Retail Well–Being Index (RWBI)


The Ukrainian Council of Shopping Centers (UCSC) announces a new permanent project — the calculation of the Retail Well-Being Index (RWBI).

The Retail Well-Being Index (RWBI) was developed in 2020 by the Ukrainian Council of Shopping Centers (UCSC), which allows you to dynamically monitor the level of well-being of retail, taking into account such indicators as the attendance of shopping centers, the vacancy of space in shopping centers and the level of rental rates. In pilot mode, The Retail Well-Being Index (RWBI) has been monitored since August 2021.

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RWBI — the value of the Retail Well-Being Index,

F — shopping center footfall, people per month,

O — occupancy rate, %,

R (rent rate) — the proposed average rental rate for standard vacant lots with an area of 50-250 square meters, $ for 1 sq. m., excluding VAT.

All three key indicators are directly proportional to the value of Retail Well-Being Index (RWBI), but vacancy is inversely proportional to this index. In order not to complicate the formula, the occupancy rate is used.

Mathematical sense

In the numerator, such indicators as traffic, occupancy and rental rate are multiplied, but they have one feature: each of the indicators affects the others.

For example, an increase in the traffic of a shopping center affects the increase in occupancy and the growth of the rental rate, etc. That is, some latent factor affects each of these indicators. And they multiply. Therefore, it is more correct to use not just their product, but the square root of this product.

Then we divide by 100 so that the result is better understood.

The minimum value of Retail Well-Being Index (RWBI) can be 0, the maximum value does not exist. But if you imagine, for example, an ideal picture that the average attendance of shopping centers reaches 1 million people per month, the occupancy rate is almost 100%, and the average rental rate is $100, then the RWBI in this case will be equal to 100.