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Feliks Blinov “In difficult economic times it is office property that is always afloat”


Feliks Blinov, CEO of the RWM Investment Group, gives NEWS. Real Estate his opinion about the situation on the commercial property market of Russia How can you describe the general situation the Russian commercial real estate market finds itself in?

Feliks Blinov: “As commercial property is a specialization of our Company we are closely watching for any new trends emerging here. There are several key changes that this market is currently undergoing. A small amount of high quality property offers leads to the lessening numbers of Class A and B+ business property vacancies – with 3 million m2 between 2014 and 2016 but only 2,2 million m2 this year.

The real estate market of St. Petersburg also lacks high-quality business property vacancies. As a result a lease rate goes high: on the Class A business real estate market it grew by 6.5% in the third quarter of 2017 compared to the lease rate in December 2016; on the Class B property market it increased by 9,5% mainly because customers gave preference to cheaper options. An average lease rate for Class A office property now amounts to 1 830 RUB per m2 per month (Maris Investment Group).

In Moscow the Class A business property market shows almost no growth. Nevertheless there are circumstances that give us grounds for hope. Top-quality office buildings within the Garden Ring of Moscow are scarce in quantity. The demand for them is predicted to be growing in 2018-2019 with the amount of offers on this market remaining the same. It means a lease rate growing and vacancies going down.

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