• 209,000 sq m of office space were delivered in Moscow in Q1 2014
• Total office quality stock exceeded 14 ml sq m
• 260,000 sq m of office space was leased or purchased in the beginning of the year
• Vacancy grew up to 12,7%
In the Q1 2014 Moscow office market witnessed downward movement, says leading consulting company Cushman & Wakefield. The total volume of leased or purchased quality office space was by 36% lower the similar figure of Q1 2013 (410 000 sq m). Concurrently new office delivery was respectively high, thus the vacancy increased 0.5% to 12.7%. The average rental rate in first quarter was lower than at the end of 2013.
209 000 sq m of office space was delivered in Moscow in Q1 2014, with key Class A developments: Morozov II and Eurasia Tower. The Morozov II was preleased before delivery, but Eurasia Tower significantly increased the stock available in Moscow City.
Four large office projects are to be delivered by the end of year: two towers in Moscow City - Evolution and OKO, and ComCity and Arkus, phase II. Cushman & Wakefield forecasts, that 700,000 sq m of new quality office space will be added to Moscow office stock during 2014.
Cushman & Wakefield expects that office supply will continue to be higher than demand. The new delivery will exceed the absorption that will result in higher vacancy rate in Moscow.
Cushman & Wakefield forecasts the decrease of office rents, especially in Class A segment, that will stimulate tenants to look for better quality. Economic and political risks will be restrictive factor for office market.
Accourding to Julia Bogomol, Head of Monitoring Group Cushman & Wakefield, Russia average asking rents in 2014 will decrease for Class A space down to $800 for sq m and for Class B space to $500 per sq m per annum (triple net).