A mass recall of bank licenses by the Bank of Russia in the street retail sector has resulted in the closure of 517 bank branches in Moscow, or 17% of the total amount, according to broker Colliers International.
Given that the average bank branch size is 150-200 m2, this means 70,000-100,000 m2 of vacated space in the Russian capital, the broker noted.
Bank facilities are located both in dormitory communities and in the centre of Moscow, and a number of banks that have had their licenses recalled (for example, SB Bank, Russian Credit, Transnational Bank) also had quite an extensive branch network, leading to several units closing in the city centre.
'Given that in the overall structure of tenants in central Moscow, banks occupy approximately 9% of the premises, the recall of licenses from banks as a whole has had a moderate influence on the Moscow street retail market,' commented Nikolay Kazanskiy, managing partner of Colliers International Russia. 'However, in conjunction with the ongoing optimisation of existing bank branch networks, this effect has been amplified. According to various forecasts, in the next few years the license recall will continue, but not to the extent of previous years, since a significant portion of non-viable banks has already been closed.'
An additional 10% of banks are however expected to have their licenses recalled in 2016, he added. 'Judging from the trend of the first five months, these forecasts are quite feasible, and the trend will lead to the appearance on the market of new supply in street retail, which will be interesting for tenants in other sectors.'
The vacated premises were not re-occupied rapidly, since the conversion of a bank branch for use by a different type of tenant requires time and additional investment. Therefore, very often another bank came to occupy the premises of the closed one.
