Russia: Moscow Getting Very Expensive To Rent Property!


Just found a tidbit of information about renting office space in Moscow….
Rent in Moscow business centers had skyrocketed. According to consultants Cushman & Wakefield & Stiles & Riabokobylko, the average cost for 1 sq. m. of class-A office space, not counting VAT, services and other charges, rose within the Garden Ring rose from $1000 in March to $1200 in April, up 75 percent in one year, and 20 percent in one month, that is 14 times more than the official inflation rate for that month of 1.2 percent. C&W&S&R say that Moscow has passed Paris in the rating of expensive office rentals, and may exceed London by 2010.
In the first quarter of this year, total office space in Moscow reached 7.31 million sq. m., almost 60 percent of which is in the Central District. Rent is rising is other parts of the city as well. Rent in Moscow City rose 40 percent in a year to $1340 per sq. m. in April. There is also high demand for office space in the northern bedroom neighborhoods, although rent there has increased only 1 percent in a year, to $600 per sq. m. In London, Europe’s most expensive capital, prices in the Western part of the city, the section favored by large corporations, are rising by 2-5 percent annually.

The situation in Moscow is due to reduced new construction in the center of the city. While it was planned to build 155,000 sq .m. of new office space in the first quarter of this year, much less than that was built. Furthermore, city officials have banned the building of new office space in the center. Until 2009, only projects begun before the moratorium will be completed. Olga Yasko of Colliers International said that 377,000 sq. m. of new office space were made available in 2007. This year, 429,000 sq. m. are planned, and next year 524,000 sq. m. will be made ready. The financial crisis has forced up the cost of credit for developers from 10-11 percent to 18 percent annually, which is also reflected in the prices.

Leaves me out of the office renting game.

Kyle & Svet

comments always welcome.

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