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02 November 2015

Business Context

Zsar Outlet Village is a new premium outlet village development in South-Eastern Finland located on the Russian border, 200 km from St. Petersburg, Russia, and 170 km from the Finnish capital Helsinki.

East Finland Real Estate required an assessment of likely trading performance and key catchment statistics to justify the project and support leasing activity.

The Challenge

  • Evaluate an undeveloped roadside site located in an underpopulated local catchment where a substantial proportion of sales will be drawn from tourists and passing highway trade
  • Understand how cross border tax differences can create commercial opportunity
  • Convince sceptical occupier brands of the unusual trading opportunity
Zsar Outlet Village

What we did

  • Undertook a field based review of full price competition in Helsinki and St Petersburg to understand the competitive positioning opportunity
  • Used gravity based techniques to estimate the extent and scale of catchment
  • Reviewed published tourism and border crossing projections to understand the nature of passing trade and the growth in future demand
  • Identified an ideal tenant mix and target brands and allocated floor space. 
  • Benchmarked the opportunity at Zsar with established outlet centres in terms of population, market capacity, likely turnover and sales density performance
  • Produced a series of bespoke summary documents for target occupier brands such as Adidas, Nike and Calvin Klein

Result

The scheme is under construction and due to open in 2018

On the basis of FSP recommendations, additional land has been acquired to facilitate further phases of development.

70 percent of the first phase is pre-let to brands including Armani, Hugo Boss, Le Creuset, Nike, Restamax, Stayer and Sunsolo