moscow 3

Prime office space across Europe is in short supply with vacancy levels the lowest since 2012, according to global real estate advisor CBRE.While office vacancy across the region is now at its lowest level for four years, Moscow office vacancy level reached the highest level and the rent continued to decrease.

Claudia Chistova, Head of Research Department in CBRE, Russia, said:

“Opposite trends were observed in Moscow office market during 2015. The vacancy reached the highest level, the rent continued to decrease. By the year-end the vacancy is expected to reach 16-17%. Class A vacancy may peak at 27-28%, or 1 mln. sq m. By the end of 2016 limited supply will drive vacancy down. In the current market conditions, the development of new office projects that would be commissioned in 2017–2018 are being put on hold. According to our forecast, the total delivery for 2017-2018 will not exceed 0.5 mln. sq m.

“In 2015 rents continued to decrease. Rents went down by 10-15% in 2015 or by 25-35% compared to the rents at the beginning of 2014. The prime area is the only submarket where available office space is offered for lease in dollars. Asking rents in the Prime class A segment are $800–900/sq m per year, net of OpEx and VAT, class A rental rates – RUB 19,000–25,000, class B rental rates – RUB 13,000 – 23,000. In 2016 rents are expected to remain stable. If the overall macroeconomic and geopolitical situation is positive, we don’t exclude rouble rental rates growth on the back of high inflation.”

 

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