Commercial property market in Odessa needs further investment
Odessa’s commercial property market is far from being saturated and is in need of further investment. As of now the city has 5 shopping and entertainment centres with the total building area of 214,000 sq.m. and 20 smaller shopping and specialised centres with food supermarket as its anchor tenant. This clearly is inadequate for a city with almost 1 mln inhabitants. JLL research findings cite that cities like Milan and Amsterdam have nearly 400 sq.m of sales floor area per inhabitant, while in Kyiv this number is 274. In Odessa vacant niches are waiting to be taken by innovative quality formats. This was one of key messages of the speech of Arricano’s CEO Mikhail Merkulov which he gave at the “Commercial property: Retail&Shopping centres. Examining demand and growth potential in commercial property sector” discussion panel. This was just one of many events of the “Odessa as the new centre of gravity” conference, organised by the URE Club in conjunction with the British Ukrainian Chamber of Commerce (BUCC), The American Chamber of Commerce (ACC) and the Ukrainian Centre for Steel Construction (UCSC). The conference took place on 9 October as part of the Black Sea Economic Forum 2015.
“Only exceptional and competent projects will enjoy commercial success in Odessa. As commercial property developer and retailer, Arricano is well placed to put its innovative experience in construction and operation of shopping centres to good use, - remarks Mikhail Merkulov. – We have a lot of experience in construction and development of unique, family-oriented shopping and entertainment venues. Our centres offer more than just European-style shopping experience, they take urban culture to a new level”.
Arricano intends to invest nearly USD 80 mln in development of Odessa Mall, a European-style shopping and entertainment complex with the total sales floor area of 71,000 sq.m.
The conference participants which included top managers, potential investors and government authorities agreed that good results in commercial development in Odessa and surrounding areas can only be achieved by holistic approach to the region’s development, requiring restructuring of port facilities, upgrading commercial practices and infrastructure.
“The scale of the Black Sea Economic Forum 2015, the number and status of guests clearly demonstrate that Odessa wants to be at the forefront of regional economic development and be a pioneer in conducting economic reforms. Last summer we bore witness to an unprecedented event in Arricano’s corporate history and that of Ukraine – the Odessa Public Prosecutor office retracted its legal claim at the ultimate stage of appeal. This is evidence of the improved investment climate. It is of paramount importance to potential investors that local government be supportive of their endeavours in regional economic development. Even if development initiatives are realised by just 50%, from investor’s perspective it is still valid to develop the area and invest into commercial property and other sectors”, – says Mikhail Merkulov.