**One Quarter of Russia‘s Shopping Centers at Risk**
About 25% of Russia’s shopping centers may close by 2025. This is according to industry leaders who reported the warning on December 18.
**Economic Crisis Hits Malls**
Russia faces a severe economic crisis, with record-high interest and inflation rates. The ongoing conflict with Ukraine has led to many foreign companies leaving the country. As a result, shopping centers are struggling with rising operational costs and increased competition from online marketplaces.
**Financial Woes Deepen**
The situation is made worse by high interest rates on commercial loans. Many shopping centers cannot refinance their existing loans or secure new financing. This has hurt their profitability and ability to maintain and modernize facilities.
**Taxes Bite**
Shopping center officials point out that a sharp increase in property values has led to higher tax burdens. In some cases, taxes have increased by as much as tenfold over the past two years. Pavel Lyulin, vice president of the Russian Council of Shopping Centers, estimates that about half of mall income now goes towards taxes.
**Interest Rates Continue to Rise**
The Central Bank has raised interest rates from 19% to 21% in October to combat inflation caused by the war with Ukraine. Further rate hikes are being considered. The combination of these factors is putting immense pressure on Russia’s shopping centers, making it increasingly likely that many will face bankruptcy.
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