Key Market Indicators. Supply. Demand

Transcription

1 milliom sq m thousand sq m number of objects Key Market Indicators Total stock 17.2 million sq m Completion 74,6 sq m Vacancy rate 11.2% Take-up 423, sq m Rental rates in Class A* $44/sq m/year, in Class B $22/sq m/year Prime rental rates $68/sq m/year * Here and below asking base rental rate net of VAT and OPEX Supply Total stock in 217 amounted to million sq m, which includes 3.96 million sq m of Class A. In 217, the market stock grew by 74,6 sq m, which is almost 3.5 times more than in the first half of the year. Two of the four completed business centres belong to the Сlass A segment and two others to the B+/- segment. Completions for the first three quarters have been at a record low (95,73 sq m) level for the last five years. In fact, the annual completion volume will depend on the readiness of two towers in MIBC Moscow City, as they form 7% of planned completions up to the end of the year. If commissioning permits are obtained for all properties planned for completion by the end of 217, annual completion may amount to 45,-465, sq m. Demand Despite the low activity in the first six months, the number and quality of transactions in 217 suggest a revival in demand. For the first three quarters, the total volume of leased and purchased office space was 826, sq m, which is 3% higher than in the same period of 216. The total number of lease and purchase transactions increased by two-fold: rent and purchase activity showed both small companies renting offices of less than 2 sq m, as well as large companies that require more than 1, sq m. The share of renegotiations and renewals continues to decline and more than 8% of deals were for the relocation of companies., Completion (left scale) Completion in (left scale) Number of objects (right scale) ,5,4 44% 18% 16% 5%,3 15% 11% 8% 6% 8% 39% 16% 1% 18% 9%,2 23% 82%,1 56% 95% 84% 85% 89% 92% 94% 9% 92% 84% 91% 82% 61% 77%, Lease Sale 1 Office market overview 217 Moscow Colliers International

2 Vacant premises The vacancy rate has not undergone any major changes. The new volume of available completed space was compensated by moderate net absorption. The average vacancy rate amounted to 11.2%, which in absolute terms is 1.9 million sq m of premises available for rent and partly for sale. In the structure of vacant space, 32% is formed by Class A, 5% by Class B+ and 17% by Class B-. Due to the lack of offices over 1, sq m in high-quality buildings with convenient locations, a practice of concluding preliminary leases by large companies in the projects under construction has been established about 3% of business centres delivered in 217 and planned for completion up to the end of the year are no longer available. The existing volume of vacant spaces has a varying distribution with a shortage of quality supply for some submarkets 3% 25% 2% 15% 1% 5% % 16,4% 9,6% Rental rates 14,8% 15,1% 7,2% 7,% 24,6% 1,% 27,2% 18,5% 11,6% 11,7% The third quarter was characterised by stable rental rates. Traditionally, fluctuations have been observed in the denominated rates indicator because of the exchange rate volatility. The market remains in denominated in roubles. There was a small local change in rouble asking rental rates by submarkets and classes, but this did only increased the average market level by 1-3%. 15,9% 9,8% Class A Class B+/- In the CBD submarket, rental rates were RUB3,785/sq m/year for Class A offices and RUB2,24/sq m/year for Class B+. Sale prices In the sales segment, the trend from the beginning of the year remains with the amount of available quality space remaining small and stable asking sales prices. At the same time, since the middle of the year, there has already been a conversion of existing interest into real transactions the number of purchase transactions for office units less than 2 sq m has increased compared to the same period in 216. Price indicators in areas outside the CBD near the Third Ring Road (TTR) are RUB18, per sq m for Class A and RUB15, per sq m for Class B+/-. Objects located at a distance from the TTR towards MKAD are currently offered at an average of RUB17, per sq m in Class A and RUB115,-13, per sq m in Class B+/-. Expensive offices are offered in central districts at an average price of RUB315, per sq m for Class A and RUB265,-275, per sq m for Class B+/-. In MIBC Moscow City, offers vary in the range RUB245,-45, per sq m. Basic rents in US dollars for Class A are $44/sq m/year, while in roubles RUB25,831/sq m/year $/sq m/year $/sq m/year RUB/sq m/year Basic rents in US dollars for Class В+/- are $219/sq m/year, while in roubles RUB12,817/sq m/year I кв. 213 II кв. 213 III кв. 213 IV кв. 213 I кв. 214 II кв. 214 III кв. 214 IV кв. 214 I кв. 215 II кв. 215 III кв. 215 IV кв. 215 I кв. 216 II кв. 216 III кв. 216 IV кв. 216 I кв. 217 II кв. 217 III кв. 217 RUB/sq m/year Office market overview 217 Moscow Colliers International

3

4 thousand sq m Vacancy, % Trends and forecast > Developers have announced around 37, sq m for completion in, with Сlass A accounting for 34, sq m. If the planned projects are completed, the annual volume of new construction in 217 will increase by 5% compared to 216. > The completion of Class A objects will not have a significant impact on the amount of vacant supply in this segment due to the fact that three of the four Class A business centres have a vacancy rate of more than 1%. > If the commissioning of the MIBC Moscow City facilities are rescheduled for 218, the increase in the new supply will be 4% lower (that is, 197, sq m) than last year, which will cause the vacancy rate to grow from the expected 1% to 11.5%. > Taking into account that in the last two quarters the growth in the volume of transactions was 65% and 75%, and a significant amount of space is usually closed at the end of the year, the total demand may account million sq m. Despite the fact that the expected volume of demand may be higher than the figures for , it is still less than pre-crisis values. There will be a significant decrease in vacant volume and a gradual increase in rental rates by the end of the year > Reduction in the volume of quality vacant supply, especially in the segment of large blocks, against a background of positive demand will gradually push up rates in Class A and B+, which will most clearly show itself in F Completions, thousand sq m Average Rental Rate, $/sq m/year Vacancy rate, % Top new deals in Moscow in 217 CLIENT DEALS AREA, THOUSAND SQ M PROPERTY TYPE Tele Comcity Lease Technoserv 12. Delovoy kvartal Novospassky Dvor Lease Deutsche Bank 8.2 Aquamarine III Lease Europlan 8. Oasis Pre-Lease Top business centres expected for delivery in Moscow in 217* PROPERTY CLASS DEVELOPER 1 Federation Tower. East А AEON Corporation IQ Quarter А CiTer Invest B.V., Hals Development Delovoy kvartal Neopolis А A-Store Estates Kvartal Park Legend, bldg. 3 A GC TEN Kvadrat B+ Lenhart Global 9.5 * Business centres are marked on the map, p. 3 OFFICE AREA, THOUSAND SQ M 4 Office market overview 217 Moscow Colliers International

5