Office market snapshot

Transcription

1 Office market snapshot Moscow 1 st half of

2 Moscow office market Macroeconomics In July 2014 the International Monetary Fund significantly reduced the RF GDP s growth forecast from 1, 3 % to 0, 2% for 2014 and from 2,3 % to 1% for These are the lowest growth rates among the world leading economies. Tightening access to international financial markets driven by sanctions led to ruble depreciation and growth of the domestic interest rates. Since July 28, 2014 the Central Bank has raised its key interest rate up to 8%. Moscow Earnings of population. In May 2014 the average nominal wage across all types of entities amounted to 58, 422 rubles. The wage decreased by 9,2% against April 2014 and increased by 9,5% against May Real wages adjusted to the inflation in the period, stood at 101,19% in May 2014 against May 2014 and 90, 2% against April Forty percents in structure of earnings is currently attributed to remuneration from work and social payments (it is over 65% across Russia). Property generated earnings make up from 15,0% to 16,5%, and other earnings (proprietary receipts, proceeds from currency sale and etc.) comprise 27%-28%. No significant changes are anticipated in the near future. The share of earnings from work remuneration and entrepreneurial activities 1 will increase by 1-2 %. As of the end of the first half of 2014, the inflation rate (as % by December 2013) reached 5,3% (with 3,7% in the same period last year). Labour market. Due to emerging demographic situation Moscow is likely to see lack of labour resources. As a result of it the registered unemployment rate is forecasted to make up 0,5% of the economically active population in 2014 with a further 0,4 % reduction in Supply. By the end of 1H 2014 Moscow had 13,8 million sq.m of quality office space. Indicators of Moscow office retail market, Q Indicators Class A Class В+ Class В- Quality office space, total stock thou. SQ M Structure 22% 78% Commissioned in 1H 299,3 239,7 2014, thou. SQ M Vacancy rate 22% 15% Asking rates 1 USD /sq.m/yr Center Other districts Asking sales prices, USD/sq.m /yr (VAT exclusive) Center Other districts Operating expenses, USD/sq.m/yr Since 2013 the new stock went up, part of which is projects announced before crisis. Longevity of development process further added to the trend. In 1H 2014 the 539 thousand sq.m got commissioned. More than half of that office space is accounted to Class A. 1 Data of the social and economic development of Moscow for 2014 and planning period 2015 and

3 The volume of quality office space supply, Class, В+/В-, thou. sq.m Distribution of the office space delivered in 1H 2014 by business areas 1,8% 1,1% Center 9,3% 2,7% West 7,0% 35,8% North Outside Moscow Ring Road South 42,3% South-east South-west By the end of 1H 2014 the vacancy rate in class A amounts to 20% and up to 16% in class В+/В-. With new stock coming to the market, the vacancy rate is expected to increase in 2014, although in the current economic situation there are no prerequisites for significant growth in demand. Most construction of the office premises is concentrated outside TTR (Third Ring Road). So for the first half of 2014 about 64,3% of the office space is delivered outside TTR with 9,3 % located outside Moscow Auto Ring Road (MKAD). Vacancy rate, Distribution of the office space delivered in 1H ,3% 7,4% 28,5% Center 54,9% Garden Ring - Third Ring Third Ring - Moscow Ring Road Outside Moscow Ring Road 3

4 New office space delivered in Moscow in 1H 2014 Building name Class Address Area, sq.m, GВ President Plaza Kulneva str., Eurasia Tower Presnenskaya (Мoscva City) embankment. Business center in В+ Poklonnaya str., the Poklonnyay st. Arkus 3 Leningradsky prosp build. 1 Mirax -Plaza В+ Kulneva str Mebe One (Khimki) МD, Khimki, Leningradskaya str. 25 Bosh В+ МD, Khimki, Vashutinskoye highway., 20 Business center in the Vorontsovskaya str. В+ Vorontsovskaya str., rma В+ Nizni Susalny narrow passage Business center in В+ Rozhdestvenka str., the Rozhdestvenka str. 8/15 стр. 1, 2 Solutions В+ Kirovogradskaya str., Red Rose Timura Frunze str (Morozov 2) Avrora business Sadovnicheskaya str., park, building F 82, house 2 Dominion Tower Sharikopodshipnikovs kaya str., 5 Schelkinsky В+ Schepkina 51/4, house 2 Rodchel В+ Rodchelskaya str., At Cheremushkinska ya В+ Bolshaya Cheremushkinskaya str., 13, house At Kazach ya В- 2d Kazachiy passage, В+ Nikoloyamskaya str At Nikoloyamskaya 24 house 1 Interyer В- 1 st Magistralny prospect, 11, house 1 At В- Sadovnicheskaya Sadovnicheskaya embankment 71/80 house 3 Total BC President Plaza и Mirax Plaza in the Kulneva str. 900 thousand sq.m are in the pipeline, however, given traditional delays only some 500 thousand sq.m might be delivered by the end of the year. The total office stock will reach 1 million sq.m, thus getting to the 5-year high. Total pipeline for the period up to 2016 is 3 million sq.m. It is nearly one quarter of the current supply. Large proportion of the office space (35% of the pipeline), will be constructed inside the Central Administrative District (CAD). 18 % and 13% respectively will come to being in historically favored locations of Western and South-West Administrative Districts. Most construction of the office premises is concentrated outside TTR. It amounts to 56% with 36% within the borders of Moscow Auto Ring Road (MKAD) and 20% outside MKAD, including New Moscow (Com City, K2 business park), Khimki ( project in Butakovskiy zaliv (gulf), Aero City, Roto Tower etc.) and Krasnogorsk (Manhattan Tower). 4

5 Important BC projects to be delivered in Moscow in 1H 2014 MFK OKO (MIBC Мoscva-City) Building name (business center name) Class ddress Office space, SQ M, GВ ОКО (Moscva - City) ComCity Lotos Evolution Tower (Moscva-City) Vereiskaya Plaza, 3 Оruzheiny Port Plaza MFK Vodny, Phase 1 Nizhegorodskyi Savelovskyi City K2 Business-parki (buildings and В) Aero City Presnenskaya embankment Kievskoye highway, В+ Odesskaya str., Presnenskaya embankment В+ Vereiskaya, Оruzheinyi, В+ The project N 4062 passage., structure 6 В+ Golovinskoye highway., 5 В- Nizhegorodskaya, 29/33 В+ Skladochnaya, structure.1 Kaluzhskoye highway., 2 km МD, Khimki, Kurkinskoye highway Bolshevik, Phase 1 Leningradskyi prospect., 15 Aerodrom В+ Leningradskyi prospect, 37/7 Mininskaya Plaza В+ Miniskaya str., 2Ж Roto Tower В+ МD, Khimki, Kirova str., Romanov Dvor, Romanov passage., Phase Total Over 90% of new stock to be delivered by 2016 is placed outside the Garden Ring. The largest proportion is in the developing downtown business district, stretched along the Leningradsky highway. It includes the territories outside Moscow Auto Ring Road (MKAD), New Moscow near MKAD and the Moscow City business area in the West. ComCity (New Moscow) It is important to consider the real estate market volatility. If the economic situation deteriorates and banks go robust on debt financing in new stock is likely to go down. In the mid-run, within 3-5 years, the market largely concentrates in Western, Northwestern and South-western quadrants, which are favored by the tenants. 5

6 Demand. In Moscow, the overall absorption is generally stable at 1,2-1,3 million sq.m per annum. In 1H 2014 the total volume of take up was about 400 thousand sq.m, which is 35% less than in the preceding two years ( ). The net absorption 2 amounts to 150, 000, which is 30% down on year-to-year basis. The vacancy rates continue to grow. Characteristics of demand: The number of large transactions (over 2000 sq.m) continues to reduce. The average transaction reduced to 500 sq.m against sq.m in Demand pattern depends on the location of the business center. Areas inside the Garden Ring show prevailing demand for premises below 300 sqm while in locations inside TTR (Third Ring) it starts from 300 sq.m. Leases overrun sales. Demand is largely for fitted out premises. GVA Sawyer estimates that this trend will prevail over the coming 2,5 years (especially among Class B tenants). Most of the transactions are in class B (60-65% of the total) and are made by Russian companies. The number of transactions outside MKAD reduced (from 15% to 3-4%) in compared with The largest deals (50% of the total volume of take-up) are concentrated within TTR- MKAD area. However, in 2014 TTR saw the higher volume of take-up (about 70%), inter alia due to large transactions in the Moscow City development. Tenant Building nameclass (business center) Area, SQ M ING BANK Amber Plaza Modis Wall Street Verofarm Yuzhnyi Port В Mobile operator Metropolis Tele2 PPF Life Lesnaya Skazka Insurance Mazda Motor Metropolis RUS Eli Lilly Vostok Naberezhnaya S.A. Tower Avito.ru White Gardens Troika D Bank Plaza Н2О В OTP Bank Alcon Wella Wall Street Professionals Raiffaisen Life Newton Plaza In 2014 Rostelecom downsized from 90 thousand sq. m to 58, 5 thousand sq. m. This stemmed from the internal restructurings. Overall, the proportion of pre-leases (as signed prior to commissioning) remains at a low level (5% of the total take-up). Some of the largest lease deals (more than sq.m), announced in 1H 2014 Tenant Building nameclass (business center) Area, SQ M Sistematika Comcity GE Naberezhnaya tower PepciCo Alcon Google Bolshevik Net absorption represents the change in the occupied stock within a market during the period. 6

7 Rental rates The average asking rental rates have been stable over the recent period ( ) showed rents decline. In 1H 2014 the rental rate in class A decreased by 3-4%. The rental rates in class B decreased by several points. This is especially true for new buildings with high vacancy rates. GVA Sawyer estimates, that by the end of 2014 rents will go down by the average of 5 % per annum. Given the high volume of space under construction and reduced net absorption, the adjustment will primarily affect new office space. Given the increased availability of space and competition in Class A, rental rates in some of such business centers will be near those for Class В+ in the same area. Average rental rates based on location of business centers US$/sq.m/triple net Location Rental rate U/sq.m/yr for class A Boulevard Ring Garden Ring Moscva City TTR TTR-MKAD MKAD Rental rate U/sq.m/yr for В+/В- The highest rental rates (excluding the Central Administrative District) were recorded in the North- West, South-West and Western Administrative districts. For these areas the rental rates are $ in Class A, $ in Class В+ and $ in Class В-. Weighted average rental rates US$/sq.m/triple net Lease terms: Payments. Quarterly in advance. Currency. RUR, USD, Euros (rarely used). Deposit. 1-3 months. Indexation. 3-5% or 10% (RUR). VAT. 18%. Operating expenses. The average is USD/sq.m/yr for Class A, USD/ sq.m/yr for Class В, USD/sq.m/yr for Class В-. 7

8 налитический документ по исследованию рынка недвижимости 2012 GVA Worldwide Contacts Australia Austria China Cyprus Denmark Estonia Finland Germany Great Britain Greece Hong Kong (PRC) Hungary Ireland Italy Lithuania Netherlands New Zealand Poland Russia Sweden Switzerland Head office (Moscow) Bernikovskaya Embankment House , Russia, Moscow Nikoloyamskaya St., 13, str.17 Тel: +7 (495) Fax: +7 (495) Office in St. Petersburg BC Mir, Efimova St., 4a, office St. Petersburg, Russia Тel: +7 (812) Office in Krasnoyarsk Diktatura Proletariata St., 32 office Krasnoyarsk, Russia Тel: + 7 (391) info@gvasawyer.com Office in Krasnodar Krasnodar, Russia Zipovskaya St. 5, building 6, office 209 Тel: +7 (495) info@gvasawyer.com Подготовлено GVA Sawyer