Decathlon plans to increase the share of the floorspace it owns in Russia, rather than renting it, from the current level of 25 percent to 50 percent in the coming years. Julia Gorosheni, development department director for Decathlon in Russia reportedly noted that the chain tends to rent more floorspace in Asia and own more of it in Western Europe.
The retailer explained that it was prompted to introduce these changes in its development strategy for Russia by a negative experience in liaising with shopping centers in the past few years. Decathlon has faced challenges associated with a lack of flexibility by the landlords in terms of the leases and the fact that it was asked to participate in various advertising campaigns and space renovation programs.
Decathlon plans to adopt the new policy this year, with 55 percent of the investments due to be made in the Moscow area and 25 percent in the province of St. Petersburg.
The French-based retailer, which also tends to source some of the products it sells domestically in most of the countries were it operates (see the next article), will be able to benefit from relatively low real estate prices. In 2018, the price for commercial real estate shrank across Russia by 11 percent, while rental rates went down as well. In Moscow, however, monthly rental rates per square meter increased by between 13 and 17 percent during the past year, reaching an average of 114,000 rubles (€1.551-$1.743), Colliers International estimated.
