IKEA, the firm that brought us Mega mall, Eastern Europe's biggest shopping and entertainment center, is planning to go one better with the construction of Mega mall 2.
And as with any blockbuster sequel, the new Mega, across town in the northern Moscow suburb of Khimki, promises to be even bigger -- this time with 230,000 square meters of family-friendly retail space.
Less than a year after the first Mega complex opened its doors to the public, it has already passed its annual footfall target of 25 million, according to the retail giant. Last week IKEA announced it is starting construction of Mega 2, which it plans to open in December 2004.
And despite transportation woes and zoning barriers, the development of big out-of-town shopping malls looks like it will be a lasting trend in Russia.
"This is exactly what we dreamed of," Lennart Dahlgren, IKEA Russia's general manager, said in a press release accompanying a groundbreaking ceremony for the new Mega project last Wednesday. The Swedish furniture icon will put up the bulk of the project's $300 million price tag. Other anchor tenants will include Auchan, Stockmann and Moscow electronics retailer M.Video.
"We remain committed to offering the opportunity to shop and relax in a comfortable and safe environment for the whole family," he said.
The new complex will exceed its predecessor's area by 80,000 square meters. It will house over 220 stores, 67 percent of which have already signed a lease through real estate agent Jones Lang LaSalle.
A skating rink, cinema multiplex and children's play area will add to the much-touted family atmosphere. However, some experts say that the relaxed, family environment and increased profits don't necessarily go hand in hand.
"The general problem with large shopping centers is there are lots of people but they don't buy a lot," Rimma Chaimokova of BKG said in an interview with Kommersant. "People go there to have fun, not to do a huge amount of shopping."
Though this might seem a reasonable assumption, there is evidence to the contrary. According to Andrei Svetlakov, head of research at PMC, tenants at the first Mega complex saw returns on their investments far more quickly than usual. He predicted Mega 2 would be able to ride on the first Mega's wave of success.
"It was the first project of its type in Russia -- a mega-mall with so many stores under one roof," he said.
Svetlakov added that although an estimated 1.5 million square meters of retail space will be built in the Moscow region over the next year or so, Mega will likely remain retail top dog due to name recognition.
Colliers International consultant Alexander Kopylov agreed. "There is no chance that this project will fail," he said in a telephone interview, noting that the mega-mall trend is particularly attuned to the city's burgeoning middle class. He said those that have the means are likely to shop at a mega-mall, preferring its convenience and variety.
As if by some masterstroke of comparative positioning, the future site of Mega 2 is located right down the road from a traditional Russian outdoor market, reminding the middle class of what used to be practically their only shopping choice.
Shabby, crowded, and swimming in mud, it is the antithesis of Mega. Although once the norm for all but the very rich, nowadays one would hardly think of working in an office all week just to go elbow-to-elbow with the throngs of babushkas at the marketplace on the weekend.
All PR schmaltz aside, the mall does provide consumers with the opportunity to spend time with their families while buying previously much sought-after clothing and other creature comforts. Yet while the mall environment may take one away from the crowds and toil of the city, getting there and back will definitely give consumers plenty of both.
Despite being bigger than the original Mega, Mega 2 will have 7,500 free parking spaces, 2,500 less than its predecessor. The free shuttle buses to IKEA's Khimki store, which will form part of the Mega 2 complex when the other stores are built, are notoriously overcrowded.
The Khimki IKEA store has thus far tried and failed to get clearance to build an entrance that links directly with the Moscow Ring Road, or MKAD, because it would require relocating the famous anti-tank spikes, a monument to the heroes of World War II.
In the relative calm of the early afternoon weekday traffic, it took visitors 40 minutes to get from the center of Moscow to the site of Wednesday's groundbreaking ceremony. The road leading from the MKAD to the site is long, narrow and in disrepair.
Details of improved access roads were noticeable by their absence at the press conference following the groundbreaking ceremony. Dahlgren sidestepped a question on transportation, saying he would rather focus on the "more positive" aspects of the venture.
"IKEA is a very demanding company, and meeting with the Russian authorities is not easy," he said. "But now we have wonderful support from the Moscow region.
"Many people say that [doing business in] Russia is slow and difficult. But I can tell you, to make this much [progress] this quick would be impossible in any country, but not in Russia."
The Moscow region government acknowledges that IKEA has become one of its biggest foreign investors in recent years.
"IKEA is one of our privileged partners," said Tigran Karakhanov, head of foreign economic relations for the Moscow region, adding that IKEA's taxes help solve a lot of the area's social problems.
At the groundbreaking ceremony, IKEA announced it would donate $1 million to local youth charities when the mall opens.
And as with any blockbuster sequel, the new Mega, across town in the northern Moscow suburb of Khimki, promises to be even bigger -- this time with 230,000 square meters of family-friendly retail space.
Less than a year after the first Mega complex opened its doors to the public, it has already passed its annual footfall target of 25 million, according to the retail giant. Last week IKEA announced it is starting construction of Mega 2, which it plans to open in December 2004.
And despite transportation woes and zoning barriers, the development of big out-of-town shopping malls looks like it will be a lasting trend in Russia.
"This is exactly what we dreamed of," Lennart Dahlgren, IKEA Russia's general manager, said in a press release accompanying a groundbreaking ceremony for the new Mega project last Wednesday. The Swedish furniture icon will put up the bulk of the project's $300 million price tag. Other anchor tenants will include Auchan, Stockmann and Moscow electronics retailer M.Video.
"We remain committed to offering the opportunity to shop and relax in a comfortable and safe environment for the whole family," he said.
The new complex will exceed its predecessor's area by 80,000 square meters. It will house over 220 stores, 67 percent of which have already signed a lease through real estate agent Jones Lang LaSalle.
A skating rink, cinema multiplex and children's play area will add to the much-touted family atmosphere. However, some experts say that the relaxed, family environment and increased profits don't necessarily go hand in hand.
"The general problem with large shopping centers is there are lots of people but they don't buy a lot," Rimma Chaimokova of BKG said in an interview with Kommersant. "People go there to have fun, not to do a huge amount of shopping."
Though this might seem a reasonable assumption, there is evidence to the contrary. According to Andrei Svetlakov, head of research at PMC, tenants at the first Mega complex saw returns on their investments far more quickly than usual. He predicted Mega 2 would be able to ride on the first Mega's wave of success.
"It was the first project of its type in Russia -- a mega-mall with so many stores under one roof," he said.
Svetlakov added that although an estimated 1.5 million square meters of retail space will be built in the Moscow region over the next year or so, Mega will likely remain retail top dog due to name recognition.
Colliers International consultant Alexander Kopylov agreed. "There is no chance that this project will fail," he said in a telephone interview, noting that the mega-mall trend is particularly attuned to the city's burgeoning middle class. He said those that have the means are likely to shop at a mega-mall, preferring its convenience and variety.
As if by some masterstroke of comparative positioning, the future site of Mega 2 is located right down the road from a traditional Russian outdoor market, reminding the middle class of what used to be practically their only shopping choice.
Shabby, crowded, and swimming in mud, it is the antithesis of Mega. Although once the norm for all but the very rich, nowadays one would hardly think of working in an office all week just to go elbow-to-elbow with the throngs of babushkas at the marketplace on the weekend.
All PR schmaltz aside, the mall does provide consumers with the opportunity to spend time with their families while buying previously much sought-after clothing and other creature comforts. Yet while the mall environment may take one away from the crowds and toil of the city, getting there and back will definitely give consumers plenty of both.
Despite being bigger than the original Mega, Mega 2 will have 7,500 free parking spaces, 2,500 less than its predecessor. The free shuttle buses to IKEA's Khimki store, which will form part of the Mega 2 complex when the other stores are built, are notoriously overcrowded.
The Khimki IKEA store has thus far tried and failed to get clearance to build an entrance that links directly with the Moscow Ring Road, or MKAD, because it would require relocating the famous anti-tank spikes, a monument to the heroes of World War II.
In the relative calm of the early afternoon weekday traffic, it took visitors 40 minutes to get from the center of Moscow to the site of Wednesday's groundbreaking ceremony. The road leading from the MKAD to the site is long, narrow and in disrepair.
Details of improved access roads were noticeable by their absence at the press conference following the groundbreaking ceremony. Dahlgren sidestepped a question on transportation, saying he would rather focus on the "more positive" aspects of the venture.
"IKEA is a very demanding company, and meeting with the Russian authorities is not easy," he said. "But now we have wonderful support from the Moscow region.
"Many people say that [doing business in] Russia is slow and difficult. But I can tell you, to make this much [progress] this quick would be impossible in any country, but not in Russia."
The Moscow region government acknowledges that IKEA has become one of its biggest foreign investors in recent years.
"IKEA is one of our privileged partners," said Tigran Karakhanov, head of foreign economic relations for the Moscow region, adding that IKEA's taxes help solve a lot of the area's social problems.
At the groundbreaking ceremony, IKEA announced it would donate $1 million to local youth charities when the mall opens.
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