first quarter of 2021. As the government in Moscow has officially lifted restrictions and started free vaccinations, brick & mortar retail in Russia is on the road to recovery after the impact of the pandemic and ADG's chain of neighborhood centers is poised to demonstrate strong dynamics. ADG currently operates seven centers, with a further 23 under construction. The group is actively leading the way with major trends by using efficient tools to give people the opportunity to meet, dine, access entertainment and shop in proximity to their homes in state-of-the-art public spaces by reviving the heritage of old Soviet cinemas.
Footfall is on the rise
The first quarter of 2021 was a success as restrictions were officially further relaxed in Moscow and citizens felt freer to visit public spaces such as Mesto Vstrechi (Meeting Place) neighborhood centers. The concept of the Mesto Vstrechi chain is to provide high quality entertainment within walking distance of residential apartment blocks located in the suburbs of Moscow in line with the general trend where people tend to use less public transport and adjust their routine so that they don't have to leave their neighborhood if possible.

In total, footfall grew by almost 20% from January to March. In some centers, such as Mesto Vstrechi Mars in the north of Moscow, it rose by 65%. Another neighborhood center, Mesto Vstrechi Vysota in the southern suburbs of the city, demonstrated outstanding results in January, a month that is typically very quiet for commercial real estate. Grigory Pecherskiy, managing partner of ADG group added: «Vysota opened at the very end of 2020 and in the first month of the new year attracted up to 5,000 visitors daily with 5,885 GLA. This works out as 0.8 people per m2, which is comparable to such shopping mall giants on the Moscow market as Atrium (1.1 people per m2) and Evropeyskiy (1.3 people per m2)».

One of the biggest elements of the chain's entertainment concept is regular events and festivals for visitors. January was still dedicated to some New Year activities; February was marked by Valentine's Day and National Defender Day and, in March, neighborhood centers held an entire week of festivities dedicated to Women's Day and the Russian folklore celebration of Maslenitsa. Days like that not only help provide exciting opportunities for quality entertainment but also help generate additional footfall: on the days mentioned above, it was on average 9% higher than on a typical weekend.

Phygital format

While footfall is growing, online shopping still remains very popular because most people find it convenient. Marketplaces are developing rapidly and ADG group has become a partner of the market leaders, Ozon and Lamoda. Now locals can go to neighborhood centers to attend exciting events and combine it with a visit to a pick-up point to collect their order.

Events themselves are also becoming omnichannel: while strict restrictions were still in place, art masterclasses were being held through Instagram Live sessions on the accounts of neighborhood centers. Now people can physically attend them with no need to get to know the teachers all over again.

All information about events and more can be found in the Mesto Vstrechi mobile app, which is constantly adjusting to current trends and becoming more user-friendly. It is a mix of useful information, a marketplace and personalized loyalty program that provides a smooth customer journey and helps understand people's needs better.

Future plans and trends overview

ADG group is currently working on new openings and opportunities to collaborate with new tenants based on customer needs and feedback. Nevertheless, unlike many other real estate operators, the company will not have to adjust its concept to stay aligned with the new reality.

Experts say that today shopping centers are becoming more than shopping; they have to turn into social and cultural hubs, get closer to the customer and provide valuable services and entertainment. Neighborhood centers have all of this in their original concept, which makes ADG group a flagship developer on the Russian market. Some other companies already follow the strategy: the Sovremennik social club recently replaced an old Soviet cinema and in coming years a multi-functional center will open instead of the old Pravda cinema.

On April 11, the Mesto Vstrechi Budapest neighborhood center will become the stage for a Hungarian cultural festival and later, on April 24, the entire chain will encourage visitors to participate in seasonal project dedicated to design, the environment and spring renewal. Also, at the end of the month, ADG group will open its eighth neighborhood center, Mesto Vstrechi Sayany, in the eastern suburbs of Moscow.
© ADG group 2021
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