CAPITAL MARKETS REVIEW 2015

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According to Cushman & Wakefield, total investment volume contributed to Russian real estate market in 2015 amounted to $2,47bn. However, the last quarter saw $444mln, which is the lowest quarter investments amount since 2008.  

As a comparison – total amount of real estate investments volume last year amounted to $4,3bn. However, this year result is still somewhat higher than that of critical 2009 when investors contributed to Russian real estate total sum of $2,2bn.

As always, investors were focused on Moscow. According to Cushman & Wakefield preliminary calculations, Moscow real estate market attracted approximately $2,2bn, which makes about 90% of total volume of transactions closed in 2015.   

Warehouse & Industrial market saw the highest activity with 24% of total investment volume contributed to the segment. For the reference – last 5 years W&1 saw average investment share of 11%.

26% of investments went to retail market – the figure is relevant to those the market saw last 5 years.

Investment share to Office market is consistent as well and makes 48% of the total capital flow to Russian investment market.

Share of Russian capital makes about 66% of investments. Share of European investments amounts to 26% - this is much  more than last 5 years, when European capital secured only 5.

American investors contributed 7% of total capital flow. The interest of Middle Eastern and Asian investors has not been actualized yet, except of some singular examples.

Cushman & Wakefield researches retained the cap rates on the same level 11% for offices, 11% for retail and 13% for Warehouse & Industrial

Andrey Bezverkhiy, Associate at Cushman & Wakefield Russia Capital Markets, says: “This year investment transactions volume decreased by 43% compared to 2014. Yet this shell not be regarded as absolute indicator to appraise the current situation. The most significant factor to drive such decrease was devaluation of ruble by 56% in 2015 compared to 2014. This year outlined conversion to ruble economy (ruble income and expenses) in every commercial real estate sector. Prices for assets are defined based on ruble calculations, thus it is appropriate to define the decrease by 10% or 17bn rubles (from 150bn rubles to 167bn rubles). We might see some revival as investors has adapted to the situation

In 2015 Russian market witnessed rising interest of Asian and Middle Eastern investors. This is proved by the fact that Chinese Fosun Group entered Russian market.”