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And Premium-Class ST. PETERSBURG RUSSIA ST. PETERSBURG RESIDENTIAL MARKET Business- and premium-class 2019 RESULTS 2 | St. Petersburg January 2020 January Residential Market of business- and premium-class | Colliers International | Colliers and premium-class of business- Market Residential * MONODOM na Malom (Alpha), the exclusive broker of the project is Colliers International. KEY INDICATORS OF BUSINESS- AND PREMIUM-CLASS 2018 2019 Commissioned, thousand sq m* 480 337 New supply, thousandsq m* 758 627 Demand, thousand sq m** 284 342 Demand, apartments** 5,060 6,540 Weighted average bid price for classes at the end of 2019, RUB/sq m Business-class 152,400 171,700 Premium-class 202,400 221,400 * The total area of residential premises, including balconies and loggias. ** Total sales committed by physical persons in 2019. 3 Residential Market of business- and premium-class | Colliers International | Colliers and premium-class of business- Market Residential 2020 January SUPPLY | St. Petersburg | St. Petersburg At the end of 2019, 3.45 million sq m In January–December 2019, thirty-four of residential space was commissioned new projects were launched on the in St. Petersburg, which is 13% less St. Petersburg market. The increase in than the record year 2018, which new supply amounted to 627,000 sq m of saw the delivery of 3.95 million sq m. residential space in new and completed complexes, which is 17% less than in 2018 In the business and premium segments, (758,000 sq m). This decrease is due to the volume of completed residential the fact that the bulk of projects went on space amounted to 337,000 sq m, which sale at the end of 2018: developers tried is 30% less than in 2018 (480,000 to bring projects to the market before sq m). In 2019, the last phases of the the changes to 214-FZ were made. By Life-Primorsky (Pioner) and Palazio the end of 2019, development activity (Setl City) business class complexes resumed and more than half of the new were completed. Construction was supply (54%) went on sale in Q4 2019. completed of the projects MONODOM na Malom (Alpha) and Bau House (Bau City), Petrovskiy Kvartal na vode (Setl City) and Dom u Nevskogo (RBI). CHART 1: 400 New supply and launch 340 of business- and premium- 350 321 projects 300 thousand sq m 244 250 239 New projects 220 Commisined projects 200 156 144 135 150 118 121 100 38 46 50 27 31 20 4 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2018 2019 Source: Colliers International 4 | St. Petersburg TREND FOR REDEVELOPMENT IS CONTINUING: HALF OF BUSINESS AND PREMIUM CLASS PROJECTS COMING TO THE MARKET IN 2019 ARE REDEVELOPMENTS OF FORMER INDUSTRIAL AREAS. January 2020 January The Moskovskiy district was the leader in 2019 in the number of new business class redevelopment projects. Kvartal CHE (Etalon) is now being built on the site of Hladokombinat No. 1, and Defans is being built on the site of the Chesmenskaya substation (Leader Group). Active development of the Petmol factory continues, with new buildings launched for sale as part of Galaktika — Galaktika Pro (Etalon), as well as Promenade (Akvilon-Invest). Premium class projects are now appearing on sites that 10 years ago were only suitable for business class projects. We can see examples of new projects on Petrovskiy Island an in the Admiralteyskiy and Centralniy districts: in one of the last plots of Petrovskiy Island, Setl City is building The One premium class, and in the Centralniy district Noviy Nevskiy is being built in the place of the former transport company (PSK). Residential Market of business- and premium-class | Colliers International | Colliers and premium-class of business- Market Residential Moskovskiy district formed the largest Two years ago in premium class, projects share (39%) among new business class were focused on the Petrogradskaya side projects: two large-scale redevelopment and Staro-Nevskiy Prospekt. Now the projects were launched — Kvartal CHE bulk of the new supply is concentrated (Etalon) and Defans (Leader Group). on Petrovskiy Island (64%). A further 24% is in the growing Admiralteyskiy In the first half of the year, the district, where in 2019 the market was implementation of a large-scale project replenished with new club houses — on the alluvial territories of Vasilievskiy Arthouse (Krasnaya Strela) and Idealist Island began: in June 2019, LSR Group (Evrostroy). launched the Morskaya Naberezhnaya residential complex. CHART 2: Premium Structure of new supply of business and premium 24% 64% 12% projects in 2019 by city district, % of the volume Business in sq m 13% 16% 15% 39% 9% 3% 2% 1% 2% Admiralteiskiy Vasileostrovskiy Moskovskiy Petrogradskiy Vyborgskiy Nevskiy Centralniy Krasnogvardeiskiy Primorskiy Source: Colliers International 5 Residential Market of business- and premium-class | Colliers International | Colliers and premium-class of business- Market Residential 2020 January | St. Petersburg | St. Petersburg Moskovskiy Nevskiy Primorskiy Residential complex Georg Landrin (OOO JK Georg Landrin). Colliers International — co-exclusive broker of the project. 6 TABLE 1: NUMBER OF New business and premium OBJECT DISTRICT DEVELOPER APARTMENTS | St. Petersburg projects that went on sale in 2019 1 Defance Moskovskiy Lider Group 1,890 Moskovskiy Etalon 1,698 January 2020 January 2 Kvartal CHE 3 Svetlana Park Vyborgskiy Setl City 1,090 4 Galaktika Pro Admiralteiskiy Etalon 782 Morskaya 5 Vasileostrovskiy LSR 702 Nabereznaya 6 The One Petrogradskiy Setl City 446 Residential Market of business- and premium-class | Colliers International | Colliers and premium-class of business- Market Residential 7 Promenade Admiralteiskiy Akvilon Invest 363 8 B57 Moskovskiy KVS 150 Admiral 9 Vasileostrovskiy Stroitelniy Trest 120 Ushakov 10 Noviy Nevskiy Centralniy PSK 120 11 Idealist Admiralteiskiy Evrostroy 105 12 Nobelius Vyborgskiy PSK 86 13 Arthouse Admiralteiskiy Krasnaya Strela 72 Baltiyskaya 14 Forsite Centralniy 65 Kommercia Bronka 15 Family Loft Petrogradskiy 57 Development Klassika. Dom 16 Petrogradskiy L1 36 dlya dushi Source: Colliers International Prospekt Prosvescheniya Ozerki 7 Grajdansky Prospekt Residential Market of business- and premium-class | Colliers International | Colliers and premium-class of business- Market Residential 2020 January Udelnaya Akademicheskaya 3 Komendantsky Politekhnicheskaya Prospekt | St. Petersburg | St. Petersburg Pionerskaya Ploschad Mujestva Staraya Derevnya Chyornaya Rechka Lesnya Krestovsky Ostrov Viborgskaya 16 Petrogradskaya 12 15 6 Chkalovskaya Gorkovskaya Ploschad Lenina 9 Sportivnaya Primorskaya Chernishevskaya Vasileostrovskaya 5 14 Admiralteyskaya Gostiny Dvor Ladojskaya Ploshad Vosstaniya Dostovskaya Novocherkasskaya Sadovaya Zvenigorodskaya 10 Pushkinskaya Ligovsky Prospekt Prospekt 13 Bolshevikov Tekhnologichesky Institut Obvodny 11 Kanal Frunzenskaya Baltiyskaya 7 Narvskaya 2 Elizarovskaya Volkovskaya 4 Moskovskiye Vorota Buharestskaya Kirovsky Zavod Elektrosila Lomonosovskaya 8 Mejdunarodnaya Avtovo Park Pobedy Proletarskaya Moskovskaya 1 Leninsky Prospekt Obukhovo Prospekt Veteranov Zvezdnaya Kupchino 8 DEMAND | St. Petersburg According to the Rosreestr Directorate as well as by the technical purchase for St. Petersburg, in 2019, 83,476 share of apartments by developers prior to agreements (DDU) were registered for the entry into force of amendments to January 2020 January residential premises, which is 11% more legislation. As a result, at present, most than in 2018 (75,229). projects on the market are being built according to the old rules: in 2019, the Compared to 2018, when demand was Rosreestr Department for St. Petersburg distributed more evenly, in 2019 the registered a total of 791 DDUs in 2019, maximum number of transactions was which stipulate the obligation of a shared concluded between April and June, when construction participant to deposit funds high demand was stimulated by market into an escrow account (9.5% of the total hype associated with changes in 214-FZ Residential Market of business- and premium-class | Colliers International | Colliers and premium-class of business- Market Residential volume of DDU). that came into force with July 1, 2019. This demand was initiated by investors, * A transaction is considered to be wholesale if five or more DDUs are concluded per person for a period. CHART 3: 30 28.0 Number of registered contracts for participation 25 22.7 21.1 in shared construction for 19.4 thousand DDU thousand 20 residential premises 17.3 17.2 17.2 15.8 15 2018 2019 10 5 0 Q1 Q2 Q3 Q4 Source: Department of Rosreestr in St. Petersburg 9 Residential Market of business- and premium-class | Colliers International | Colliers and premium-class of business- Market Residential 2020 January PRICES | St. Petersburg | St. Petersburg The transition to escrow accounts in the construction readiness of projects. forced many developers to adjust their Due to the combination of these factors, financial models: the cost of buildings the indicator in some projects increased that entered the market after July 1, by 7-15%. 2019 was 7-12% higher than others in At the end of 2019, the weighted average the same complexes. cost per square metre in business class The increase in residential prices during projects increased by 13% compared to the transition to the new scheme is the same period in 2018 and amounted directly related to the need for project to 171,700 RUB/sq m. In premium financing of construction: the interest projects, the increase was 9% and in rate on a loan for some developers can absolute terms reached 221,400 RUB/ reach 15% and this changes when funds sq m. The maximum cost growth for the are transferred to an escrow account. year is shown by the Moskovskiy (+13%) and Admiralteyskiy (+11%) districts. At the same time, the increase in the cost per square metre of residential real estate in 2019 is due to increased demand in the market and an increase CHART 4: 215 Admiralteiskiy Average price by city 174 district 229 Vasileostrovskiy 159 Premium 225 Business Vyborgskiy 160 Krasnogvardeiskiy 165 271 Moskovskiy 176 Nevskiy 142 236 Petrogradskiy 219 Primorskiy 187 Frunzenskiy 130 192 Centralniy 199 0 50 100 150 200 250 300 thousand sq m Source: Colliers International 10 2019 RESULTS | St.
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