Commercial Real Estate

Russian Real Estate
Market Overview
THE FINE ART OF REAL ESTATE
Vladislav Lutskov
General Director
MIEL Analytic Consulting Centre (MIEL ACC)
September 2008
Moscow
Table of contents
1. Real Estate as Investment instrument
2. Posture in commercial and residential
real estate markets:
Office Premises
Retail Premises
Exhibition Premises
Residential Estate - Supply & Demand
Mortgage Lending
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Russian Real Estate Market Overview | Vladislav Lutskov | September 2008
Investment Instruments
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Russian Real Estate Market Overview | Vladislav Lutskov | September 2008
Commercial Real Estate:
Office Premises
Offices will be actively developed in Moscow
and other cities of Russia (population > 1 million)
during the next 4 years.
Offices construction and supply
in Moscow, ths.sq.m.
Average rental rates (offices),
Moscow, 2003-2008
MIEL ACC forecasts NON-REALIZED DEMAND ca.
2,2 mln sq. M OF OFFICE PREMISES in Moscow by 2013
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Russian Real Estate Market Overview | Vladislav Lutskov | September 2008
Commercial Real Estate:
Retail Premises
Retail premises market development stages:
2006-2010 – Market saturates in major cities
(population > 1 million)
2007-2017 – Developers migrate to smaller towns
(population > 300 ths.)
Perspective – Retail business formats change
for new perspective directions
Trade Centers construction and supply
in Moscow as of 1H 2008, ths.sq.m
MIEL ACC forecasts NON-REALIZED DEMAND
ca. 1,4 mln sq. m OF RETAIL REAL ESTATE in Moscow by 2013
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Russian Real Estate Market Overview | Vladislav Lutskov | September 2008
Commercial Real Estate:
Exhibition Premises
Moscow
Russia
Exhibition Premises of Russia ths.sq.m
Exhibition Premises of Russia, ths. sq.m
There are ca. 414,8 ths.sq.m
St. Petersburg
St.Petersburg
of closed display premises
Rostov-on-Don
Rostov-on-Don
in Moscow today
Krasnoyarsk
Moscow exhibition centres Krasnoyarsk
Nizny Novgorod
Nizhniy Novgorod
that meet morden standards:
Yekaterinburg
Crocus Expo, Expocentre, All- Yekaterinburg
Russia exhibition centre, Sokolniki Krasnodar
Krasnodar
Exhibition premises development
prospects in Moscow: increase
at 19,8 % within next 5 years
0
10
20
30
40
50
MIEL ACC forecasts NON-REALIZED DEMAND ca. 680 ths. sq. m
OF EXHIBITION PREMISES in Moscow by 2013
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Russian Real Estate Market Overview | Vladislav Lutskov | September 2008
Residential Estate:
Supply&Demand
Housing stock of RF equals
about 3 billion sq.m,
including 3.2% of ramshackle
housing and those under the
threat of collapse
Residential area
per person, sq.m.
495 000 migrant families have arrived
in Moscow during 10 last years
50 000 apartments are to be built per year in Moscow
to supply migration demand specifically, while
35 000 apartments are offered for sale only
81 000 000 Russian residents are willing
to improve the conditions of living
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Russian Real Estate Market Overview | Vladislav Lutskov | September 2008
Residential Estate:
Supply
Average price on residential
market & cost of construction
Average price of supply
in Moscow & regions
Source: MIEL ACC
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Russian Real Estate Market Overview | Vladislav Lutskov | September 2008
Residential Estate:
Demand
Demand for better living
conditions
High / average
Low
41%
New residential estate
construction, ths.sq.m
Demand saturation
59%
MIEL ACC forecasts NON-REALIZED DEMAND ca. 60 mln sq. m
of RESIDENTIAL REAL ESTATE in Moscow by 2010
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Russian Real Estate Market Overview | Vladislav Lutskov | September 2008
Mortgage Lending Trends
in Russia
Mortgage volume growth
in 2007: 111%
Issued mortgage loans as for
the 1H2008: $14,5 bln
Mortgage transactions share
growth among purchase and
sale transactions (Moscow region)
2006 – from 10 % to 15%
2007 – from 15 % to 20%
2008 – expected growth to 25%
Mortgage lending in regions of Russia
Moscow
and Moscow region
Tumen region
Saint-Peterburg
Novosibirsk region
Sverdlovsk region
Source: Central Bank of Russian Federation, Eurotrustbank
Share of mortgages in Russia & USA, GDP
Mortgage loans
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Russian Real Estate Market Overview | Vladislav Lutskov | September 2008