Odessa

Supply & Demand
With total population over 1 million inhabitants, Odessa is one of the largest cities of Ukraine located in its southern part. The city is an important trade sea port on the Black Sea and a popular tourist destination. Total modern retail stock in Odessa was estimated at around 382,250 sq m in November 2011, or 469 sq m of modern retail stock per 1,000 inhabitants. Only around 5,000 sq m (GLA) of new retail stock was delivered in Odessa in 2011, comprised of the neighborhood retail centre ‘5 Element’. The modern retail stock in Odessa has been dominated by multi-tenant retail centres and shopping malls, which account for approximately 62% of total stock in the sector. Big box retail developments account for the remaining 38% of total retail stock in the city. There are no retail parks or fashion outlets in the city. The 65,000 sq m (GLA) retail and leisure centre Riviera Shopping City is the largest and most notable retail scheme in Odessa, which was developed by the LSE-listed company Argo Real Estate Opportunities Fund during 2009. The scheme is anchored by real,- and OBI, while its gallery benefits from the presence of majority of quality retail brands operating in the city. Furthermore, despite after-effects of economic crisis, the opening of Riviera Shopping City triggered many new market entries in Odessa, including (but not limited to) real,- , OBI, IMAX, Inditex Group, Marks&Spencer, New Yorker, LPP (House, Cropp Town, Reserved). As of November 2011, there was over 199,200 sq m (GLA) retail space planned for delivery in 2012-2014. DTZ projects that in 2012 new supply in the retail property sector in Odessa will amount to around 33,000 sq m (GLA) formed by the retail and leisure centre ‘City Centre’ (phase 1). Major schemes planned for delivery in 2013-2014 in Odessa include the retail and leisure centre on Generala Petrova Street developed by Amstor, Europort Retail Park by the Israeli company Europort, as well as the retail centre planned by the Russian Group of companies BFG. High street retailing is well-developed in Odessa due to the urban structure of the city and its high popularity among the tourists. Odessa, together with Donetsk, is considered to be the second after Kyiv most attractive destination to enter for majority of retailers in all pricing categories. Demand remains very strong for quality retail space both in high street locations and multi-tenant retail centres in the city.

Rents
In Odessa high street retail rents are higher than average rents in multi-tenant retail centres, mostly due to the urban structure of the city with many tourist attractions in its central part, developed nature of street retailing, shopping habits of local inhabitants and high tourist flows, as well as lack of quality retail schemes in the non-central areas of the city. Prime high street retail rents in Odessa amount to $70-95 per sq m per month, with the highest rents typically achieved for quality retail premises with the frontage to Derybasivska, Rishelyevska and Yekaterynynska Streets. In the prime multi-tenant retail centres in Odessa, net monthly retail rents vary in the range of $65-85 per sq m for standard units of area 100-300 sq m.