Glorax Group seeks to create its own network of fitness centers, a source close to the Company has told “Vedomosti”. It is planned to implement the project in the cities of the Central and Northwestern Federal Districts, confirmed a representative of Andrey Birzhin, the major shareholder of Glorax Group. Yuri Sokolov, Strategic Development Director of “Zebra” Fitness Centers, is aware of Glorax Group’s plans.
This market has a great potential, explains his interest Birzhin. “Some 6% of Russian population went in for sports at the beginning of 2015, while 35% in the USA,” says Birzhin referring to the expert data. Nikolay Pryanishnikov, CEO of World Class Fitness, also confirms the assessments.
Premium fitness segment is saturated, therefore Glorax Group will make business in affordable price segment as it is more attractive from investment prospective, explains Birzhin. According to him, the Company is already looking for the sites with an area from 500 to 2000 sq. m. to build its fitness centers. Purchase or lease of ready-made facilities may also be an option, he adds. It is planned to launch the first five fitness centers in Moscow, Moscow Region and Saint-Petersburg within the next two years, said Birzhin, but he has not elaborated on the quantity. They work on the name of the fitness network, added a representative of Glorax Group.
Glorax Group plans to spend circa RUR 3 billion on the project development within five years, and to cover expenses in seven years, says Birzhin. Pryanishnikov estimates that it may cost RUR 40-200 million to open a fitness center depending on the floor area, availability of the swimming pool and the finishing quality. On the average, such projects are repaid within 5-6 years marketwide.
Fitness industry market was actively developing before crisis in 2014, but now the pace slowed appreciably, notes Pryanishnikov. Russians have started to save more on various services, including fitness, he explains. According to Rosstat (Federal State Statistics Service) the revenue in health and fitness and sports in Russia has increased by 40% in 2015 a year up to RUR 74.4 billion, including by 37% in Moscow, i.e. up to RUR 28.8 billion.
This is a low-marginal business and requires significant expenses, says Pryanishnikov, therefore for many developers it is more an additional infrastructural facility in their projects than an independent business area. Olga Shirokova, Consulting Department Director in Knight Frank, also believes that Glorax Group might possibly start to develop the fitness network in its projects in Saint-Petersburg. Sports centers are also planned in the projects of Glorax Development (a subsidiary Glorax Group), confirms Dmitry Konovalov, Managing Partner of the Company.
Glorax Group has already had experience in development of the sports facilities. The Company manages the sports complex in Sergiev Posad District, having spent RUR 400 million on it. It has been reported before that the Company plans to construct the Olimp Housing Estate nearby covering 60 000 sq. m.
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