Page 118 - RusRPTFeb19

company to increase the level of centralization of supply, reduce costs and significantly reduce delivery times. The company didn't comment on the cost of the warehouse project, but experts speculated the Moscow region complex would cost RUB2.4–3bn, while the Novosibirsk region complex would cost RUB1.1–1.4bn. The deal between PNK Group and Lenta will be one of the largest build-to-suit in the history of the warehouse real estate market, consultants interviewed by Vedomosti said.
The second largest warehouse belongs to Leroy Merlin: in 2018, it agreed with PNK Group on the construction of a distribution centre of 140,000sqm in the logistics complex "Bely Rast" in the Dmitrov district of Moscow region - the first warehouse the French retailer has ever built outside its home market. French supermarket chain Auchan is in second place. The development company Radius Group built a warehouse of 138,000sqm in the complex "South Gate" in the Domodedovo district. Retailers and distributors accounted for 45% of all transactions with warehouses in 2018. Last year a total of 1.5mn sqm of warehouses was commissioned and sold in the Moscow region, of which the share of retailers accounted for about 40% versus 20% a year earlier.
9.2.5 Retail corporate news
The iconic Russian children's goods chain Detsky Mir is aggressively expanding on the back of strong growth that saw revenues rise by 13.2% y/y in the 4Q18 to RUB34.3bn, the company said on January 17. The “Hamley’s of Russia,” Detsky Mir has gone from strength to strength and rolled out 121 stores in 2018, expanding its selling space by 12% y/y to 768,000sqm, reports VTB Capital (VTBC). “The figures are in line with our forecast on revenues, while the aggressive store openings outperformed management’s target of 100 outlets. Sales growth saw a moderate deceleration from the 15.7% y/y in 3Q18, while the headline like-for-like (LFL) was comparable q/q at 3% y/y. As part of its guidance for 2019, the company targets at least 80 new stores (we forecast 70) and is to present its financial plans in March,” VTBC said in a note. “For 2019, we forecast revenues up 13% y/y, which would be one of the largest increases in the Russian retail universe. The company’s limited capex needs and the distribution of all profits under RAS accounting return a 10% dividend yield for the next 12-months, we calculate, and in our view the current valuations (2019F EV/EBITDA of 6.0x) is appealing,” VTBC adds.
Russian children's goods retailer Detsky Mir has expanded into the pet shop format and opened its first Zoozavr store in Moscow, the company announced on December 5. The first store with area of 200 square meters will offer pet food, medical and veterinary drugs, grooming products, cosmetics and hygiene products, amongst other things. Detsky Mir expanded its lines for the second time this year, as in January the company started a new retail format ABC, a multi-brand chain also selling educational toys. The assortment of Zoozavr will also be available in the online Detsky Mir store and for in-store pickup at Detsky Mir locations in the Moscow region and St Petersburg. Most recent reports claimed that Detsky Mir’s parent, the multi-industry investment conglomerate AFK Sistema, could sell a controlling stake in Detsky Mir to the Safmar group of Mikhail Gutseriev, in a widely anticipated deal. The addition of a new format with large upside potential could increase the valuation of the asset. "Zoozavr stores are going to become a new growth pillar for Detsky Mir in the pet goods market (RUB 200bn vs. the RUB 525bn children goods
118 RUSSIA Country Report February 2019 www.intellinews.com