Analysis of the commercial real estate market from Praedium. Analysis of the commercial real estate market from Praedium Overview of the retail real estate market 1st quarter
Against the background of the absence of serious macroeconomic shocks and the revision of forecast indicators towards improvement in the market commercial real estate stabilization is observed. Positive trends include an increase in demand for premises recorded since the end of 2015, a decrease in vacancy rates, including in the office market, and a relative stabilization of prices in dollars. Economic growth forecasts remain very conservative, but allow the real estate segment to prepare for recovery, RRG reports.
Main conclusions
The volume of supply in the sales and rental markets continued to decline in 2016. The trend is due to a reduction in the volume of new construction in all sectors of commercial real estate, the conclusion of transactions, as well as the fact that owners are removing their properties from display, not wanting to sell at dropped prices. The level of supply decline in the sales market turned out to be less than in the rental market.
Volume of supply for sale by total area increased in the retail and industrial-warehouse segment, while the supply of offices decreased by 18%. In the rental market, a decrease in supply volumes by total area was recorded in all segments, but the maximum correction was also observed in the office market - minus 25%. At the same time, offices continue to dominate in the supply structure. Yes, share office premises in the structure of supply for sale is 61%.
The weighted average sales price of commercial real estate for the year in rubles decreased by 10%, in dollar terms - by 20%. A negative correction was observed in all segments, however, the largest decline was demonstrated by vacant premises (minus 10% in rubles) and retail real estate (minus 8%). A decrease in prices in the context of a reduction in supply may indicate an oversupply of space on the market against the backdrop of a difficult macroeconomic situation.
The average rental market rate from December 2015 to December 2016 decreased by 2% in ruble terms and by 12% in dollar terms. At the same time, a negative trend in rates was observed in the office and industrial-warehouse sectors, while retail real estate, on the contrary, showed an increase of 8% in national currency. A decrease in rates was observed in the first half of the year, after which a slight increase was recorded. In general, we can talk about relative stabilization in the rental market.
* Research methodology
As objects for research of the commercial real estate sales market, commercial real estate objects put up for sale in open sources were selected - office, industrial and warehouse premises (PSP) and free commercial premises (PSN), as well as retail premises with a total area of more than 100 sq.m. In this case, for the purpose of analyzing price dynamics, the weighted average sales price is used, which is calculated as the ratio of the total cost of objects to the total area of these objects. As objects for research of the commercial real estate rental market, commercial real estate objects offered in open sources were selected - retail, office, industrial and warehouse premises (PSP) with a total area of more than 50 sq.m. For the purpose of analyzing price dynamics, the average rental rate is used, which is calculated as the arithmetic average of the prices of all objects, as well as the total annual rent(GAP), which is calculated as the amount of rent for the year.
Sale
Market as a whole
Supply volume
The volume of market supply fluctuated significantly in 2016. Without taking into account monthly fluctuations, we can say that until the middle of the year there was a decrease in the volume of supply, after which the volume of supply increased slightly.
From December 2015 to December 2016, the supply volume decreased by 13% in quantity, and in total area it increased by 10%, amounting to 1,609 objects with a total area of 2,646 thousand square meters. m.
Total area, thousand sq. m
Number of objects, pcs.
Price indicators
You can note a decrease in prices throughout the year. The decrease in ruble prices over the year was 10%, and in dollar prices - 20%. The weighted average price in December 2016 decreased to 187,275 rubles/sq.m., or $3,016/sq.m. m. A decrease in prices in the context of a reduction in supply may indicate an oversupply of space on the market against the backdrop of a difficult macroeconomic situation.
The total volume of supply by value in December decreased by 22% and amounted to 495 billion rubles.
Supply volume
In 2016, the volume of supply by total area increased by 23% for retail and by 56% for industrial and warehouse premises and decreased by 18% for office premises and by 51% for free-use premises.
The volume of proposals in December 2016 amounted to 305 retail properties with a total area of 245 thousand square meters. m., 997 office buildings with a total area of 1,617 thousand sq. m. m., 107 production and warehouse premises with a total area of 515 thousand sq. m. m. and 200 free-use premises with a total area of 269 thousand square meters. m.
In the market structure by total area, the leading position in December 2016, as before, was occupied by office premises, whose market share was 61%, second place with a share of 19% by industrial and warehouse premises. The share of free-use premises in the total supply was 11%, and the share of retail premises was 9%. The share of office premises decreased by 3% over the year, the share of retail premises increased by 2%, the share of free-use premises decreased by 7%, and the share of industrial and warehouse premises increased by 8%.
Total area, thousand sq. m
Judging by the decrease in the average area of office and free-use properties by 29 and 42%, premises are leaving the market large sizes, while for retail facilities and industrial and warehouse premises, the average areas of which increased by 5 and 45%, respectively, the situation was the opposite.
Price indicators
Price reductions were observed in all segments and amounted to: 8% for retail facilities, 3% for office premises, 4% for industrial and warehouse facilities and 10% for free-use premises.
The volume of supply in value terms for retail facilities increased by 13%, for industrial and warehouse premises - by 50%, for office premises decreased by 20%, and for free-use premises - by 56%.
Total cost, million rubles.
Retail real estate
Supply volume
In December 2016, the total supply area retail real estate in the center compared to December 2015 increased by 30%, and outside the center - by 23%.
In total, in December 2016, 30 objects were put up for sale within the Garden Ring and 275 objects outside it with a total area of 17 and 228 thousand square meters. m respectively.
The total supply of retail premises in December amounted to 305 objects with a total area of 245 thousand square meters. m with an average facility area of 800 sq. m.
Dynamics of indicators for retail premises
Price indicators
The price for retail properties in the center from December 2015 to December 2016 decreased by 16% to 720,703 rubles/sq.m. m, and outside the Garden Ring - by 7% to 214,948 rubles/sq.m. m. A more significant decrease in prices for objects in the center may be a consequence of a more significant price correction, since in 2015 there was a more significant increase in prices for objects in the center than for objects outside it.
The price for all retail premises in 2016 decreased by 8% to RUB 249,112/sq. m.
The value of the supply of retail premises over 12 months in the center increased by 9%, and in the periphery - by 14%.
Street-retail
The volume of supply of street-retail format objects in 2016 in terms of total area decreased by 3% and amounted to 23 thousand sq. m. m. In the center, the total area decreased by 27% to 3 thousand square meters. m, and outside grew by 3% and amounted to 19 thousand sq. m. m.
The weighted average price in the city as a whole decreased by 19% and amounted to 443,142 rubles per sq. m. m/year. In the center, prices increased by 1% to 1,161,727 rubles/sq.m./year, and outside the center, on the contrary, they decreased by 21% to 313,467 rubles/sq.m. m/year. As can be seen from the price dynamics, the demand for objects in the center compared to peripheral ones is higher, which confirms the traditionally higher investment attractiveness these premises.
Office real estate
Supply volume
The volume of office supply in the center decreased by 21% in total area and increased by 22% in number, while outside the center it decreased by 18% in total area and increased by 13% in number.
In total, in December 2016, 201 objects with a total area of 185 thousand square meters were put on the market. m within the Garden Ring and 796 objects outside it with a total area of 1432 thousand sq. m. m. Total supply office space amounted to 997 objects with a total area of 1617 thousand square meters. m with an average facility area of 1,622 sq. m.
Dynamics of indicators for office premises
Price indicators
Over the 12 months from December 2015 to December 2016, the weighted average price for office properties in the center increased by 13% to RUB 429,637/sq.m, and outside the Garden Ring it decreased by 6% to RUB 186,270/sq.m. m.
The price for all office premises in 2016 decreased by 3% and amounted to 214,089 rubles/sq.m. m. For office properties in the center in 2015, there was a more significant decrease in prices than for properties outside the center, so a significant increase in prices for facilities in the center in 2016 may be a consequence of the correction and equalization of demand that has occurred.
The decrease in supply volume in value terms was 10% to RUB 79 billion. within the Garden Ring and 23% to 266 billion rubles. outside its borders, and in general the cost of office properties in 2016 decreased by 20% to 346 billion rubles.
Rent
Market as a whole
Supply volume
Throughout 2016, several stages were observed in the development of the rental market.
From January to April, the volume of supply changed slightly;
From April to August its level decreased;
From August to December - it grew.
The overall decrease in supply by area over 12 months was 20%.
In December 2016, 2,748 objects with a total area of 1,572 thousand sq.m. were put on the market.
Price indicators
In the dynamics of rental rates throughout 2016, two periods can be distinguished:
From January to June the average level of rates decreased;
From June to December it also increased slightly.
The average rental market rate from December 2015 to December 2016 decreased by 2% in ruble terms and by 12% in dollar terms. In December 2016, the average rental rate was RUB 18,099/sq. m/year, or $291/sq. m/year.
The reduction in rates both in ruble and dollar equivalents, as well as prices on the sales market, indicates the continuation of negative trends in the market.
Comparative analysis by segments
Supply volume
The rate of decline in the volume of supply by total area in various segments in 2016 in the rental market was 14% for retail real estate, 25% for office real estate and 13% for industrial and warehouse real estate.
The volume of supply for the total area in December 2016 was: 212 thousand sq. m. m for retail facilities, 791 thousand sq.m. - for office and 569 thousand sq. m - for production and warehouse facilities.
Throughout 2016, the average area for retail premises decreased by 18%, for industrial and warehouse premises - by 10%, while for office premises - increased by 13%.
The average rate for retail premises from December 2015 to December 2016 increased by 8% to 32,255 rubles/sq.m. m/year, for office buildings - decreased by 6% to 16,705 rubles/sq. m/year, for production and warehouse premises - by 4% and amounted to 6,425 rubles/sq. m/year. Judging by the growth in rental rates, retail premises were in greatest demand.
The decrease in annual total rent from December 2015 to December 2016 amounted to 21% for retail premises, 31% for office premises and 16% for industrial and warehouse premises.
Retail real estate
Supply volume
The supply volume of retail space in December 2016 in the center decreased by 22%, while outside the Garden Ring - by 13%. The decrease in quantity was 5% and 18%, respectively.
In total, in December 2016, 62 objects with a total area of 15 thousand square meters were exhibited. m within the Garden Ring and 530 objects with an area of 197 thousand square meters. m beyond. The total supply of retail premises amounted to 592 objects with a total area of 212 thousand square meters. m with an average facility area of 358 sq. m.
Price indicators
The average rate for objects in the center in 2016 increased by 19% to 63,771 rubles/sq.m. m/year, and for properties outside the Garden Ring - by 4% to RUB 28,569/sq. m/year. Judging by the more significant increase in rates, the demand for properties in the center is higher.
Annual rent for properties within the Garden Ring decreased by 17%, and outside the Garden Ring - by 22%.
Street- retail
The volume of supply of street-retail format objects over 12 months in terms of total area decreased by 6 %, incl. in the center - on 37 %, and outside it increased by 1 % and amounted to 31 object with total area 8 thousand sq.m. in the center and 206 objects with area 53 thousand sq.m. beyond.
The average rental rate for 12 months increased by 1 % before 37 378 rub./sq. m/year, while in the center it increased by 22 % before 74 192 rub./sq. m/year, and outside it decreased by 4 % before 31 838 rub./sq. m/year.
Office real estate
Supply volume
The volume of office supply by total area from December 2015 to December 2016 decreased by 38% in the center and by 23% outside it. The reduction in the number of premises was 25% and 19%, respectively.
In total, in December 2016, 240 objects were exhibited within the Garden Ring and 1,393 objects outside it with a total area of 103 and 689 thousand square meters. m respectively. The total supply of office space in December amounted to 1,633 objects with a total area of 791 thousand square meters. m with an average facility area of 485 sq. m.
Price indicators
The average rate for office properties in 2016 generally decreased by 6% to 16,705 rubles/sq.m./year. Within the Garden Ring average rate decreased by 2% and amounted to RUB 25,569/sq. m/year, and in the periphery - by 6% to 15,178 rubles/sq. m/year.
Taking into account the significant reduction in supply, the total annual rent for office properties in the center decreased by 45%, and outside the Garden Ring - by 27%.
General market condition:
The ruble has strengthened; during the 2nd half of 2016, the ruble exchange rate remained at 60-65 rubles/USD versus 55-70 rubles/USD in the same period in 2015;
Annual inflation in Russia dropped to 5.6% from 12.9% in 2015;
The key rate decreased over the year from 11% to 10% in September 2016.
General condition on the Moscow market:
Since May 2016 industrial production Moscow is in the positive zone - for January-November 2016, the IPI was 102% (+7.5% compared to the corresponding period in 2015);
The volume of investments in fixed capital increased by 3% and reached 647.95 billion rubles. (for January-September 2016);
In 2016, the Moscow real estate market remained sluggish, only showing signs of recovery towards the end of the year.
Results of the Moscow real estate market:
In Moscow in 2016, the volume of investments remained at the level of 2015 and amounted to 4,003 million USD / 264,565 million RUB, share foreign investment - 5%.
In 2016, office real estate had a record low commissioning volume over the past 10 years; about 290 thousand sq.m. were commissioned, the largest share of space was class B+ (96%). The situation in the high-class segment in terms of vacancy level has improved: in class A the vacancy rate decreased by 22.4% (6.5 percentage points), in class B+ by 3.6% (0.6 percentage points).
In retail real estate, the vacancy rate over the year increased by 21% (2.2 percentage points), average rental rates decreased for the shopping gallery by 8.5%, for anchor tenants by 11.0%.
90% of apartments put on the market in 2016 were in the buy-to-live format. During the year, 1,750 apartments were sold, which is 25% more than last year.
Investments:
Volume of investments in real estate:
4Q 2016 - 1,106.5 million USD / 69,931 million rubles.
(dynamics by 3Q 2016: ↓ -14% in USD, ↓ -16% in RUB).
Investment structure 4Q 2016:
Commercial real estate - 86%;
Land plots - 14%.
4Q 2016 results:
Share of transactions involving foreign capital- less than 1%.
The largest share in the commercial real estate segment is occupied by offices - 56%. The largest transaction is the acquisition of the Alcon business center by Otkritie FC (102 thousand sq. m. for 17.6 billion rubles).
Results of the year:
The volume of investments in 2016 in Moscow is comparable to the level of 2015, amounting to 4,003 million USD / 264,565 million rubles. (↓ -0.2% in USD, +8% in RUB by 2015);
In 2016, about 70% of the total number of transactions in the commercial real estate sector were for offices. The largest transactions of the year: 2Q 2016 - Evolution Tower multifunctional complex (80 thousand sq.m. for 22 billion rubles); 3Q 2016 - President Plaza business center (194 thousand sq.m. for 37 billion rubles), Oko tower (55 thousand sq.m. for 14.3 billion rubles);
In 2016, only 5% of transactions from the total volume of investments in real estate were completed with the participation of foreign capital.
Forecast:
At the beginning of 2017, transactions worth approximately 800 - 900 million USD (50,000 - 57,000 million RUB) are expected to be closed.
Office real estate:
Input volume:
4Q 2016 - 44.5 thousand sq.m. GLA (dynamics by 3Q 2016: ↓-728%).
Market conditions:
Rental rates by class (dynamics by 3Q 2016):
“A” - RUB 1,890/sq. m/month (↓ -6.0%);
“B+” - RUB 1,330/sq. m/month(↓ -6.3%);
Vacancy level by class (dynamics by 3Q 2016):
“A” - 22.6% (↓-10.9% or ↓-2.8 p.p.);
“B+” - 16.3% (↓-2.6% or ↓-0.4 p.p.);
4Q 2016 results:
The average vacancy level in classes A, B+, B is 17.9% (↓7.5% or ↓1.5 percentage points by 3Q 2016);
The largest lease transactions were: 4.4 thousand sq.m in the Victory Park business center (tenant GC 36.6), 1.2 thousand sq.m in the Golden Gate business center (tenant Cotton Club) .
Results of the year:
In 2016, a record low level of commissioning volume was recorded for 10 years; 293.0 thousand sq.m. were commissioned. GLA (↓-552% by 2015). The largest share was in class B+ (96%);
In class A over the year, the vacancy rate decreased by 22.4% (6.5 percentage points), the reasons are low commissioning volumes and a decrease in rental rates by 28%;
In class B+, over the year the vacancy rate decreased by 3.6% (0.6 percentage points), the rental rate decreased by 16%;
The low-class segment changed slightly over the year - in class B and C, the level of vacancy and rental rates is comparable to 4Q 2015 (fluctuations within 2.5%).
Forecast:
In 2017, 450-500 thousand sq.m. are expected to be commissioned. the main volume of commissioning is planned for 2H2017, 60% of the planned offices are located within the Moscow Ring Road.
Retail real estate:
Input volume:
4Q 2016 - 126 thousand sq.m. GLA (dynamics by 3Q 2016: ↓-56%);
Introduced: Butovo Mall shopping center (57.0 thousand sq.m. GLA), Novomoskovsky shopping center (60.0 thousand sq.m. GLA),
Shopping center "FASHION HOUSE Outlet Center Moscow" 2 pts. (4.5 thousand sq.m. GLA), shopping center "Mango" (4.4 thousand sq.m.).
Market conditions:
for a shopping gallery - 38.9 thousand rubles/sq. m/year (+1.5%);
for anchor tenants - 12.9 thousand rubles/sq.m. m/year (↓-2.4%).
12.5% (+4.2% or +0.5 p.p.).
4Q 2016 results:
The vacancy rate in shopping centers opened in Q4 2016 is 40-60%;
The largest rental transactions were: 8.3 thousand sq.m in the Fashion Season shopping center (tenant Detsky Mir), 3.8 thousand sq.m in the Mega Belaya Dacha shopping center (tenant Hoff), 3 ,5 3.8 thousand sq.m. in the shopping center "4DAILY" (tenant "Miratorg").
Results of the year:
The volume of commissioning for the year amounted to 529.1 thousand sq.m. GLA (↓-13% by 2015);
The vacancy rate over the year increased by 21% (2.2 percentage points);
Rental rates decreased for the shopping gallery by 8.5%, for anchor tenants by 11.0%.
Forecast:
The maximum commissioning volume in 2017 may be 450 thousand sq.m (GLA). A more likely figure is 260-300 thousand sq.m.
The share of vacant space in current facilities will decrease to 10-11% (by 1.5-2.5 percentage points). When declared facilities open, the average vacancy level may increase to 15%.
Shopping centers expected to open in early 2017 claim more high bid for a shopping gallery, which may affect average (+3-4%).
Warehouse real estate:
Input volume:
4Q 2016 - 108 thousand sq.m. GBA (↓-39% compared to 3Q 2016).
Market conditions:
Rental rates (dynamics by 3Q 2016):
class A - 4,777 rub./sq.m./year (+14.5%);
class B - 4,229 rub./sq.m./year (+18.4%).
Vacancy level (dynamics by 3Q 2016):
class A - 14.3% (↓-12.3% or ↓-2.0 p.p.);
class B -13.0% (↓-13.0% or ↓-1.7 p.p.).
4Q 2016 results:
Positive dynamics were noted: an increase in rental rates and a decrease in vacancy levels;
In 4Q 2016, more than 220 thousand sq.m. were rented. The largest transaction was the rental of 62 thousand sq.m. in the Chekhov-2 complex by Smart LogisticGroup.
Results of the year:
In 2016, 514 thousand square meters were commissioned. m. GBA (↓-24% compared to 2015), 26% of commissioned warehouses are of the built-to-suit format.
In class A, rental rates increased by 3% over the year, despite vacancies increasing by 42% (4.2 percentage points).
In class B, rental rates increased by 10% over the year, and the vacancy rate increased by 33% (2.8 percentage points).
Forecast:
In 2017, it is planned to commission 300 thousand-400 thousand square meters of warehouse real estate belonging to class A.
The vacancy level may show an increase of 1-2 percentage points due to significant input volumes.
Apartments:
Offer:
Supply volume 4Q 2016 - 9,092 app. in 106 complexes, including:
Apartments buy-to-live - 7 927 app. in 92 complexes;
Apartments buy-to-let - 1,165 app. in 14 complexes.
The volume of the new offer is 366 ap. in 4 projects (↓-71.5% by 3Q 2016).
(“Nabokov”, “Monodom”, “Verden”, “Barberry” are all buy-to-live projects)
Offer structure: comfort class - 13%, business class - 70%, elite class - 17%.
Market conditions:
Sales prices:
Comfort class - 148.0 thousand rubles/sq. m (+0.9% to 3Q 2016);
Business class - 226.2 thousand rubles../sq. m (+4.7% to 3Q 2016);
Elite class - 475.4 thousand rubles/sq. m (+7.9% to 3Q 2016).
Demand:
in 4Q 2016, 550 units were sold (+37.5% compared to 3Q 2016). Average sales rates for the project: comfort class - 5 apartments/month, business class - 7 apartments/month, elite class - 3 apartments/month.
4Q 2016 results:
Increase in sales prices in all classes;
4Q 2016 saw record quarterly demand for the year.
Despite the general deterioration of the economic situation, experts do not predict any special shocks for the capital's commercial real estate market. Most likely, stability with zero or slight negative dynamics awaits him.
Denis Kolokolnikov, Chairman of the Board of Directors of RRG, talks about the main trends of 2016.
The end of December is approaching - the traditional time for voicing forecasts and expectations. Although today, I think many market experts would prefer not to say anything. We are also in a difficult situation: there is no desire to sow negativity and there is no way to promise positivity.
What is certain is that hopes for Russia’s quick recovery from the crisis have not come true, and therefore in 2016 the commercial real estate market will remain under the influence of negative external factors, which, naturally, will not contribute in any way to its active development. And even after the country manages to turn the economy around, the rehabilitation of all its industries, the establishment of new business connections, and the revival of business will take more than a year or two.
RRG experts identify five key trends that will characterize the Moscow commercial real estate market in 2016:
Trend 1 - Continued decline in investment activity
Worsening problems in the country's economy and difficult foreign policy relations will lead to a further drop in the level of activity of investors - and especially foreign ones - in the market.
Trend 2 - Falling rental rates and sales prices of properties
The decline in business activity will “push down” the demand for commercial real estate in all market segments, against the background of which rental rates, as well as property sales prices, will most likely continue to show negative dynamics. We do not undertake to indicate even approximate figures for the decline, since in a situation of almost absolute economic uncertainty this is nothing more than guessing from the tea leaves. I can only say that the positive forecast provides for zero movement in price indicators.
Trend 3 - Final transition to ruble pricing
In 2016, the process of transition to ruble pricing will be fully completed, RRG predicts. This trend looks rather positive: it is logical that in a country with a ruble economy, the cost of renting and selling commercial real estate is calculated in the national currency. Now, in fact, almost everyone has already switched to the ruble, and next year both nominal dollar rates and the habit of indicating the dollar value of objects in the media will sink into oblivion. You'll have to write more zeros.
Trend 4 - Repurposing and reconception of objects
The repurposing will mainly affect the office real estate segment, since there is a clear surplus in it. As in the last crisis, we can expect that those already built and those under construction office complexes will be partially converted into apartments - complete conversion is not permitted by law. In turn, promising projects for the construction of offices can be replaced by residential ones. By the way, the Moscow authorities recently announced this possibility.
In the retail segment, the reconception of objects will continue to gain popularity. Many shopping centers in Moscow are in need of renovation due to their age, and the crisis has only increased the need to revise their parameters, especially in terms of the tenant pool.
Trend 5 - Development of “secure” formats for retail, office and warehouse real estate
In any storm, there are fish that not only swim out, but even quickly end up where they would like to be. In the current situation, our “fish” are discount and fix-price stores, regional shopping centers with good locations, inexpensive restaurants, food courts...
It’s more difficult with offices, although in this segment, for example, B+ class business centers that adhere to an adequate pricing policy can be on top. As for warehouses, built-to-suit complexes will not be empty, as well as those offering premises in a smaller “cut” than usual.
In fact, back in 2014, operators of large facilities began to reformat them in order not to be left without tenants. And this trend will also continue and intensify.
- The volume of supply in the sales market decreased in all segments except industrial and warehouse premises, while in the rental market the change in supply volume turned out to be insignificant.
- Both rates and prices in dollar terms increased, with the exception of prices for vacant premises, while the maximum level of growth in both rates and prices was observed for retail real estate.
- Among the main features of development individual species Commercial real estate on the rental and sales market in the 2nd quarter of 2016 can be distinguished:
- In the retail real estate segment, prices for properties in the center decreased, and prices outside the center increased. The growth in rates for objects in the center was lower than for objects outside it. For street-retail, the dynamics of rates was similar, while for prices it was the opposite: prices for properties in the center increased, and outside it, on the contrary, decreased.
- On the office real estate sales market, prices for properties in the center decreased and prices outside the center remained almost unchanged, while rental rates increased both for properties in the center and outside the Garden Ring.
- Selling prices for industrial and warehouse premises have decreased, while rental rates have increased.
Main conclusion:
The increase in prices in some segments and rates in dollar terms turned out to be lower than the decline in the dollar exchange rate, as a result of which prices and rates in ruble terms decreased in the 2nd quarter, due to the difficult situation in the macroeconomics, while the selling market, judging by the decrease in prices in some segments and less high price growth for others, feels less confident than the rental market, which may be due to the difficult investment situation.
Research methodology
Information for this study was obtained from more than 30 specialized and thematic sources dedicated to the Moscow commercial real estate market. Sources include electronic real estate databases, print and electronic media, real estate agencies and consulting companies.
Office, industrial and warehouse premises (ISP) and free commercial premises (PSN) costing from $560 thousand, as well as retail premises costing from $400 thousand, or premises with a total area of not less than 100 sq. m. For the purpose of analyzing price dynamics, the weighted average sales price is used, which is calculated as the ratio of the total cost of objects to the total area of these objects.
Objects offered in open sources were selected as objects for research of the commercial real estate rental market - retail, office, industrial and warehouse premises (PSP) with a total area of at least 50 square meters. m. For the purpose of analyzing price dynamics, the average rental rate is used, which is calculated as the arithmetic average of the prices of all objects, as well as the total annual rent (GAP), which is calculated as the sum of the rent for all objects for the year.
Sale
Market as a whole
Supply volume
In Q2 In 2016, supply volume decreased by 15% in quantity and by 28% in total area. Over the year, compared c about 2 sq. 2015, the supply volume decreased by 26% in quantity, and by 36% in total area.
In total, in the 2nd quarter, 2,083 objects with a total area of 2,986 thousand sq.m. were put up for sale.
Price indicators 52.8 74.9 65.9
The weighted average price in the 2nd quarter of 2016 decreased by 2% and amounted to $3,293/sq. Taking into account that the dollar exchange rate decreased by 12% during this period,the price in ruble equivalent decreased by 14% to 217,000 rubles/sq.m. Over the year, from the 2nd quarter of 2015, the price in dollars decreased by 18%,and in rubles increased by 2%.
The total value of commercial real estate decreased by 30% for the quarter, and by 48% for the year and amounted to $9.83 billion.
The decrease in both dollar and ruble prices in the 2nd quarter indicates a gradual strengthening of negative trends in the market.
Charts for the market as a whole
total area
Number of objects
Weighted average price
total cost
Supply volume
The volume of supply in terms of total area in the 2nd quarter compared to the first quarter for retail real estate decreased by 29%, for office space - by 38%, for industrial and warehouse premises - increased by 17%, and for free-use premises - decreased by 10%.
The volume of supply in terms of total area for the year, compared to 2 sq. 2015, for retail real estate decreased by 60%, for office real estate - by 43%, for industrial and warehouse real estate - decreased by 46%, and for free-use premises increased by 9%.
The share of segments by area did not change significantly. The leader remained office space, the volume of which by area is 56%. Next come commercial premises (23%), retail premises (9%) and industrial and warehouse premises (13%).
Price indicators
During the 2nd quarter of 2016, the price for retail real estate increased by 7% to $4,480/sq.m, for office real estate - by 2% to $3,527/sq.m, for industrial and warehouse real estate - by 4% to $1,712/sq.m. , and for vacant premises – decreased by 9% to $3,139/sq.m.
Compared to the 2nd quarter of 2015, the weighted average price increased by 1% for retail and by 6% for industrial and warehouse real estate, decreased by 18% for office space and by 23% for free-use premises.
A more significant increase in prices for retail and industrial and warehouse properties indicates that the demand for them currently exceeds the demand for office properties.
Total area by segment
Number of objects
Average area
Weighted average price
total cost
Retail real estate
Supply volume
In the 2nd quarter, 445 retail objects with a total area of 282 thousand square meters were exhibited, of which 62 objects were inside the Garden Ring and 383 objects were outside it.
During the quarter, the supply of retail properties in the center decreased by 3% in quantity and by 24% in total area.
The volume of supply of retail properties outside the center increased by 9% in terms of quantity, and decreased by 30% in terms of total area.
Price indicators
The weighted average price for retail properties in the center for the 2nd quarter of 2016 decreased by 9% and amounted to $10,839/sq.m. At the same time, prices for long-exhibited objects practically did not change, and the price decrease was due, in particular, to the end of exhibition in the 1st quarter of two large and expensive objects on Novinsky Boulevard (1220 sq.m., $19,000/sq.m.) and on Arbat street (1413 sq.m., $25,129/sq.m.).
The weighted average price for retail premises outside the center increased by 11% to $3,877/sq.m, which was explained by the departure of several cheap properties from the market in the 1st quarter - on Yurovskaya Street (4,892 sq.m, $1,345/sq.m), Mytnaya St. (12,900 sq.m., 1,600 $/sq.m.) and on Andropov Avenue (90,000 sq.m., 3,090 $/sq.m.). Prices for objects exhibited for a long time increased by 9%.
Based on data for the 2nd quarter, demand for retail space outside the center significantly exceeded demand for retail space in the center.
Graphs of retail real estate indicators
total area
Number of objects
Average area
Weighted average price
total cost
Street Retail
Supply volume
In the 2nd quarter of 2016, 119 street-retail objects with a total area of 31 thousand square meters were put up for sale, of which 26 objects were inside the Garden Ring and 93 objects were outside it.
The volume of supply for retail properties in the center decreased by 13% in terms of quantity, and in total area - by 49%. The volume of supply for retail properties outside the center increased by 12% in quantity and by 1% in total area.
Price indicators
The weighted average price for street-retail properties in the center increased by 4% to $15,538/sq.m, while for old properties the price increased by 8%. The growth was also due to both the exit from the market in the 1st quarter of a cheap property on Zemlyanoy Val Street (469 sq.m., $5,767/sq.m.) and the exit in the 2nd quarter of an expensive property on B. Bronnaya Street (139 sq.m. m, 26981 $/sq.m).
Outside the center, the weighted average price decreased by 6% to $4,985/sq.m. The price decline was, in particular, influenced by the entry of two cheap properties onto the market - on Novozavodskaya Street. (832 sq.m., 1007 $/sq.m.) and on Trofimova Street (1767 sq.m., 2872 $/sq.m.), while prices for long-standing properties outside the Garden Ring increased by 6%.
Street-retail indicator charts
total area
Number of objects
Average area
Weighted average price
total cost
Office real estate
Supply volume
The volume of supply of office properties in the 2nd quarter decreased by 22% in quantity and by 38% in total area and amounted to 1,170 objects with a total area of 1,636 thousand square meters, of which 243 objects were exhibited in the center and 927 objects outside it.
The volume of supply of office space by total area within the Garden Ring decreased by 27%, and outside it - by 40%. Compared to the 2nd quarter of 2015, the total area of exhibited objects in the center decreased by 37%, and outside the Garden Ring - by 44%.
Price indicators
The weighted average price for office properties in the center in the 2nd quarter of 2016 decreased by 5% and amounted to $6,330/sq.m. The reduction in prices occurred, in particular, due to the end of the exhibition in the 1st quarter of an expensive property on Ilyinka Street (3,291 sq.m., $15,493/sq.m.), as well as the entry onto the market of two cheap properties - on Znamenka Street (3,000 sq.m., 2,477 $/sq.m) and on Mashkova street (7,585 sq.m., 3,176 $/sq.m), while prices for objects that have been exhibited for a long time have increased by 5%.
The weighted average price for office properties outside the Garden Ring in the 2nd quarter increased by 1% and amounted to $2,972/sq.m.
The fact that prices for premises in the center have decreased, and for properties outside the center have increased slightly, indicates an increase in demand for premises outside the center. However, based on the same rates of price growth over the year, we can conclude that medium term no such differences are observed.
Office real estate performance charts
total area
Number of objects
Average area
Weighted average price
total cost
Rent
Market as a whole
Supply volume
The volume of supply on the rental market in the 2nd quarter of 2016 decreased by 1% in quantity and by 5% in total area. Overall, over the past 4 quarters, supply has decreased in quantity by 25%, and in total area by 31%.
In total, 4,265 objects with a total area were exhibited in the 2nd quarter 2394 thousand sq.m.
Price indicators
Average the rate for the quarter increased by 7%, and comparedfrom the 2nd quarter of 2015- decreased by 35% and amounted to $286/sq.m./year.Considering that the dollar exchange rate has decreased by 12% over the year,the rate in ruble equivalent for the quarter decreased by 5%, and for the year - by 19% to 18,847 rubles/sq.m/year. Annual rent from the 2nd quarter of 2015 to the 2nd quarter of 2016 decreased by 56% and amounted to $0.555 billion.
The fact that the average rental rate in the rental market has decreased not only in dollars, but also in rubles, continues to indicate that, despite the relative stabilization in the macroeconomy, the situation in it and in the real estate market continues to remain difficult.
Charts for the market as a whole
total area
Number of objects
Average rate
Total gap
Comparative analysis by segments
Supply volume
The volume of supply in terms of total area for the 2nd quarter of 2016 decreased by 6% for retail, by 5% for office and by 4% for industrial and warehouse real estate.
The volume of supply by total area over the year of retail real estate decreased by 42%, office real estate - by 31%, and industrial and warehouse real estate - by 26%.
The leader in supply in terms of total area remains office space, the share of which was 51%. Next come industrial and warehouse (36%) and retail premises (13%).
Price indicators
The average rate for the 2nd quarter for retail real estate increased by 10% and amounted to 466 $/sq.m/year, for office real estate - by 6% to 268 $/sq.m/year, and for industrial and warehouse properties - by 8% to 104$/sq.m/year.
Compared to the 2nd quarter of 2015, the rental rate decreased by 32% for retail, 35% for office and 28% for industrial and warehouse real estate.
Benchmarking charts by segment
Total area by segment
Number of objects
Average area
Average rate
Total gap
Retail real estate
Supply volume
The volume of supply of retail real estate in the 2nd quarter decreased by 1% in terms of quantity, and by 6% in terms of total area. The volume of supply for the year decreased by 32% in quantity, and in the total area by 42%.
In total, 1,002 objects with an area of 311 thousand square meters were exhibited in the 2nd quarter. m, of which 96 objects are in the center and 906 rooms are outside it.
The volume of supply by total area in the 2nd quarter decreased by 8% in the center and by 6% outside it.
Price indicators
The average rental rate for retail properties inside the Garden Ring in the 2nd quarter of 2016 increased by 5% and amounted to $830/sq.m./year. The growth in rates was observed in the context of a 2% increase in rates for long-exhibited objects. The increase in rates also occurred, in particular, due to the release of two expensive properties in the 2nd quarter - on M. Bronnaya St. (367 sq.m., $2,128/sq.m./year) and on B. Bronnaya St. (139 sq.m. .m, 2,379$/sq.m/year).
The average rental rate for retail properties outside the Garden Ring increased by 11% and amounted to $427/sq.m/year. At the same time, rates for objects exhibited for more than the first quarter increased by 3%, and the share of expensive objects with rates above $400/sq.m/year increased from 30% in the first to 34% in the second quarter.
Rates for premises in the center increased less during the quarter than outside it, but over the year the decrease in rates turned out to be comparable, so it is impossible to talk about significant differences in the demand for retail space within and outside the Garden Ring in the medium term.
Results current year and the main trends in the office, warehouse, retail and hotel real estate markets were analyzed by the leading international real estate consulting company CBRE. The company’s specialists also determined the prospects for the commercial real estate market in the coming 2017.
2016 will be remembered for the stabilization of the real estate market, increased activity investors, albeit with a limited number of market investment transactions, a change in the mood of tenants - from revisions of lease terms to the conclusion of new transactions in all segments starting from the second half of the year.
According to expert forecasts, Russian economy in 2017 will show slight growth - from 0.5% to 2%. Basic scenario of the Ministry's forecast economic development(MED) expects economic growth to be 0.8% in 2017.
Against the backdrop of expectations for a gradual economic recovery, the main driver of growth in the commercial real estate market will be continued stability and the beginning of a new cycle, within which investors have good profitability potential
Despite the decline key rate Bank of Russia, the cost of bank financing still does not allow developers to start new projects. At the same time, they are effectively using the pause that has arisen: they are looking at sites, agreeing on the parameters of new projects and obtaining permits. This will allow them to take advantage of the improvement in debt market conditions expected next year.
Commercial real estate market trends in 2016
In 2016, there was a continued decline in the new supply of commercial real estate, especially in the warehouse and office markets, while the volumes of retail real estate commissioning remained high due to inertia. There was a reduction in the share of vacant space in the office segment due to activity government agencies and companies that, taking advantage of the situation, bought or rented large amounts of office space.
The market finally stabilized in 2016, and in the second half of the year, tenant activity increased significantly. This year, the prerequisites for the start of a gradual recovery of the commercial real estate market in 2017 have finally formed
Rental rates for commercial real estate are firmly established in the ruble zone (with rare exceptions), reached the bottom and stabilized in all segments. Volume of renewal transactions existing agreements leases, as well as the revision of their terms, decreased by a third. At the same time, since the middle of the year, there has been an increase in activity in concluding new lease transactions on market conditions.
For Moscow, 2016 was a breakthrough year in terms of infrastructure development: the Rumyantsevo and Salaryevo metro stations in New Moscow were opened, the Moscow Central Circle was launched, and by the end of the year it is planned to commission the first section of the Third Interchange Circuit.
CBRE analysts believe that the commercial real estate market experienced a final stabilization in 2016, and in the second half of the year, tenant activity increased significantly. This year, the prerequisites for the start of a gradual recovery of the commercial real estate market in 2017 were finally formed.
Investments in commercial real estate
According to Irina Ushakova, senior director, head of the capital markets and investment department at CBRE, the volume of investments in 2016 will increase by 29% and amount to $4.5 billion (or about 300 billion rubles). Moreover, 40% of this volume was formed by transactions concluded government agencies and state-owned companies, while last year there were no such transactions.
Russian capital dominated in 2016, accounting for 96% of the total transaction volume. The share of foreign capital in the volume of investment transactions decreased to 4% from 15% last year. However, we see high investment activity of foreign funds already represented on the Russian market, as well as additional capital inflow. A landmark deal involving foreign capital was the acquisition by the Arab fund Mubadala, together with RDIF, of warehouse buildings in two projects PNK Sheremetyevo and PNK Chekhov 3.
The leaders in terms of investment volume at the end of the year will be the office segment (44%) and hotels (17%). Moreover, the share of hotels this year is a record high over the past 10 years. Also in 2016, a high share of the residential segment was recorded (11%) - developers were actively buying sites for housing construction. The share of retail and warehouse real estate will be 18% and 4%, respectively.
The number of market investment transactions continues to be limited by the significant difference in price expectations between buyers and sellers, which constrains the closing of transactions
According to experts, the volume equity, available for investment in commercial real estate is about $3.5 billion (more than 50% of which is money from foreign investors), another about $1 billion for investing in housing. Taking into account borrowed money more than $10 billion are looking for real estate investment opportunities.
Against the backdrop of established stability and expectations of a gradual economic and market recovery, as well as an understanding of the available capital in the market in 2017, the volume of investment, according to CBRE forecasts, may increase to US$5 billion. The main driver of growth in this case will be continued stability and the beginning of a new cycle, within which investors have good profitability potential.
Office real estate
Elena Denisova, senior director, head of the office premises department at CBRE, believes that the first half of 2016 was influenced by trends formed in 2015: demand for office real estate was supported big deals that were carried out by government agencies or companies with state participation, were often non-market in nature and were associated with the settlement of debt obligations. Such transactions include the transition of the Eurasia Tower to VTB, the President Plaza Business Center to Sberbank.
Since the second half of 2016, indicators of the state of demand for commercial real estate have improved - there has been a tendency to increase the volume of new transactions concluded on market conditions
Another positive and significant moment for the office real estate market in 2016 was the decrease in vacancy rates. The share of vacant premises decreased most noticeably in the class A office segment: at the end of 2015, the vacancy rate here was 26%; at the end of this year, according to analysts, it will drop to 19.8%. In 2017, experts predict stability of vacancies in this class, since a number of large business centers are planned for commissioning. In class B, a more significant reduction in the share of vacant space is possible - from 15.2% at the end of 2016 to 14% in 2017.
According to CBRE estimates, the volume of new space commissioned at the end of 2016 will be 355,000 sq. m. m, which is two times lower than last year’s figure. In 2017, according to announced announcements, 440,000 sq. m. will be commissioned. m of new office offer. It is noteworthy that the main volume will be in Moscow City (210,000 sq. m) and the Central Business District of the capital (100,000 sq. m). The limited introduction of new high-quality facilities contributes to the further “washing out” of high-quality products from the market for large users.
Rental rates for office real estate are stable, and at the end of 2016 they will remain in the following ranges: for class A Prime - $800 - 900 per sq. m. m per year, for class A - 18,000 - 35,000 rubles. per sq. m per year, for class B - 13,000 - 28,000 rubles. per sq. m per year (all rates are excluding operating expenses and VAT).
In 2017, the nomination of requested rental rates will remain predominantly in rubles, and with the gradual normalization of the external background, an increase in rates in ruble terms by 5-10% is possible.
Warehouse real estate
According to Anton Alyabyev, director of the industrial and warehouse real estate department at CBRE, 2016 was a transitional year for warehouse real estate - from a slowdown phase to a phase of further stabilization of the market.
Economic fluctuations at the beginning of the year caused the implementation of a number of transactions to be postponed to a later date, which was reflected in low demand volumes in the second and third quarters of 2016. However, towards the end of the year there was a recovery in business activity: the volume of transactions with warehouses in the fourth quarter could reach 300,000 sq. m. m, which is the highest figure for the year.
In parallel with fluctuations in demand, there was a change in the trend in the movement of key market indicators - the share of free warehouse space and rental rates. The increase in vacancies at the beginning of the second quarter, which occurred due to the entry of end-user warehouse facilities into the market, quickly faded away. The share of free warehouses has remained stable over the past 6 months. At the same time, rental rates for warehouse space have remained at the same level for three quarters.
In 2016, CBRE analysts saw the emergence of new trends in the structure of supply and demand. Business activity is increasingly stimulated by new drivers - the move from old warehouse facilities to better ones, the transition from the premises of logistics operators to direct lease and the consolidation of warehouse capacity in large distribution centers.
These changes in the nature of demand, in turn, stimulated differentiation of supply. Developers offer various solutions for different categories clients. These could be high-tech built-to-suit warehouses designed to meet the needs of big business, which continues to grow. Companies that would like to move to a new high-quality building, but are more limited in financial resources, standardized Class A warehouses with a basic set of specifications are offered.
In 2017, the market will continue to operate in the current environment. The volume of commissioning will be further reduced, and new buildings will mainly be built for the client. Annual figure new supply is expected at 500-600 thousand sq. m. m.
Projected volume of transactions for warehouse market in 2017 may be at least 800,000 sq. m. The market stabilization that has occurred creates the preconditions for a gradual increase in business activity. In the second half of the year, we may see positive changes in market dynamics in the form of a gradual decrease in vacancy and an increase in rental rates for warehouses.
Retail premises, Moscow
Marina Malakhatko, director of the retail space department at CBRE in Moscow, believes that the volume of retail space commissioned in Moscow in 2016 will be about 427,000 sq. m. m, which is 3% less than in 2015. This volume is significant for the market, and the commissioning of 7 new properties caused a short-term increase in vacancies in the retail real estate market during the year, which increased to 11.4% by the third quarter. But by the end of this year, a systematic decrease is expected, and, thanks to a reduction in the volume of input, it will reach the 10% mark in the first half of 2017.
Volume aggregate supply high-quality shopping centers in Moscow by the end of the year will amount to 5.6 million square meters. m, and the provision of retail space is 456 sq. m. m per 1000 people.
New retail facilities opened from good level occupancy: in shopping centers in 2016, the vacancy level varies from 20-40%, while last year facilities opened with 50-80% vacancy. Number of retailers who left Russian market, greatly decreased: 2 brands in 2016 versus 11 in 2015
In 2017, a further decrease in the pace of commissioning of retail space is expected: about 273,000 sq. m. are announced for opening. m, which is 36% less than the volume of 2016. At the same time, one of the objects for next year - Butovo Mall (54,000 sq. m GLA), was originally announced for opening in 2016.
Among the largest shopping centers in 2016, it is worth noting Riviera (91,200 sq. m GLA), Oceania (60,000 sq. m GLA) and Good! (53,000 sq. m), Metropolis phase 2 (38,000 sq. m GLA). Vacancy rates at opening for new properties vary greatly depending on location and concept. On average, new retail properties opened with a good occupancy level: in shopping centers in 2016, the vacancy level varied from 20-40%, while last year facilities opened with 50-80% vacancy.
Over the 11 months of 2016, 32 international brands entered the Moscow market, and another 5 are planning to open their first stores in the capital by the end of the year. This is comparable to the figure for 2015, when 40 international brands entered the Moscow market. It is worth noting that the number of retailers leaving the market has decreased significantly: 2 brands in 2016 versus 11 in 2015.
The prime rental rate for retail space in Moscow was 100,000 rubles per sq. m. m per year, practically unchanged compared to 2015. In 2017, CBRE experts predict rate stability due to the preservation of sufficient high level vacancies of retail space.
Rental rates in shopping centers are finally denominated in rubles, or a corridor is fixed exchange rate. The owners are ready to provide discounts for the first year of rent, with a gradual increase in the rate in subsequent years. The form of interaction with the owner of a retail facility in the format of a percentage of turnover is an increasingly common and more comfortable practice for retailers, and is no longer used only for anchors, but also for medium-sized tenants of all profiles. A variety of schemes for structuring rental rates allow owners and tenants to find a compromise by choosing an acceptable option for commercial conditions within the framework of emerging market practice. The latter, in turn, is strongly tied to the turnover of retailers.
At the end of 2016, the turnover of luxury and economy class retailers in Moscow increased, in some cases the growth reached 30%. Mid-level retailers showed minimal growth in turnover at the end of the year
Retail premises in Russian regions
According to Mikhail Rogozhin, director of the regional retail space department at CBRE, at the end of 2016, the increase in retail space in Russia will be about 1.2 million square meters. m, of which 58% (719,000 sq. m) were introduced in regional cities, excluding St. Petersburg. The total volume of retail space commissioned in Russia decreased by 28% compared to previous year, and in the regions - by 40%. Among the largest new regional centers in 2016, it is worth noting MegaGrinn in Kursk (129,000 sq. m GLA), Maxi in Arkhangelsk (49,200 sq. m GLA), Sedanka City in Vladivostok (45,000 sq. m GLA).
The share of vacant retail space in Russian regions varies greatly from city to city. The average vacancy rate for million-plus cities today is 8-10%. But, as a rule, in every city there are projects with a good location and a strong tenant mix, in which the occupancy rate is close to 100%
In 2017, regional cities are expected to further reduce the volume of new retail space commissioned - to 637,000 sq. m. m, which is 11% less than in 2016. At the same time, some objects of 2017 were initially announced for commissioning in 2016, but subsequently the dates were postponed.
In general, it is worth noting the high potential for the development of the retail real estate market in cities with a low supply of quality retail facilities in the presence of good purchasing power of the population. Such cities today include Khabarovsk, Chita, Stavropol, Makhachkala, Noyabrsk and others.
The share of vacant retail space in the regions of the Russian Federation varies greatly from city to city and depending on the quality and location of the property. The average vacancy rate for cities with a population of over a million today is 8-10%, which is slightly higher than the vacancy level in 2015 of 7-8%. But, as a rule, in every city there are projects with a good location and a strong tenant mix, in which the occupancy rate is close to 100%.
Among the retailers represented in the regions, the most active in 2016 were the Lenta, X5 Retail, and Magnit grocery chains. At the beginning of the year, they announced ambitious plans for development in Moscow and the regions: Lenta - 40 hypermarkets, Pyaterochka - 1000 stores, Magnit - 950 stores and 80 hypermarkets. The current state of the market has allowed the networks to successfully implement their announced expansion plans. DIY retailers Leroy Merlin and OBI, electronics stores M.Video and Eldorado, and children's goods store chains Detsky Mir and Dochki-Synochki are also developing quite actively in regional cities.
Hotels
Stanislav Ivashkevich, Deputy Director for Development, Hospitality Industry, CBRE, believes that the main factor influencing the Moscow hotel market in 2016 was the growth of tourist traffic. According to preliminary data, by the end of the year the number of tourists in Moscow alone will be about 17.5 million people, the share of tourism consumption in the capital’s GRP will exceed 4% and could reach 470 billion rubles. Thus, of this volume, the share of hotel revenues could be about 60 billion rubles by the end of the year.
During 2016, the number of hotels managed by international chains increased by 3,772 rooms. The largest new hotel this year in Moscow was the Accor complex, which opened three hotels on Kievskaya Square: Ibis, Adagio, Novotel with a total of 701 rooms. Of the main regional openings, it is worth highlighting two large Marriott hotels in Krasnodar and Voronezh
Despite the fact that the overwhelming majority of tourists are Russians (70-75%), the increase in the flow of foreign tourists is now also really noticeable, as is the fact that it is happening primarily due to the Asian market in general and Chinese tourists in particular . According to Rostourism estimates, the increase in flow due to this group of tourists alone will be about 40% by the end of 2016.
Thus, in 2016, occupancy rates in Moscow hotels reached record levels, exceeding 70% in certain segments. The increase in occupancy, in turn, caused an increase in hotel rates, increasing the average ADR by 8% over 9 months of 2016.
The most strikingly positive dynamics of the average cost of a room was manifested in the segment of high-quality expensive hotels, where the most significant increase in ADR to the level of 20-22 thousand rubles was recorded in the group of leaders in this segment (for example, such premium hotels as Hyatt, Baltschug Kempinski, Four Seasons ).
At the same time, most hotels in the luxury segment are cautious and do not increase ADR, keeping it at the level of 12-15 thousand rubles. Thus, in the segment of the most expensive hotels, ADR now averages about 18 thousand rubles.
In the “average” and “below average” segments, there was no increase in accommodation rates in 2016. There are still strong dumping sentiments in the hotel market, and therefore many hoteliers have not raised prices, regardless of the growth in demand.
During 2016, the number of hotels managed by international chains increased by 3,772 rooms, of which 1,511 belonged to the Moscow region. The largest new hotel this year in Moscow was the Accor complex, which opened three hotels on Kievskaya Square: Ibis, Adagio, Novotel with a total of 701 rooms. Of the main regional openings, it is worth highlighting two large hotels of the Marriott chain in Krasnodar and Voronezh.
For 2017, 11 hotels have been announced in Russia under the management of international brands with a total room capacity of 2,566, of which 3 hotels are to be opened in Moscow: Four Points By Sheraton at Vnukovo Airport, Radisson Blu at the Novion MFC on Olimpiysky Prospekt and Hyatt Regency VTB Arena Petrovsky Park as part of the complex development of VTB Dynamo on Leningradsky Prospekt.
Review prepared by CBRE
