Shopping malls in Russia are facing a wave of closures due to rising taxes, increased loan costs, and decreased consumer spending. The Central Bank's decision to raise interest rates to a record 21 per cent to combat inflation has significantly impacted businesses across the country, particularly the retail sector.

Creating a bleak outlook for many shopping centers, experts predict further interest rate hikes, Around 200 malls face bankruptcy and may close down in 2025, predicts the Union of Shopping Centers.

Malls are struggling to renegotiate existing loans and secure new ones, impacting profitability and building maintenance, explains Oleg Voitsekhovsky, Managing Director, Russian Council of Shopping Centers (STC). Adding to this financial strain, the tax burden on shopping centers has increased tenfold in recent years due to rising cadastral values, says Pavel Lyulin, Vice President, STC. He anticipates further property tax increases this year.

The economic crisis is affecting other industries as well. Impacted by sanctions and declining exports, coal companies have suffered significant losses. Numerous airlines and IT firms are also reportedly nearing insolvency.

Companies are struggling to access necessary funding, with new loans plummeting. Borrowing on the debt market has also become more difficult due to rising bond yields.