According to global real estate advisor CBRE, commercial real estate transactions in Russia could be worth $4.5 billion this year. The country’s economy will be relatively stable, with the IMF forecasting GDP growth for 2012-2013 of 4 per cent per year. A shortage of available stock will help to keep commercial prices high.
Even though the market is expected to grow in 2012, the $4.5 billion figure is lower than the $6.4 billion in investment transactions which closed in 2011. A tighter lending market is contributing to the lower figures, and economic uncertainty in certain regions of the country is another factor affecting the market.
International investors are coming to Russia with long-term investment strategies in mind. Morgan Stanley bought the Galeria Shopping Centre in St. Petersburg for $1.1 billion in 2011.
CBRE tracked 13 major investment deals in the first six months of 2012. The value of the transactions was $1.5 billion. Most of the commercial real estate deals were for properties in the Moscow area.
Offices and retail space are the most popular types of assets for investors. A total of 320,000 square meters of new industrial space was delivered in the first half of 2012. The average rent in the country was $135.00 per square meter, but was as high as $150.00 per square meter in some markets.
CBRE predicts that there will be strong demand for new prime commercial real estate developments “for the future.” Interest levels from investors (domestic and international) should remain strong for high quality properties. Demand is expected to be particularly high in the Moscow region, as commercial real estate investors have been quite interested in properties in this area recently.
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