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Investment volumes in commercial real estate in Russia has reached $1.13 billion in Q3

According to Cushman & Wakefield, the world’s largest privately-held commercial real estate services firm, investment volumes in Russian’s real estate reached $1.13 billion in Q3. The market shows stable development with Q3 volumes remaining at the same level as in Q2.

Moscow continues to dominate investors’ agenda attracting more than 80% of all investments in Russia – with $1.08 billion in Q3 and $4.33 billion YTD. St. Petersburg is way behind, still being the second market with only $50 mln being transacted in Q3. The regional market is underdeveloped with investors focusing their interest to large cities.

The office sector attracted the majority of investment ($844 mln) , largely accounted for by the $740 mln sale of “White Gardens” business center. Investment in retail reached $250 mln in Q3. If all the transactions in progress are closed this year, 2013 will be record for in investment in Russian retail real estate. Warehouse and Industrial accounts for $33,2 mln.

Total investment volumes YTD in the Russian market is $5,75 billion. Moscow trails leading European markets of London and Paris. Cushman & Wakefield, Russia expects that by the end of 2013 the total investment volume will reach $7.9 billion. Next year will be less active with forecasted volumes of 7.5 billion.

Prime Office Yields in Moscow – 8,5%, 9,25% for shopping centers and 11,5% for warehouse and industrial. That is 250 b.p. higher than average European level and 450 b.p. higher then London and Paris.