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A growing number of international retailers are finding their way to Russia, Magnus D’Oldenburg, head of centre management at Ikea Shopping Centres Russia has told PropertyEU.

‘We’re seeing interest from big international retailers from the US, UK and other countries. Due to stagnating turnover in mature western markets, they are expanding into China, Russia and Turkey.’ Examples include Victoria’s Secret, Debenhams, American Eagles and Adidas, he continued.

‘More are on their way and many bigger retailers have plans, also from other countries like France, Germany and Sweden. The Inditex group has nine brands including Zara and is very expansive.’ Listed Polish retail group LPP is another example, he added. The company’s Cropp Town brand entered the Russian market in 2006, but also has expansion plans for its Reserved and Mohito labels.

In the past five years, Ikea Shopping Centres has seen footfall increase by 110% at its 14 MEGA branded malls in Russia. In 2007 footfall at Ikea SCR’s MEGA centres stood at a total of around 123 million visitors, rising to around 254 million by the end of 2012.

Russia’s retail market is Europe’s largest consumer market with annual retail turnover of RUB 19.1 tln (€466 bn). Between 2008 and 2012, total tenant sales at MEGA Centres increased by 85%.

After building two new shopping centres between 2011 and 2012, Ikea’s Russian operation has no plans for any new malls for the time being, D’Oldenburg said. ‘We are now busy finding the right tenant mix and we’re also putting substantial effort into upgrading existing malls. That’s a big job in itself.’

The upgrading will involve a double-digit, million-euro investment volume, D’Oldenburg said, but declined to provide further details.

In 2013, 20% of the 3,000-odd lease agreements will expire at some of Ikea’s MEGA centres, while a further 15% are set to end in 2014. The company is seeking to take full advantage of this situation to further refine its tenant mix, D’Oldenburg added.

‘We need to upgrade our malls to meet changing consumer patterns and to adapt to new needs. As the market becomes more saturated, we need to redefine our product.’