REAL ESTATE
MONITOR Spring 2021 CAPITAL · OFFICE · RETAIL · WAREHOUSE · HOSPITALITY · HOUSING
In pursuit of new rental formats during and after the pandemic Contents
Introduction Letter from the Chief Executive Officer 01 Letter from the Chairperson of the AEB Real Estate Committee 02
Moscow market overview Capital market 03 Retail market 06 Office market 10 Warehouse market 13 Hospitality market 18 Housing market 23
St. Petersburg market overview Office market 26 Street retail market 27 Retail market 28 Warehouse market 29
Hot topics The pandemic forced coworking to change work modes 30 State aid for tenants in the era of COVID-19: Russia’s experience 32
Publication name/Наименование издания: Publication volume and number/ Publisher’s address/ Printing House’s address/ Real Estate Monitor Номер выпуска: 01, 2021 Адрес издателя, редакции: Адрес типографии: (“АССОЦИАЦИЯ ЕВРОПЕЙСКОГО БИЗНЕСА: Release date/Дата выхода: 16, bld. 3, Krasnoproletarskaya str., 2 Okskiy s’ezd str., 603022, N. Novgorod, Обозрение рынка недвижимости”) 15 March 2021/15 марта 2021 года 127473, Moscow, Russia/ Russia/Россия, 603022, г. Н. Новгород, Published by/Учредитель: Non-profit Circulation/Тираж: 900 сopies/900 экз. Россия, 127473, г. Москва, ул. Окский съезд, д. 2 making partnership “Association of European Cost/Цена: Distributed free of charge/ ул. Краснопролетарская, Businesses”/Некоммерческое партнерство Бесплатно д. 16, стр. 3 “АССОЦИАЦИЯ ЕВРОПЕЙСКОГО БИЗНЕСА”
The opinions and comments expressed here are those of the authors and do in this publication should not be used as a substitute for consultation with not necessarily reflect those of the Non-profit making partnership “Association professional advisers.]/Информация в данном издании не является of European Businesses”/Мнения/комментарии авторов могут не совпадать исчерпывающей и не является профессиональной консультацией по с мнениями/комментариями учредителя публикации, Некоммерческого соответствующим вопросам. Несмотря на то, что были предприняты все партнерства «Ассоциация европейского бизнеса». меры предосторожности при ее подготовке, АЕБ не несет ответственности The information in this publication is not exhaustive and does not represent за наличие возможных ошибок, допущенных по невнимательности или a professional consultation on related matters. While all reasonable care has другим причинам, а также за любой вред, понесенный любым лицом, been taken to prepare it, the AEB accepts no responsibility for any errors it которое будет руководствоваться данной информацией. [Информация may contain, whether caused by negligence or otherwise, or for any loss, в данном издании не должна использоваться в качестве замены however caused, sustained by any person that relies on it. [The information консультаций с профессиональными консультантами.] Introduction AEB Real Estate Monitor | 1/2021
Dear readers,
Let me kindly present the first in 2021 issue of the “Real Estate Monitor” to you! It summarizes the outcomes of the Moscow and St. Petersburg real estate market trends in 2020.
Investment volumes in Russian real estate in the fourth quarter of the last year reached maximum since 2017 – around USD 1.7 billion. It accounted for 40% of the total capital volumes in 2020. Not surprisingly, residential, industrial and warehouse segments showed a sharp increase in terms of closed deals, whereas investment volume in retail and office Tadzio Schilling sectors plummeted as compared to 2019. Chief Executive Officer, Association of European Only 19 international brands entered the Russian market last year. As expected, this figure Businesses is significantly lower than in the previous years: the inflow of new retailers was 30%, 39% and 60% higher in 2019, 2018 and 2017 respectively.
The following tendencies are forecasted in the current year: growth of new construction due to a growing demand for warehouses; opening of several branded hotels delayed in 2020 because of the pandemic; a gradual restoration of the housing market considering the revival of foreign personnel dynamic movement.
I would like to share gratitude to all members of the Real Estate Committee for their ongoing activities, including those organized as webinars during the last year pandemic. Let me also express sincere appreciation to all contributors of the magazine for their valuable inputs submitted on a permanent basis.
Dear friends, this year will be marked by the AEB 25th anniversary celebrations. Among the most anticipated events will be a flagship conference “Russia and Europe in the world of tomorrow. Looking back to move ahead” to be organized on April 22 in an online format. Let me take this opportunity to invite you all to join us on this outstanding occasion.
We look forward to AEB festive and routine activities scheduled for this special year. We will try to bring expertise to every aspect of our work and respond with excellence to requests from member companies.
I hope you will find this broadly illustrated issue of the “Real Estate Monitor” an interesting read!
AEB Real Estate Monitor | 1/2021 1 AEB Real Estate Monitor | 1/2021 Introduction
Dear readers,
A global pandemic has been mentioned as a potential risk for many years but was never seriously considered in business models. Today, business will be much more sensitive to global threats, which will demand diversification of the asset portfolios, service lines, and geographies. COVID-19 will most likely lead to the start of a new market cycle.
Russia and Slovakia showed the lowest drop in investment in 2020. Hungary, the Czech Republic, and Poland, being the most actively growing countries in recent years, showed a Tatjana Kovalenko noticeable fall in volumes. Investment volumes appeared expectedly low in 2020. Devaluation Chairperson of the AEB of the rouble also had a negative impact. Real Estate Committee, Deputy General Director, As forecasts are being revised, Russia’s economic recovery is delayed. According to the SENDLER & COMPANY optimistic scenario, growth is expected in Q2, and according to the pessimistic scenario, in Q4. Foreign demand will not stimulate the economy in 2021, and domestic demand is limited due to a decrease in real disposable income and destocking.
Residential construction and mortgage loans will remain the main drivers of economic development in 2021. Work-from-home and the new normal will constrain take-up growth.
Development of flexible workspace in residential areas and “life-workings” is an emerging market trend due to the introduction of remote work. For example, the new market player Territoriya has announced the opening of 21 locations in almost every Moscow district in 2021.
Russian regional cities were more affected by the pandemic. 2020 was the first year in market history (since 2005) when Moscow exceeded the regions’ share in the new inventory structure.
Retailers are in search of new opportunities to attract and be closer to customers: they are creating new brands (X5 opened the discounter Chizhik, Dodo Pizza launched the Doner 42 brand), testing new formats (Vkusvill started catering services), and collaborating (the first location of Sber and McDonald’s opened in Vladivostok as a single space for the fast-food chain and a bank branch with a common waiting area and co-working).
AEB and its Real Estate Committee are looking forward to this year’s challenges and opportunities with positivity.
Enjoy the reading!
2 AEB Real Estate Monitor | 1/2021 Moscow market overview | Capital market AEB Real Estate Monitor | 1/2021
Russia real estate investment market | Q1 2019
Russia real estate investment market | Q1 2019 RussiaMoscow real estate investment market market | Q1 2019 overview Russia real estate RRiCapitalnussiussives amarket,atm r realeale nQ4 et e 2020smsttaaatrtekeet • Russian real estate investment volumes increased by • The most serious growth occurred in the industrial and ini1.8%nvv YoYee stos tmUSDtm 4.16e billionenn tin t 2020,m m comparedaarrk ktoe USDet t warehouse segment, where compared to 2019, the invest- 4.09 billion in the previous year. At the same time, as is ment volumes increased by 150% and amounted to USD traditional, the majority of deals were closed in the last 766 million in 2020. In terms of absolute figures, ware- quarter, USD 1.68 billion – the maximum since Q4 2017. houses were among the top three most attractive sectors • The results were significantly higher than expectations at for the first time since 2014. The residential real estate the beginning of the pandemic. The high values in H2 2020 segment remained in first place in 2020 – USD 1.5 billion. were influenced by the low cost of financing, deposit interest • As benchmarks for the market now JLL analysts consider rates decline and high volatility in the stock and bond markets. Moscow prime yields between 10-11.5% for warehouses, We see a high gap between the cost of risk-free investments 8.5-10% for offices and 9-10.5% for shopping centers; St. and the return on the real estate market that stimulated in- Petersburg prime yields are assessed at 10.25-11.75% for vestment in the real estate market. In 2021, we expect an warehouses, 9-11% for offices and 9.5-11.5% for - shop Rincreaseussian in r etheal volumeGDP g rofo wttransactionsh to USD 4.5-5 billion. ping centers. (1–9 ) Russian real GDP growth Russian19% RUSSIA real G REALDP gr oGDPwth GROWTH 2 6% SOVEREIGN BOND YIELDS 6% 9% 9% 6% 3% 6% 4% 6% 6% 0% 3% 4% 3%-3% 4% 2% 0% 0%-6% -3% -3%-9% 2% 2% 0% -6%-6%
-9%-9% 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019F 2020F 2021F Jul–19 Jul–18 Jul–20 Apr–20 Apr–18 Apr–19 Oct–18 Oct–19 Oct–20 Jan–18 Jan–19 0% 0% Jan–19 Jan–21 Russia 23 10 year U.S. Treasury
Source:2007 2008 Rosstat,2009 Oxford2010 2011 Economics2012 2013 2014 2015 2016 2017 2018 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019F 2020F 2021F 2019F 2020F 2021F Jul–19 Jul–20 Jul–18 Jul–19 Jul–18 Jul–20 Apr–20 Apr–18 Apr–19 Oct–20 Oct–18 Oct–19 Apr–20 Apr–18 Apr–19 Oct–18 Oct–19 Oct–20 Jan–18 Jan–19 Jan–21 Jan–19 Jan–18 Jan–19 Jan–19 Jan–21 Source: Rosstat, Oxford Economics Source: Bloomberg RussiRussia 23 a 23 10 ye1ar0 yUe.Sar. TUr.eSa.su Trreyasury ESource:xSource:ch Rosstat,an Rosstat,ge Oxford r atOxford eEconomics d Economicsynamics, USD/RUB Source: Bloomberg Source:Source: Bloomberg Bloomberg ExEchxchanagneg erat rate de ydnyanmamics,ic s,USD USD/R/RUBUB 3 EXCHANGE RATE DYNAMICS, USD/RUB
90
90 80 90
80 70 80
70 7060
60 50 60 Jul–16 Jul–17 Jul–18 Jul–19 Jul–20 Apr–16 Apr–17 Apr–18 Apr–19 Apr–20 Oct–16 Oct–17 Oct–18 Oct–19 Oct–20 50 Jan–16 Jan–17 Jan–18 Jan–19 Jan–20 Jan–21 50
Source: Central Bank of Russia Jul–20 Jul–19 Jul–18 Jul–17 Jul–16 Apr–20 Apr–19 Apr–18 Apr–17 Apr–16 Oct–20 Oct–19 Oct–18 Oct–17 Oct–16 Jan–21 Jan–20 Jan–19 Jan–18 Jan–17 Jan–16 Jul–16 Jul–17 Jul–18 Jul–19 Jul–20 Apr–16 Apr–17 Apr–18 Apr–19 Apr–20 Oct–16 Oct–17 Oct–18 Oct–19 Oct–20 Jan–16 Jan–17 Jan–18 Jan–19 Jan–20 Jan–21
Source: Central Bank of Russia AEB Real Estate Monitor | 1/2021 3
Source: Central Bank of Russia Source: Central Bank of Russia AEB Real Estate Monitor | 1/2021 Moscow market overview | Capital market Investors by source of capital
Russia investment volume dynamics* % 4 RUSSIA INVESTMENT VOLUME DYNAMICS 1 2% 1% 1% 1% 2% 3% USD m % 2% 5% 4 4 159 4 087 13% 13% 1 684 1 486 2019 2020
% % 2019 2020 Q4 2019 Q4 2020 76 90
Source: JLL *Investment deals excluding deals with land plots, joint ventures, sales Russia UAE Czech Republic Austria France of residential real estate to end-users. Azerbaijan Switzerland South Korea Turkey
5 IINVESTORSnvestor BYs b SOURCEy sou OFrc CAPITALe of capital Prime yields, Q1 2019 Russia investment volume dynamics* Investment volume breakd own by secto1r% 2% 1% 1% 1% Moscow 2% 3% USD m % 2% 5% 4 e 34%
2019 Office c
26%
4 159 2020 4 087 13% min max 13% 1 684 Shopping 1 486 2019 28% 2020
2019 centre ail t . e 9 00 50 R 11% min max 2020
76% 90% Warehouse 2019 2020 Q4 2019 Q4 2020 1% 10 00 11 50 2019 min max ed-use 2% 2020 *Investment deals excluding deals with land plots, joint ventures, sales Mi x Russia UAE Czech Republic Austria France of residential real estate to end-users. Azerbaijan Switzerland South Korea Turkey
5% St. Petersburg el Source: 2019 JLL t Prime yields, Q1 2019
Investment volume breakdown by sector H o 6% 2020 Office Moscow min max 25% 2019 e 34%
2019 Office c Shopping 36% 2020 26% esidential
2020 centre R min max 50 50 min max Shopping 28%
2019 centre ail 4 7% AEB Real Estate Monitor | 1/2021 Warehouse t 2019
trial . e 9 00 50 R 11% min max 2020 10 25 11.75
2020 18% min max Indu s Warehouse 1% 10 00 11 50 2019 min max
ed-use Investment volume breakdown by region 2%
2020 Investments by deal size (volume, USD m) Mi x 75% 44.0% 69% St. Petersburg 36.0% 5% % el 28.0 2019 t 23.0% H o 6% 22.0% 2020 Office 21.0%
min max 25% 12.0% 15.0% 25% 16% 2019 Shopping 9% 36% 6% 2020 esidential centre R 50 50 2019 2020min 2019 2020 2019 2020max 2019 2020 2019 2020 2019 2020 2019 2020 < 20 21-50 51-100 101-300 Moscow St. Petersburg Regions 7% Warehouse 2019 trial 10 25 11.75
2020 18% Contacts:min max Indu s Olesya Dzuba Ksenia Zenkina +7 (495) 737 8000 [email protected] [email protected] www.jll.ru Investment volume breakdown by region Investments by deal size (volume, USD m)
75% 44.0% 69% 36.0% 28.0% 22.0% 23.0% 21.0%
25% 15.0% 16% 12.0% 9% 6%
2019 2020 2019 2020 2019 2020 2019 2020 2019 2020 2019 2020 2019 2020 < 20 21-50 51-100 101-300 Moscow St. Petersburg Regions Contacts:
Olesya Dzuba Ksenia Zenkina +7 (495) 737 8000 [email protected] [email protected] www.jll.ru Investors by source of capital Investors by source of capital Russia investment volume dynamics* 1% 2% 1% Russia investment volume dynamics* 1% 1% 1% Inve2s%tors b2y% s1o%urce of capital 3% USD m Investors by source of capit1a%l 4%1% 2% 2% 5% 3% USD m 4% RusRsuias2 si%niav einsvtmesetmnte vnotl uvmolue mdyen daymniacms*ics* 5% 1% 4 087 4 159 2% 1% 1% 13% 2% 1% 1% 1% 1% 1% 4 087 4 159 2% %% 3% % USD m 13% 132 % 3 USD m 2% 1 684 5% 4 4% 2% 1 486 13% 5% 1 684 2019 2020 4 087 4 1594 159 1 486 2019 2020 4 087 13% 13% 13%13% 1 6841 684 1 486 2019 76% 2020 90% Moscow2019 market overview2020 | Capital 1market Q4486 2019 Q4 2020 2019 AEB Real Estate Monitor | 1/2021 2020 % % 2019 2020 Q4 2019 Q4 2020 76 90 *Investment deals excluding deals with land plots, joint ventures, sales Russia UAE Czech Republic Austria France of residential real estate to end-users. *Investment deals excluding deals with land plots, joint ventures, sales Russia AzerbaijanUAE SwitzerlandCzech RepublicSouth KoreaAustria FranceTurkey of residential real estate to end-users. 76% 90% 2019 2020 Q4 2019 Q4 2020 Azerbaijan Switzerland76% South Korea Turkey 90% 2019 2020 Q4 2019 Q4 2020 Prime yields, Q1 2019 *InvestmentI6n v deals eINVESTMENTs excludingtme dealsnt withvo land lVOLUMEu plots,m ejoint b ventures,r BREAKDOWNea saleskd own b yBY s eSECTORctor 7 PRIMERussia YIELDSUAE IN MOSCOWCzech Republic Austria France *Investment deals excluding deals with land plots, joint ventures, sales of residential real estate to end-users. Prime yieldsRussia, Q1 2019UAE Czech Republic Austria France of residential real estate to end-users. Azerbaijan Switzerland South Korea Turkey Investment volume breakdown by sector MoscowAzerbaijan Switzerland South Korea Turkey Moscow
e 34% Prime yields, Q1 2019
2019 Office c Prime yields, Q1 2019 InvIensvtemsetmnte vnotl uvomluem bree bakredaokwdno wbyn s beyc tsoerctor e 34%
2019 Office c 26% 2020 MoscowMoscowmin max 26% 2020 min max Shopping
e 34%
2019 Office c e 28% 34%
2019 Office c 2019 centre ail t . Shopping e 9 00 50 26% 2020 R 28% % min min max max 2019 11% 26
2020 centre ail 2020 min max t . e 9 00 50 R 11% min max 2020 ShoppiShoppngW arehouing se 28%
2019 centre ail 1% 28% t
2019 10 00 11 50
2019 centre ail . Warehouse e t 9 00. min 50max e R 9min 00 max 50 ed-use 11% R min max 12020 % % 10 00 11 50 2% 11 2019 2020 2020 min max Mi x ed-use 2% 2020 Warehouse Mi x Warehouse 1% 10 00 11 50 2019 1% 1minSt.0 Petersburg00 1ma1x 50 % 2019 5 el 2019 min max t ed-use
ed-use 2% St. Petersburg 2020 H o 2% Mi x 5% %
el 6 2019 2020 2020 t Mi x Office
H o 6% 2020 min Office max 5% St. Petersburg
el St. Petersburg 2019 % t 5% 25 2019 el 2019 min max t
H o 6% Shopping H o 2020 6% 25% Office 2019 36% 2020 2020 esidential Officecentre R 50Shopping 50 36%
2020 min max esidential min centre max R 50 min 50 max 25% 2019 25% min max 2019 7% ShoppingW arehouse 2019 % Shopping
trial 36 2020 esidential 36% centre 2020 esidential R centre R 7% 10 25Warehouse 11.7550
2019 50 2020 18% min max trial min 50 max 50 Indu s 10 25 min 11.75max
2020 18% min max Indu s 7% Warehouse
2019 7% Warehouse trial 2019 ISource:ntrial ves JLLtment volume breakdown by region Source:1 0JLL 25 11.75
2020 11.75 18% 1Inmin0vest25ments by deal size (volmuamx e, USD m) Indu s 2020 18% min max
InvestmeIndu s nt volume breakdown by region 75% Investments by deal size (volume, USD m) 44.0% 69% 75% 36.0% 44.0% 28.0% 69% 8 INVESTMENT VOLUME BREAKDOWN BY REGION 9 INVESTMENTS BY DEAL SIZE (VOLUME, USD M) InvIensvtemsetmnte vnotl uvomluem bree bakredaokwdno wbyn r beyg iroengion 36.0% Investments by d22.0ea%l size (volu23.0m%e, USD m) Investments by deal s28.0ize% (volume, USD m)21.0% 75% 23.0% 44.0% 75% 22.0% 44.0% 69% 21.0% 69% 36.0% 25% 15.0% 36.0% 12.0% 28.0% 16% 28.0% 9% 23.0% 25% 12.0% 15.0% 22.0% 23.0% 16% 6% 22.0% 21.0% 9% 21.0% 6% 2019 2020 2019 2020 2019 2020 2019 2020 2019 2020 2019 2020 2019 2020 25% 15.0% 25% 16% 12.0% < 2015.0% 21-50 51-100 101-300 Moscow St. Petersb16ur%g Regions 2019 202012.0% 2019 2020 2019 2020 2019 2020 2019 2020 2019 2020 2019 2020 9% % 6% 9 < 20 21-50 51-100 101-300 Moscow St. Petersburg Regions 6%
Contacts: 2019 2020 2019 2020 2019 2020 2019 2020 2019 2020 2019 2020 2019 2020 2019 2020 2019 2020 2019 2020 2019 2020 2019 2020 2019 2020 2019 2020 < 20 21-50 51-100 101-300 ContacMtossc:ow St. Petersburg Regions < 20 21-50 51-100 101-300 OlesyaM Dzubaoscow St. PetersburKseniag Zenkina Regions +7 (495) 737 8000 [email protected] [email protected] www.jll.ru Olesya Dzuba Ksenia Zenkina +7 (495) 737 8000 olesyaC.dozuba@eCnSource:otancut.jt alJLLl.comsc:ts: [email protected] Source: JLL www.jll.ru
OlesyaOlesya Dzuba Dzuba KseniaKsenia Zenkina Zenkina +7 (495)+ 73 (74 9850)0 7037 8000 [email protected]@eu.jll.comu.jll.com [email protected]@l.ceoum.jll.com www.jll.wruww.jll.ru
AEB Real Estate Monitor | 1/2021 5 Moscow shopping centre market | Q1 2019
MAEB Real oEstates Monitorc |o 1/2021w shoppingMoscow market overview | Retail market cRetailen market,tre Q4 m 2020arket • 11 new schemes with the total GLA of 259,000 sq m en- tractive rental rates that declined during 2020 will stimu- • No new schemes have been delivered in Q1 2019. tered the Moscow market in 2020. Despite the postponement late the opening of new street retail operators. • Thof e20% vac aofn cthey r ainitiallyte in M announcedoscow sh projectsopping ctheen t2020res d compleeclined- to• 4 455.3% operatorsin Q1 201 left9, w thehic mainh is t Moscowhe lowe shight lev streetsel sinc ein t 2020.he mi ddle of 2014. This was a result tionsof lo wlevel co mexceededple on sthe in 20201917 -figure2018, wbyh 58%.en o nInly e2021,ight nsomeew scheAlmostmes half(278,0 of 0the0 s qclosures m) ent eisr edrepresented the mark ebyt; trestaurantshe figure is half the level of new shopping 365,000centre d sqel imve arerie sexpected in 2015 to-20 enter16. the market. Only three fu- and cafes. The lack of understanding how to operate in • Amtureo shoppingng new scentreschem ehaves fo rthe 20 GLA19 a ofre more Salar thanis SE 30,000C (105,0 sq 0m.0 sq them) , lockdownOstrov M econditionschty SC (6 and5,00 0the sq futurem), N ouncertaintyvaya Riga O afut-let Village (38,000 sq m) and •s eThever avacancyl neighb rateour hinoo Moscowd shopp shoppinging centr ecentress of AD amountG Grou-p. Afecteds the rethesu ltdialog, tota l betweennew sup pthely oownersf 2019 wiandll athecco utenants.nt for 315,0 00 sq m. ed to 5.4% in 2020, only 0.2 ppt higher than in H1 2020 The number of openings in 2020 accounted for 294, down • The number of new intern onal retailers declined significantly in Q1 2019, with only four brands entering the Russian market versus ten in Q1 and 1.3 ppt up YoY. In H1 2021 we expect further growth by 25% YoY. 2018. The number of brands that have le the Russian market during the first three months of 2019 equals the number of new ones. of the vacancy rate, but not that significant. The gradual • The inflow of new international retailers expectedly de- • Rdeclineents f oofr athe reta indicatoril galler yis u nprojectedit of 100 tosq startm lo cinat eH2d o2021.n a g rouclinednd flo inor 2020, in sho withppin onlyg ce n19tr eenterings remai ntheed Russianstable in market, Q1 201 9. Prime rent was at UnderRUB195,0 favorable00 pe r conditionssq m per y theear , summeraverage seasonrent at andRUB 74,0 at- 030%0 per lower sq m YoY.per y(e10–18ar. )
10Sh o SHOPPINGpping c CENTREentre SUPPLYsupply** Shopping centre comple ons
5 objects 145k sq m '000 sq m shopping 365 13 objects centres 140 +41% 263k sq m 5.6m sq m 32 objects 287k sq m 259 +58% 37 objects 107 845k sq m 164
37 objects 45 10 1 880k sq m 14 77 16 objects 2 199k sq m 105 65 Superregional, Regional, 35–75k sq m GLA Community, above 75k sq m GLA 15–35k sq m GLA 2019 2020 2021F
Speciality, Neighbourhood, Outlet 7.5–25k sq m GLA 5–15k sq m GLA Q1 Q2 Q3 Q4 Forecast
Source: JLL
Shopping centre density in Russian c es Prime rent: European comparison
sq m/per 1,000 inhabitants USD/sq m/year
Krasnodar 728 London 3 366 Samara 693 Moscow 2 501 Yekaterinburg 540 Paris 2 447 6 AEB Real Estate Monitor | 1/2021 Barnaul 527 Birmingham 2 295 Rostov-on-Don 487 Prague 2 202 Nizhny Novgorod 470 Dublin 2 120 Tyumen 468 Munich 2 055 Orenburg 456 Frankfurt/M 1 761 Moscow 443 Hamburg 1 761 Voronezh 441 Lisbon 1 688 Yaroslavl 434 Luxembourg 1 615 Ryazan 409 Antwerp 1 590 St. Petersburg 397 Brussels 1 590 Ufa 370 Warsaw 1 585 Kazan 365 Helsinki 1 468 Moscow shopping centre market | Q1 2019
Moscow shopping centre market | Q1 2019 Moscow shopping Moscow shopping centre market centre market • No new schemes have been delivered in Q1 2019. • The vacancy rate in Moscow shopping centres declined to 4.3% in Q1 2019, which is the lowest level since the middle of 2014. This was a result • No new schemes have been delivered in Q1 2019. of low comple ons in 2017-2018, when only eight new schemes (278,000 sq m) entered the market; the figure is half the level of new shopping • The vacancy rate in Moscow shopping centres declined to 4.3% in Q1 2019, which is the locweensttr ele dveli vsienrcies t hine 20mi1d5d-l20e o1f 6201. 4. This was a result of low comple ons in 2017-2018, when only eight new schemes (278,000 sq m) entered• tAmhe omnagr kneetw; t hsceh fiegmurees ifso hra 20lf t1h9e alereve Salarl of nies wSE sCh o(105,0pping0 0 sq m), Ostrov Mechty SC (65,000 sq m), Novaya Riga Outlet Village (38,000 sq m) and centre deliveries in 2015-2016. several neighbourhood shopping centres of ADG Group. As the result, total new supply of 2019 will account for 315,000 sq m. • Among new schemes for 2019 are Salaris SEC (105,000 sq m), Ostrov Mechty SC (65,000• s Theq m )n, uNmovabeyra o Rf ingae wO uintlteetr Vnillaogen a(38,0l reta0i0le srqs mde)c alinnde d significantly in Q1 2019, with only four brands entering the Russian market versus ten in Q1 several neighbourhood shopping centres of ADG Group. As the result, total new supply of201 20189. wiThell a nccumoubnet rf oorf 315,0brand0s0 t shqa tm h.ave le the Russian market during the first three months of 2019 equals the number of new ones. • The number of new intern onal retailers declined significantly in Q1 2019, with only fo•u rR bernatnsd fso re nat reertaingil tgahell eRruyss uinanit mofa 1rk0e0t svqe rmsu lso tceante ind Qon1 a ground floor in shopping centres remained stable in Q1 2019. Prime rent was at 2018. The number of brands that have le the Russian market during the first three montRhsU oBf195,0 20190 e0q puealrs s tqh em n puemrb yeera or,f anveewra ognee rse. nt at RUB74,000 per sq m per year. • Rents for a retail gallery unit of 100 sq m located on a ground floor in shopping centres remained stable in Q1 2019. Prime rent was at RUB195,000 per sq m per year, average rent at RUB74,000 per sq m per yeaMoscowr. market overview | Retail market AEB Real Estate Monitor | 1/2021 Shopping centre supply** Shopping centre comple ons Shopping centre supply** Shopping centre comple ons 5 objects 11 SHOPPING145k sq m CENTRE COMPLETIONS '000 sq m 5 objects shopping 365 145k sq m '000 sq m13 objects centres 365 140 +41% shopping 263k sq m 13 objects centres 140 +41% 5.6m sq m 263k sq m 32 objects 5.6m sq m 287k sq m 259 32 objects +58% 287k sq m 259 objects +58% 37 107 845k sq m 164 37 objects 107 845k sq m 164 37 objects 45 10 1 880k sq m 37 objects 45 10 14 1 880k sq m 77 14 16 objects 77 2 199k sq m 16 objects 105 2 199k sq m 105 65 Superregional, Regional, 35–75k sq m GLA Community, above 75k sq m GLA 65 15–35k sq m GLA 2019 2020 2021F Superregional, Regional, 35–75k sq m GLA Community, above 75k sq m GLA 15–35k sq m GLA 2019 2020 2021F Speciality, Neighbourhood, Outlet 7.5–25k sq m GLA 5–15k sq m GLA Q1 Q2 Q3 Q4 Forecast Speciality, Neighbourhood, Outlet 7.5–25k sq m GLA 5–15k sq m GLA Q1 Q2 Q3 Q4 Forecast
Source: JLL
12Sh o SHOPPINGpping c CENTREentre DENSITY densi tINy RUSSIANin Russi CITIESan c es Prime rent: European comparison Shopping centre density in Russian c es Prime rent: European comparison sq m/per 1,000 inhabitants USD/sq m/year sq m/per 1,000 inhabitants USD/sq m/year Krasnodar 728 London 3 366 Krasnodar 728 London 3 366 Samara 693 Moscow 2 501 Samara 693 MoscowYekaterinburg 2 501 540 Paris 2 447 Yekaterinburg 540 Paris 2 447 Barnaul 527 Birmingham 2 295 Barnaul 527 Birmingham 2 295 Rostov-on-Don 487 Prague 2 202 Rostov-on-Don 487 Prague 2 202 Nizhny Novgorod 470 Dublin 2 120 Nizhny Novgorod 470 Dublin 2 120 Tyumen 468 Munich 2 055 Tyumen 468 Munich 2 055 Orenburg 456 Frankfurt/M 1 761 Orenburg 456 Frankfurt/M 1 761 Moscow 443 Hamburg 1 761 Moscow 443 Hamburg 1 761 Voronezh 441 Lisbon 1 688 Voronezh 441 Lisbon 1 688 Yaroslavl 434 Luxembourg 1 615 Yaroslavl 434 Luxembourg 1 615 Ryazan 409 Antwerp 1 590 Ryazan 409 Antwerp 1 590 St. Petersburg 397 Brussels St. Petersburg 397 Brussels 1 590 1 590 Ufa 370 Ufa 370 Warsaw 1 585 Warsaw 1 585 Kazan 365 Kazan 365 Helsinki 1 468 Helsinki 1 468
Source: JLL
AEB Real Estate Monitor | 1/2021 7 Moscow shopping centre market | Q1 2019 Moscow shopping centre market • No new schemes have been delivered in Q1 2019. • The vacancy rate in Moscow shopping centres declined to 4.3% in Q1 2019, which is the lowest level since the middle of 2014. This was a result of low comple ons in 2017-2018, when only eight new schemes (278,000 sq m) entered the market; the figure is half the level of new shopping centre deliveries in 2015-2016. • Among new schemes for 2019 are Salaris SEC (105,000 sq m), Ostrov Mechty SC (65,000 sq m), Novaya Riga Outlet Village (38,000 sq m) and several neighbourhood shopping centres of ADG Group. As the result, total new supply of 2019 will account for 315,000 sq m. • The number of new intern onal retailers declined significantly in Q1 2019, with only four brands entering the Russian market versus ten in Q1 2018. The number of brands that have le the Russian market during the first three months of 2019 equals the number of new ones. • Rents for a retail gallery unit of 100 sq m located on a ground floor in shopping centres remained stable in Q1 2019. Prime rent was at RUB195,000 per sq m per year, average rent at RUB74,000 per sq m per year.
Shopping centre supply** Shopping centre comple ons
5 objects 145k sq m '000 sq m shopping 365 13 objects centres 140 +41% 263k sq m 5.6m sq m 32 objects 287k sq m 259 +58% 37 objects 107 845k sq m 164
37 objects 45 10 1 880k sq m 14 77 16 objects 2 199k sq m 105 65 Superregional, Regional, 35–75k sq m GLA Community, above 75k sq m GLA 15–35k sq m GLA 2019 2020 2021F
Speciality, Neighbourhood, Outlet 7.5–25k sq m GLA 5–15k sq m GLA Q1 Q2 Q3 Q4 Forecast
AEB Real Estate Monitor | 1/2021 Moscow market overview | Retail market
Shopping centre density in Russian c es 13P ri mPRIMEe r eRENT:nt: EEUROPEANuropea COMPARISONn comparison Moscow shopping centre market | Q1 2019 sq m/per 1,000 inhabitants USD/sq m/year
Krasnodar 728 London New retailers on the Russian market: 3 366 entries and exits Availability Samara 693 Moscow 2 501 Yekaterinburg 540 Paris 2 447 Moscow shopping centre market | Q1 2019 Overall SC vacancy rate 61 Barnaul 527 Birmingham 2 295 MoscowNumber of shopping centre market | Q1 2019 interna al 57 1 Rostov-on-Don 487 3 Prague 2 202New retailers on the Rusbsrainadsn market: 3 which Nizhny Novgorod 470 5 Dublin 2 120entries and exits Nenteerewd th eretailers o3 n the Russian market: Availability 20 bps % market 4 5.2% 5.4 . Tyumen 468 Munich 2 055 47 48 Availability entries and exits Q3 2020 Q4 2020 Orenburg 456 Frankfurt/M 14 3 5 Overall SC vacancy rate 1 761 61 Number of 40 3 Moscow 57 1 OverallPrime SC SC vacancy vacancy rate* rate 443 Hamburg 1 761 interna al 1 5 Number of 16 61 1 brands 3 1 1 Voronezh 441 3 interna al 57 1 Lisbon 1 688 which 2 3 5 3 8 entered the 3 brands 3 2 Yaroslavl 434 Luxembourg which 3 2 20 bps 1 615 market 4 5 31 % % entered the 47 48 13 5 4 5.2 5.4 0 bps bps. Ryazan 409 Antwerp mark28et 2 Q32 2020 Q4 2020% 20 %% 1 590 4 3 1 1.6 5.41.6 . 8 5.2 14 3 5 47 485 1 St. Petersburg 397 3 Q3 2020 Q4Q4 20202020 Brussels 1 590 3 3 40 5 14 13 53 Prime SC vacancy rate* 16 118 5 3 27 Ufa 370 Warsaw 1 585 1 1 40 3 1 3 1 1 Prime SC vacancy rate* 5 4 . 3 2 1 3 16 1 1 1 Kazan 365 8 1 2 3 19 MoscowHelsinki shopping centre market | Q1 20191 468 2 4 32 1 3 2 28 2 31 3 3 4 4 1 1 262 8 5 4 3 bps Source: JLL 28 2 2 2 22 221 % 2 0 % 3 17 1 1.631 4 2 Pricing* 1 5 4 1.6 8 3 5 1 15 1 0 bps New retailers on the Russian market: 28 2 Q32 2020 2 Q4 2020% % 3 3 1 1.6 1 1.6 8 5 3 1 9 3 5 1 entries and exits Availability 3 13 18 27 3 8 Prime rent,Q3 2020 RUB/sq m/year Q4 2020 14 NEW RETAILERS ON THE RUSSIAN MARKET: ENTRIES3 AND EXITS 5 1 3 1 4 1 3 . 1 18 1 1 1 1 1 2 271 1 32 Numb3er of 2 3 2 19 2 1 1 1 4 Overall SC vacancy1 rate 4 4 1 1 . 28 interna al 1 1 4 1 4 81 1 Number of 61 4 6 2 3 19 57 1 b26rands 4 32 1 interna al 1 2 22 21 28 7 6 2 1 which l e 4 1 Pricing* 4 4 % brands 3 17 1 26 2 , 0 , 3 th e market 15 1 22 2 185 000 185 000 2 2 21 which 4 5 17 1 2 PricinQ3g 2020* Q4 2020 entered the 3 9 15 1 2011 2012 201203 2 bps014 132015 2016 2017Prime rent,2018 RUB/sq2019 m/year20202 market % 8 % 4 48 5.2 9 5.4 . 1 47 13 1 1Q3 20201 1 2 1 Q41 2020 8 AveragePrime rent, rent, RUB/sq RUB/sq m/year m/year Number of 2 2 1 1 1 14 3 5 4 Jewelry1 & Watches interna al 1 Fashion,1 Footwear,1 Accessories4 8 1 1 1 1 2 1 1 3 Number of 6 4 2 2 1 1 1 40 brands 1 1 Primein6terna SCa lvacancy rate* 1 1 1 4 16 1 5 which l e 7 Restaurants & Cafes1 Household & Furnishings 8 1 1 1 6 0% 1 th e market brands 1851 ,000 185,000 7 6 1 3 2 3 whichCosmetics l e & Perfume Goods for Children1 % 8 Q3 2020 , Q4 2020 00% , 2 th e market 178450,000 178450,00000 3 2 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 31 Q3 2020 Q4Q4 2020 2020 1 5 4 Electronics bps Other Q3 2020 28 2 2 2011 2%012 20130 2014 2015 2016 %2017Average 2018rent, RUB/sq2019 m/year2020 3 1 1.6 1.6 **Rents are given for a single unit of 100 sq m GLA located on a ground floor of a retail 8 3 5 1 JewelryInternational & Watches retailer N Total Fashion, Footwear, Accessories Q3 2020 Q4 2020 Averagegallery. rent,Rents RUB/sqexclude VATm/year and OPEX. Higher level rents that exceed the market level 3 activity trend 5 1 3 Jewelry & Watches are registered occasionally. 18 Restaurants3 27 & Cafes HouseholdFashion, Footwear, & Furnishings Accessories 3 201 1 4 1 . Household & Furnishings 1 Cosmetics 1& Perfume GoodsRestaurants for Children & Cafes 0% 2 3 19 , , 32 74 000 74 000 4 28 % 4 4 OtherCosmetics & Perfume Goods for Children Q3 2020 Shopping ,ceQ4n 2020tre density0 in Moscow, 1 26 74 000 74 000 Electronics 2 22 21 2 Vacancy rate in Moscow districts 17 4 2 PricElectronicsing* Other **Rents are given for a single unit of 100dis sqt rmi cGLAts located (sqQ3 mon 2020 a p grounder 1 floor,00 of0 a iretailnh abitants) Q4 2020 International1 retailer N Total 15 2 gallery. Rents exclude VAT and OPEX. Higher level rents that exceed the market level activity trend 1 **Rents are given for a single unit of 100 sq m GLA located on a ground floor of a retail 9 International retailer N Total are registered occasionally. 13 gallery. Rents exclude VAT and OPEX. Higher level rents that exceed the market level 8 Prime rent,activity RUB/sq trend m/year 201 are registered occasionally. 1 1 1 1 2 1 1 Number of 2 2 1 1 1 4 1 201 interna al 1 1 4 8 1 5.2% Shopping centre density in Moscow 6 686 brands 1 North- sq m which le 7 6 Vac1ancy rate in Moscow districts Shopping centre density in Moscow 1 0Northern% Eastern districts (sq m per 1,000 inhabitants) North- th e market 185,000 185,0007.3% V5.4aca%ncy rate in Moscow districts Northern Eastern 340 Q3 2020 Q4 2020 d540istricts (sq m per 1,000 inhabitants) sq m 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 sq m North- Eastern 5.6% Average4.3 rent,% RUB/sq m/year Western North- Eastern 152 Source: JLL 572 Western sq m Fashion, Footwear, Accessories Jewelry & Watches 5.2% Central 686 sq m North- 5.7% Household & Furnishings 5.2% sq m Central 448 Restaurants & Cafes Northern Eastern6.3 686 7.3% North- North-sq472 m sq m 5.4% Western% Northern Easternsq m 340 Cosmetics & Perfume Goods for Children 74,000 0Northern7Eastern4,0South-54000 % sq m North- 8 AEB4.5 Real% Estate Monitor | 1/2021 sq m 7.3 Western Eastern North- 5.4 Eastern Eastern 5.6% Northern South- 340 Electronics Other Q3 2020 Q4 2020 403540 562sq m Western 5.6% sq m Eastern % North- Eastern North- Eastern 152 sq m 4.3 **Rents are given for a single unit of 100 Southsq m GLA- located on a ground floor of a retail sq m International retailer N Total % Western 572 5.6% Western gallery.Central3.0 Rents% exclude VAT and OPEX. Higher level rents that exceedsq m the market level North- Eastern 152 activity trend 4.3 Western Southern 572477 South- sq m are registered occasionally. 5.7% sq m Western 6.3% Central Centralsq m 448Western Southern 201Troitsky and 472 5.7% sq m Western 6.3% sq m Central 448 South- Novomoskovsky 472 Troitsky and sq m 4.5% Western Western sq m Novomoskovsky Shopping centEasternre dens5.6ity i%n Moscow South-403 South- % sq m Western562 Vacancy rate in Moscow districts 4.5 Eastern 5.6% Eastern sq m South- disSouthtric- ts (sq m per 1,000 inhabitants) 403 562 3.0% sq m Eastern sq m Western 477 South- Southern South- sq m 3.0% Western Western Southern477 South- Troitsky and Southern sq m Novomoskovsky Western Southern Troitsky and Troitsky and % Novomoskovsky 5.2 686 Novomoskovsky Troitsky and North- sq m Novomoskovsky Northern Eastern 7.3% Contacts: North- 5.4% Northern Eastern 340 540 sq m sq m Olesya Dzuba Oksana Kopylova Polina Britskaya North- Eastern 5.6% +7 (495) 737 8000 4.3% Western [email protected] [email protected] [email protected] www.jll.ru 572 Western sq m sq m Central % 6.3% 5.7 Central 448 Contacts: 472 sq m Western sq m South- 4.5% ContacWesternts: Eastern 5.6Olesy%a Dzuba 403O ksana Kopylova PoliSouth-na Britskaya 562 +7 (495) 737 8000 [email protected] sq m oksanOal.eksoypay [email protected] polOkiEasternnsa.nbar [email protected]. cmom Polina Britskawywa w.jll.ru +7 (495) 737 8000 3.0% South- [email protected] [email protected] [email protected] www.jll.ru Western 477 South- Southern sq m Western Southern Troitsky and Novomoskovsky Troitsky and Novomoskovsky
Contacts:
Olesya Dzuba Oksana Kopylova Polina Britskaya +7 (495) 737 8000 [email protected] [email protected] [email protected] www.jll.ru Moscow shopping centre market | Q1 2019 Moscow shoppingMoscow centre shopping market | centreQ1 2019 market | Q1 2019 New retailNeersw o rne tahiele Rrsu ossni atnhe m Raurskseiat:n market: Nenetwri erest ainledr se oxnit sthe Russian market: Availability entries ande enxtritises and exits Availability Availability Overall SC vacancy rate Number of 61 Overall SC vacancy rateOverall SC vacancy rate 61 61 Ninutmerbnear of al Number57 of 1 57 1 57 1 ibnrtaenrndas al interna al 3 3 3 3 bwrhanicdhs brands3 3 whi ch which 5 en tered the 3 5 5 entered the entere3d the 3 20 bps market bps % market 4 %20 20 bps% 4 % 5.4 %. market 5.2 4 47 48 48 5.2 % 5.4 5.4. . 47 5.2 47 48 Q3 2020 Q4 2020 Q3 2020 Q3 2020 Q4 2020 Q4 2020 14 14 3 3 5 14 5 3 5 40 3 40 3 40 3 Prime SCPrime vacancy SC vacancyrate* rate* 1616 1 1 5 5 Prime SC vacancy rate* 161 1 1 1 1 5 1 1 1 1 2 2 1 3 3 32 3 2 2 83 8 3 3 3 22 2 8 3 31 31 2 1 1 5 4 31 1 5 4 0 bps 5 2 4 bps 28 2 2 2 % 0 0 bps% % 28 32 1 2 1.6 % 1.6 28 3 8 5 1 1.6 % 1.6 % 3 8 3 1 1 1.6 5 1.6 3 8 1 5 Moscow3 market overview | Retail market 3 1 Q3 2020Q3 2020 AEB Real EstateQ4 Monitor 2020 Q4| 1/2021 2020 5 1 3 3 Q3 2020 Q4 2020 1 3 3 Moscow shopping centre market | Q1 2019 5 18 5 3 1 273 3 3 3 181 18 1 27 27 3 4 . 11 3 4 1 1 1 1 2 3 1 19 4 . . 4 1 321 1 28 32 2 3 19 3 New retailers on the Russian market: 4 32 4 4 2 19 1 28 4 26 28 4 4 4 21 26 22 21 2 4 Availabilit1 y 26 4 Pricing* entries and exits 17 2 15 AVAILABILITY 22 21 22 2 2 16 PRICING**2 2 15 1 21 4 Pricing* 17 17 2 2 4 2 Pricing* 15 1 9 1 15 2 1 2 13 1 9 Overall SC vacancy9 rate 8 Prime rent,1 RUB/sq m/year Number of 61 13 13 Prime rent, RUB/sqPrime m/yearrent, RUB/sq m/year 1 1 1 1 1 1 8 8 interna al 57 1 2 Number of 4 2 2 1 1 1 3 1 1 1 1 1 1 1 1 brands 3 interna al 1 1 1 41 2 8 1 1 2 1 1 Number of Number of 4 2 4 2 62 1 2 1 1 1 1 1 which 5 brands 1 1 1 interna al interna al 6 1 1 1 1 4 4 entered the 3 which l e 7 6 1 8 1 8 1 brands brands bps 1 6 0% market 20 1 % 1 , , 4 th e market % 6 6 185 000 185 000 5.2 7 7 5.41 .1 47 48 which l e which l e 1 1 Q3 2020 0% Q4 20200% th e market th e Q3mar k2020et Q4 2020 1851,08050,0001851,08050,000 14 3 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 5 Q3 2020 Q3 2020 Q4 2020 Q4 2020 40 3 2011 2012Prime2012 1SC013 vacancy2012201 4rate*20123015 20142016 20 152017 20162018 20172019 20182020 2019Average rent,2020 RUB/sq m/year 16 1 1 5 1 1 Fashion, Footwear, Accessories Jewelry & Watches Average rent, AverageRUB/sq m/yearrent, RUB/sq m/year 2 3 3 2 8 Jewelry & WatchesJewelry & Watches 3 2 RestaurantsFashion, Footwear, & CafesFashion, Accessories Footwear, AccessoriesHousehold & Furnishings 31 1 5 4 Cosmetics & PerfumeRestaurants & Cafes Goodsbps for Children Household & Furnishings % 28 2 2 Restaurants & Cafes % 0Household & Furnishings % 74,000 0 74,000 3 1 1.6 1.6 8 5 1 3 Cosmetics & PerfumeQ3Cosmetics 2020 & PerfumeOther GoodsQ4 2020 for Children Q3 2020 % Q4 20200% 3 Electronics Goods for Children , 74,0000 , 74,000 1 74 000 74 000 5 3 3 18 27 International retailer N Total Other **Rents are given for a single unit of 100Q3 sq2020 m GLA located on a ground floor of a retail Q4 2020 3 Electronics Electronics Other Q3 2020 Q4 2020 1 4 1 . gallery. Rents exclude VAT and OPEX. Higher level rents that exceed the market level 1 1 activity trend 2 3 19 are registered occasionally.**Rents are given for a single unit of 100 sq m GLA located on a ground floor of a retail 4 32 International retailer Total N Total **Rents are given for a single unit of 100 sq m GLA located on a ground floor of a retail 28 International retailer N 4 4 gallery. Rents20 1excludegallery. VAT Rents and exclude OPEX. HigherVAT and level OPEX. rents Higher that level exceed rents the that market exceed level the market level 1 26 activity trend activity trend 2 22 21 2 are registered occasionally.are registered occasionally. 4 PSource:ricin JLLg* Source: JLL 17 2 201 15 1 2 Shopping centre den2s0it1y in Moscow 9 Va1 cancy rate in Moscow districts 13 Prime rent, RUB/sq m/year districts (sq m per 1,000 inhabitants) 8 ShoppingS hceonptprien gd ecennsittrye idne Mnsoitsyc oinw Moscow 1 1 1 1 2 1 1 Vacancy rate in Moscow districts Number of 2 2 1 1 Va1 cancy ra17te i nVACANCY Mosco wRATE dis INtri cMOSCOWts DISTRICTS 18 SHOPPING CENTRE(sq m DENSITY per 1,0 0IN0 iMOSCOWnhabitants) 4 1 districts interna al 1 1 4 districts (sq m per 1,000 inhabitants) 6 8 1 brands 1 DISTRICTS (SQ M PER 1,000 INHABITANTS) 6 1 which l e 7 1 % 0% th e market 5.2 185,000 185,000 686 Q3 2020 North- Q4 2020 sq m 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 5.2% Northern Eastern 7.3% North- 5.45.2%% 686Northern Eastern 340 Average rent, RUB/sq m/year North- 540686 sq m sq m North- sq m sq m Fashion, Footwear, Accessories Jewelry & Watches North- NorthernEastern Eastern North- Northern Eastern 5.6% 7.3% North- 5.4%Western 7.3% North- EasternNorthern Eastern152 340 4.35.4%% 540 Northern Eastern 340 sq m Restaurants & Cafes Household & Furnishings 572540 Westernsq m sq m sq m CentralNorth- Eastern sq m sq m Cosmetics & Perfume Goods for Children North- 0% Eastern % 5.6% % 74,%000 Western 745.7,05.60% 0 Central North- 448 Eastern 152 6.3 4.3 Western North- Easternsq m 152 sq m 4.3% Q4 2020 472 572 Western Electronics Other Q3Western 2020 Central sq m 572 sq m Western sq m Central South- 5.7% sq m International retailer N Total 4.5% **Rents are %given for a single unit of 100 sqEastern m GLA located on a ground floor of a retail Western Central 448 6.3 5.65.7% % 403 CentralSouth- sq m activity trend 6.3% gallery. Rents exclude VAT and OPEX. Higher level rents that exceed the market level sq m 472 Eastern 562 448 are registered occasionally. Western 472 sq m sq m sq m South- South- sq m 3.0% % Western201 Western 4.5 Western South- Eastern 5.6%477 South- South- 4.5% Southern Eastern % sq m 403 Western 562 5.6 403 sq m Western Southern South- Eastern562 sq m ShoppinTroitskyg ce nandtre density inSouth Mo- scow sq m Eastern sq m 3.0Novomoskovsky% Vacancy rate in Moscow districts South- Western Troitsky477 and South- 3.0%districts (sq m per 1,000 inhabitantSoutherns) Novomoskovskysq m Western 477 South- Western Southern sq m Southern Troitsky and Western Southern Troitsky and Novomoskovsky Troitsky and Novomoskovsky Troitsky and Novomoskovsky Novomoskovsky 5.2% 686 North- sq m Northern Eastern 7.3% North- 5.4% Northern Eastern 340 540 sq m sq m North- Eastern 5.6% Contacts: 4.3% Western North- Eastern 152 Olesya D572zuba Source: JLL WesternOksana Kopylova sqPo mlina Britskaya Source: JLL +7 (495) 737 8000 Central sq m % [email protected] [email protected] [email protected] www.jll.ru 6.3% 5.7 Contacts: Central 448 472 sq m Western Consqt amcts: South- Olesya Dzuba Oksana Kopylova Polina Britskaya +7 (495) 737 8000 4.5% Western Eastern 5.6% Olesya 403Dzuba [email protected] [email protected] Britskaypola [email protected] +7 (495) 737 8000 www.jll.ru sq m 562 [email protected] [email protected] sq m [email protected] www.jll.ru 3.0% South- Western 477 South- Southern sq m Western Southern Troitsky and Novomoskovsky Troitsky and Novomoskovsky
Contacts: AEB Real Estate Monitor | 1/2021 9
Olesya Dzuba Oksana Kopylova Polina Britskaya +7 (495) 737 8000 [email protected] [email protected] [email protected] www.jll.ru Moscow office marketMoscow | Q1 2019 office market | Q1 2019 AEB Real Estate Monitor | 1/2021 Moscow market overview | Office market MoscMowoscow Office market, Q4 2020 Moscow office market | Q1 2019 MoscowMoscow office office market market | Q1 | 2019Q1 2019 officeo• Inmffi 2020,a somecre projectsk me ont athe Moscowrke officet real estate In Class B+, the vacancy rate at the end of the year market were postponed: if before the crisis 513,000 sq m stopped at 9%, changes in the indicator in this class • In 2019, the volumeM• Inwere of 2019, oo fficesexpecteds the cannounced volumeo tow be of commissioned,foorffices compl announcede the for2020 ccoomplw result amoue nwasts t o aboutwerecow 400,000amou restrainednts sq to m, about by mo ther e400,000 than reconception th sqr m, mo r ofe than some thanth r office last than last year, when the indiMcyMmoreaeatorro, whenw thanoass a sctthe50% a c o indi 10 lower.ow-cyaeartwor The rwecaso new radt lao wsupply 10(125,000-year was re sq224,000co rm).d lo Twh sqe(125,000re m, we re space 27,500sq m). to Tsqh e apartmentsmre deli wervee r27,500ed inand Q1 sq the2019, m deli revision 26%vered YoY inof decline.Q1 the 2019, class 26% of YoY decline. decreased by 42% YoY. objects. In Class B-, the vacancy rate was the highest • The volume of Q1• 2019 The v tolumeake-up of declined Q1 2019 by t a8.6%ke-up YoY declined and amou by 8.6%nted YtooY 285,000 and amou sq nmted due to t285,000o the shor sqt amge due of atvoailable the shor spatacgee in of the available marke tspace in the market • Given the sharp and significant decline in demand, devel- since 2007, at 16.7%. o• Theffi bulkc ofe take-up m wasa in rClassk Be + twith 59% overall take-up amount. Non-central offices beyond the TTR were in the high demand with 41% in • The bulk of take-upoo operswffiasffi in were cClassce in Be no +m hurrywithm a59% toa bringr ovkrer allknewe tea tkfacilitiese-upt amou to thent. Non-cemarketn tral• oTheffices total bey ond take-up the T inTR 2020 were declinedin the high by demand 2 times with YoY 41% to in take-up structure. take-up structure. • In 2019,this yearthe volume and postponedof offices announced the completion for comple date. Moreco wthan amou nts768,000 to about 400,000sq m. This sq m, is mo there thanlowest thr value since 2007. than laClassst A •• Banking In 2019, theand volume finance of ocfficesompanies announced were for the compl leadee rs in demandcow amou structunts tore, about 33% 400,000 of take-up. sq m, Themore se thancond thr place was tak enthan b yla manust facturing companies, • Banking and finance• yInea 2019,55%r, cwhenompanies the of the vtheolume indi new wca eoftror e 2020o fficeswtheas aleadeoffer tannounced a 10 riss- yClassinear demand f orre cA.coomplr d65% lo eswtructu (125,000of projectsre, sq33%co wm). that amou of Th t earnketse-up. wand teor eabout B+27,500The accounted400,000 se sqcond m deli sq pla m,v forecr emoed w40% inrase Q1than t a and2019,k enth r 43%b 26%y manu YofoY thedecline.facturing total than demand lacompaniesst , 26%. yea26%.ry,ea whenr, when the theindi indicatorca tworas w aast a a t 10a - y10ear-y earrec orerdc olordw l o(125,000w (125,000 sq m). sq m).The Treh ewre rwe e27,500re 27,500 sq m sq deli m deliveredve rined Q1 in Q12019, 2019, 26% 26% YoY Ydecline.oY decline. • Thecompleted volume of Q1 in 2019 2020 ta klocatede-up declined outside by 8.6% the Y oYTTR. and Theamou trendnted t oof 285,000 in 2020.sq m due 46% to the of shorall dealstage of inav ailable2020 spawerece inclosed the mar outsideket the • The• The volume volume of Q1 of Q12019 2019 tak e-uptake-up declined declined by 8.6%by 8.6% YoY YandoY and amou amountedn ttedo 285,000 to 285,000 sq m sq due m due to the to theshor shortageta ofge a ofvailable available spa cspae ince the in themar market ket • Low comple • The• Ldecentralization obulkwst ablec ofompl ta kdemande-upe was will sin Class continuestablea Bt ed + demand withv ainc ancy 2021.59% sorvaeterall decline atatedke-up va inamoucancy all on t.fficera Non-cete declinesegmeThirdntraln oints. Transportffices all Av oebfficeerayondg e Ring. segmeindi the cT aTR Thetnor ts.w e r eachedrA leadingev ine rtheage high10 sectorsindi-y demandearcat or re in cr eachedowith 2020rd l41%ow were 10 –in 10.0% -y ear r ecord low – 10.0% • The•(-0.3 The bulk bulk pofp t aof ink e-upt aQ1ke-up w2019),as w inas Class in as Class theB + Bindi with + withc a59%tor 59% owve orrallvee rdtallaokwn e-uptake-up in amou all amou submarnt. Non-cent. Non-cekentstr alandn toralffices colassesffices bey bond eofyond the the TcitTR yT w.TR Thee rwe ein rve athe incancy thehigh high rdemandat edemand declined with with 41% in 41% inClass in A by 0.5 ppt, to (-0.3 ppt in Q1 2019),take-up• The as s tructuthe reduction indire. cator inw ethere d oofficewn in alldemand submar kdirectlyets and affectedclasses of theBanking city. The & Finance vacancy and rat eBusiness declined services. in Class A by 0.5 ppt, to take-uptake-up structu structure. re. 10.5%; in Class •B+ Banking b10.5%;y 0.2 and p pin t,finance Class to 10.6%, B+companies by in 0.2 Class wppert, eB- ttheo b 10.6%,y leade 0.4 rps pint, demand Classto 8.4% B- s tructuby 0.4re, p 33%pt, t ofo 8.4%take-up. The second place was taken by manufacturing companies, • theBanking dynamics and finance of companies the vacancy were the rate. leade Atrs in the demand end s oftructu there, 33%• Askingof take-up. prime The se rentalcond pla c ratese was t inak en Q4 by manu 2020f acturing were c atompanies RUB , • 26%.Banking• Prime and office finance ren ctsompanies were USD600-750 were the leade sqrs inm. demand Class A s tructuofficere, re 33%nts ofran tagkede-up. fr omThe RUB24,000second place wtoas RUB42,000 taken by manu sqf acturingm/year ,c ompanieswhile Class, B+ rents ranged from • Prime office rents26%. wyear,26%.ere USD600-750 the total vacancy sq m. Class rate A on office the r eMoscownts rang edoffice from RUB24,000mar- 35,000-55,000/sq to RUB42,000 m/year, sq m/yea Classr, while A rental Class rates B+ re werents ran atg RUBed fr om • Low comple stable demand s ated vacancy rate decline in all office segments. Average indicator reached 10-year record low – 10.0% RUB12,000 to RUB25,000•RUB12,000 Low compl sq m/e toy eaRUB25,000r. stable demand sq m/y sear. ated vacancy rate decline in all office segments. Average indicator reached 10-year record low – 10.0% • (-0.3Lowket cpomplp tincreased ine Q1 2019), by sastable the2.3 demandindi pptca ttoor s w11.9%,ere adtoedwn whilev ainc ancyall submarin ra tClasse declinekets A and thein calllasses office20,000-40,000/sq of segme the citnyts.. The Av evraacgancy e m/year,indi ractaetor declined r Classeached in B+10 Class- year rents A rbeyc 0.5o wererd plopwt, –t ato 10.0% RUB (-0.3 ppt in Q1 2019), as the indicator were down in all submarkets and classes of the city. The vacancy rate declined in Class A by 0.5 ppt, to (-0.310.5%;indicator pp int in Class Q1 2019),increasedB+ by 0.2 as thepp t, overindi to c10.6%,a ttheor w ineyearr eClass do wnby B- in4.5by all 0.4 submarppt pp t,to tok e 12.6%.8.4%ts and classes 10,000-25,000/sq of the city. The vacancy m/year. rate declined (19–27 in Class) A by 0.5 ppt, to 10.5%;10.5%; in Class in Class B+ bB+y 0.2by 0.2ppt, p tpot, 10.6%, to 10.6%, in Class in Class B- b B-y 0.4by 0.4ppt, p tpot, 8.4% to 8.4% • Prime office rents were USD600-750 sq m. Class A office rents ranged from RUB24,000 to RUB42,000 sq m/year, while Class B+ rents ranged from • Prime office rents were USD600-750 sq m. Class A office rents ranged from RUB24,000 to RUB42,000 sq m/year, while Class B+ rents ranged from • RUB12,000Prime office t ore RUB25,000nts were USD600-750 sq m/year. sq m. Class A office rents ranged from RUB24,000 to RUB42,000 sq m/year, while Class B+ rents ranged from RUB12,000 to RUB25,000 sq m/year. RUB12,00019 VOLUME to RUB25,000 OF sq NEW m/yea SUPPLYr. 20 VOLUME OF TRANSACTED SPACE
'000 sq m '000 sq m '000 sq m '000 sq m 560 560
1559'000 sq m 1559 '000 sq m '000 sq m '000388 sq m -42% % +150% '000 sq m -51% 388 -42%'000 sq m +150 560560 -51% 560 % 1 000 +30% 1 000 15591559 +30 388 -42% +150% 1559 -51% -42% +150% -51% 388388 -42% +150% -51% +30% 1 000 224 224224 224 768 768768 % 768 +30+30% 1 0001 000 224224 224224 768768 768768
2019 2020 2019 20202020 2021F 2020 2021F 2019 2020 2019 20202020 2021F 2020 2021F 2019 2020 2020 2021F 2019 2020 2020 2021F 2020 2021F 2019 2020 2020 2021F 2019 2020 2020 2021F 2019Fact 2020Forecast Fact 2020 Fore2021Fcast 2019 2020Fact ForecastFact Forecast Fact Forecast Fact Forecast Fact Forecast Fact Forecast Source: JLL Fact Forecast Source: JLL Fact Forecast
VacancyVacancy rates rates by class by class Vacancy ratesVacancyVacancy21 by VACANCYclass rates rates by RATESby class class BY CLASS
8.1% 10.0% 10.1% 9.6% 8.1% 8.18.18.1% %% 10.0% 10.010.0%10.0% % 10.1%10.110.1% % 10.1% 9.69.6%9.6% % 9.6% 12.6% 9.0% 16.7% 11.9% 12.6% 9.0% 16.7% 11.9% Q4 2019 12.6% 12.612.6% % 9.0% 9.0% 9.0% 16.7%16.7% 16.7% 11.911.9%% 11.9% Q4 2019 Q4 2Q0149 2019 Q4 2019
Class A Class B+ Class B- Overall Class A Class B+ Class B- Overall Class A Class B+ Class B- Overall Class A Class A Class B+ Class B+ Class B- Class B- Overall Overall Q4 2020 Q4 2Q042 20020 Q4 2020 Q4 2020
Source: JLL 18.9818.98 18.98m sq m 10 AEB Real Estate Monitorm sqm| 1/2021 sqm m 18.98 ClasCsl aАss А ClasCsl aВs+s В+ ClasCsl aВ18.98s-s В- Class А Class В+ Class В- m sq m m sq m 4.6 +6.7%* 9 .4 - 3.4%* 4.9 0.0%* 4.6 +6.7%* 9 .4 - %3.4%* 4.9 %0.0%* Class А 4.6Clas+s6.7 А %* Class В+9.4 Class В+ - 3.4 * 4.9Class В-0.0 * Class В- 0 2 4 6 8 10 12 14 16 18 0 2 4 6 8 10 12 14 16 18 0 +6.7 %* 2 4.6 +6.74 %* 6 8 10 9 .4 - 3.4%12* 14- 3.4%* 16 0.018 %*4.9 0.0%* 4.6*Growth QoQ 9.4 4.9 *Growth QoQ *Growth QoQ
0 2 0 4 2 6 4 8 6 10 8 12 10 14 12 16 14 18 16 18
*Growth QoQ *Growth QoQ Moscow office market | Q1 2019 Moscow office market
• In 2019, the volume of offices announced for comple cow amounts to about 400,000 sq m, more than thr than last year, when the indicator was at a 10-year record low (125,000 sq m). There were 27,500 sq m delivered in Q1 2019, 26% YoY decline. • The volume of Q1 2019 take-up declined by 8.6% YoY and amounted to 285,000 sq m due to the shortage of available space in the market • The bulk of take-up was in Class B + with 59% overall take-up amount. Non-central offices beyond the TTR were in the high demand with 41% in take-up structure. • Banking and finance companies were the leaders in demand structure, 33% of take-up. The second place was taken by manufacturing companies, 26%. • Low comple stable demand s ated vacancy rate decline in all office segments. Average indicator reached 10-year record low – 10.0% (-0.3 ppt in Q1 2019), as the indicator were down in all submarkets and classes of the city. The vacancy rate declined in Class A by 0.5 ppt, to 10.5%; in Class B+ by 0.2 ppt, to 10.6%, in Class B- by 0.4 ppt, to 8.4% • Prime office rents were USD600-750 sq m. Class A office rents ranged from RUB24,000 to RUB42,000 sq m/year, while Class B+ rents ranged from RUB12,000 to RUB25,000 sq m/year.
'000 sq m '000 sq m 560 1559 388 -42% +150% -51% +30% 1 000 224 224 768 768
2019 2020 2020 2021F 2019 2020 2020 2021F
Fact Forecast Fact Forecast
Vacancy rates by class
8.1% 10.0% 10.1% 9.6% 12.6% 9.0% 16.7% 11.9% Q4 2019 Moscow market overview | Office market AEB Real Estate Monitor | 1/2021
Class A Class B+ Class B- Overall Q4 2020
22 MOSCOW OFFICE STOCK BY CLASS, Q4 2020 18.98 m sq m Class А Class В+ Class В-
4.6 +6.7%* 9 .4 - 3.4%* 4.9 0.0%*
0 2 4 6 8 10 12 14 16 18
*Growth QoQ
Source: JLL
Moscow officeMoscow market office | Q1 market2019 | Q1 2019
Moscow office market | Q1 2019 23 TRANSACTED SPACE BY CLASS, SECTOR AND LOCATION, 2020
By class By class By busineBys busines sectorss sector By submarketBy submarket
Class А ClassBy class А By business sector By submarket Wholesale Banking & 40% Wholesale & Retail 2% 28Banking% Finance& 29% Class40 А% & Retail 2% 28% Finance 29% Public Wholesale Banking & 6% Class В+ & Retail% 2% 28% FinanceBusiness Services CBD29% 6% 40% Public 2 26Business% Services CBD Class В+ 2% 26% Moscow City Public Moscow City6% Class В+ 43% Business Services CBD % 2% 26% 43 4% 17% Service 19% Moscow City Class В- Industries 43% % % Service 19% 4 17 Industries % Class В- Mining & Service From GR to% TTR 46 Manufacturing% % 19 17% 4 9% 11% Explor17a Industries % Class В- Mining & From GR to TTR 46 Manufacturing % % Outside TTR% 17% 9 11 Explora Mining & From GR to TTR 46 Manufacturing 17% 9% 11% Explora Source: JLL Outside TTR Outside TTR Office property cycle in Moscow Asking rents* Office property cycle in Moscow Asking rents* 24Office OFFICE property PROPERTY cycle CYCLEin Moscow IN MOSCOW 25 ASKINGAsking RENTS* rents* Rental growth 35-55 slowing '000 RUB / sq m / year Rental growthRental growth Q1 2021 20-40 slowing 35-5535-55 ' 000 RUB / sq m / year slowing '000 RUB /' 000sq m RUB / year / sq m / year Q1 2021 Q1 2021 20-4020-40 Rental growth Rents ' 000 RUB' 000/ sq RUBm / year / sq m / year' 00010 RUB /- sq25 m / year falling Prime** Rental growth Rents Class A 10-25 8-12 Rental growth Rents ' 00010 RUB' 000 /- sq 25RUB m / /year sq m / year falling falling ' 000 RUB / sq m / year Prime** Class B+ Prime** Class A 8-12 Class A 8' 000-12 RUB / sq m / year ' 000 RUB / sqClass m /B- year Class B+ Class B+ Class B- Rents *Asking rents exclude VAT. Class B- **Prime rents refer to rents in high quality buildings in the Central Business Rents District (CBD). Rents *Asking rents exclude VAT. *Asking rents**Prime exclude rents VAT. refer to rents in high quality buildings in the Central Business **Prime rents District refer (CBD).to rents in high quality buildings in the Central Business District (CBD). MFK Kvartal West 33,944 sq m B+ MoscowSource: JLL office submarkets, Q1 2019 Source: JLL MFK Kvartal West VTB Arena Park, 8 (Phase II) + 33,944 sq m B MFK Kvartal28,969 West sq m А Moscow office submarkets, Q1 2019 33,944 sq m B+ VTB Arena Park, 8 (Phase II) Moscow office submarketsCBD* Mosc,o wQ1 City 2019Fro m G R to TTR** Outs ide TTR*** Kalibr-Park А 28,969 sq mB+ VTB Arena Park, 8 (Phase19,640 sqII) m Stock, sq m 3,708,584 1,333,502 4,439,899 9,501,004 28,969 sq m А AEB Real Estate CBD*Monitor |M o1/2021scow City Fro m G R to TTR** Outs ide TTR*** Kalibr-Park11 Smolenskiy Passage19,640 (Phase sq II) m АB+ CBD* Moscow City Fro m G R to TTR** Outs ide TTR*** 15,351 sq m Availability,Stock, sq m sq m 363,4413,708,584 1,333,502150,686 492,8294,439,899 1,244,6329,501,004 Kalibr-Park 19,640 sq m B+ Smolenskiy Passage (Phase II) Neva Towers А Stock, sq m 3,708,584 1,333,502 4,439,899 9,501,004 15,351 sq m А Availability, sq m 363,441 150,686 492,829 1,244,632 60,238 sq m Vacancy rate, % 9,8 11,3 11,1 13,1 Smolenskiy Passage (Phase II) 15,351 sq m А ALCONNeva (Phase Towers II) Availability, sq mTransacted363,441 space, 150,686 492,829 1,244,632 60,238 sq m А Vacancy ra te, % 220,0179,8 43,04411,3 148,32011,1 356,62113,1 25,080 sq m А sq m Neva Towers ALCON (Phase АII) Transacted9,8 space, 11,3 11,1 13,1 60,238 sq Yakorm Vacancy rate, % 220,017 43,044 148,320 356,621 25,080 sq mB+А *Thesq mCentral Business District (CBD) submarket comprises the area within and in 12,385 sq m close proximity to the Garden Ring (GR) and Tverskaya-Yamskaya Street. ALCON (Phase II) Transacted space, Yakor 220,017 43,044 148,320 356,621 25,080 sq m А B+ sq m **The* Exc luCentraldes Mo Businessscow City. District (CBD) submarket comprises the area within and in 12,385 sq m close proximity to the Garden Ring (GR) and Tverskaya-Yamskaya Street. *** Including outside MKAD projects. Yakor B+ *The Central Business** Exc luDistrictdes Mo (CBD)scow C submarketity. comprises the area within and in 12,385 sq m close proximity to the Garden Ring (GR) and Tverskaya-Yamskaya Street. *** Including outside MKAD projects. ** Excludes Moscow City.
*** Including ouContacts:tside MKAD projects.
Olesya Dzuba Alexander Bazhenov Polina Bobrova +7 (495) 737 8000 oContacts:[email protected] [email protected] [email protected] www.jll.ru Olesya Dzuba Alexander Bazhenov Polina Bobrova +7 (495) 737 8000 Contacts:[email protected] [email protected] [email protected] www.jll.ru
Olesya Dzuba Alexander Bazhenov Polina Bobrova +7 (495) 737 8000 [email protected] [email protected] [email protected] www.jll.ru Moscow office market | Q1 2019
By class By business sector By submarket
Class А Wholesale Banking & 40% & Retail 2% 28% Finance 29% 6% Public Business Services CBD Class В+ 2% 26% Moscow City 43% 4% 17% Service 19% Class В- Industries % Mining & From GR to TTR 46 Manufacturing 17% 9% 11% Explora Outside TTR
Office property cycle in Moscow Asking rents*
Rental growth 35-55 slowing '000 RUB / sq m / year Moscow office market | Q1 2019 Q1 2021 ' 00020 RUB- / 40sq m / year
Rental growth Rents ' 00010 RUB /- sq25 m / year By class By business sector By submarketfalling Prime** Class A 8-12 Class А ' 000 RUB / sq m / year Wholesale Banking & Class B+ & Retail 2% 28% Finance 29% 40% Class B- 6% Public Business Services CBD Class В+ 2% 26% Rents Moscow City *Asking rents exclude VAT. 43% **Prime rents refer to rents in high quality buildings in the Central Business AEB Real Estate Monitor | 1/2021 Moscow market overview | Office District market (CBD). 4% 17% Service 19% Class В- Industries % Mining & From GR to TTR 46 Manufacturing % % MFK Kvartal West 17% 9 11 Explora 33,944 sq m B+ Moscow office submarkets, Q1 2019Outside TTR VTB Arena Park, 8 (Phase II) 26 MOSCOW OFFICE SUBMARKETS, 2020 28,969 sq m А Office property cycle in Moscow Asking rents* CBD* Moscow City Fro m G R to TTR** Outs ide TTR*** Kalibr-Park 19,640 sq m B+ Stock, sq m 3,708,584 1,333,502 4,439,899 9,501,004 Rental growth 35-55 Smolenskiy Passage (Phase II) А slowing '000 RUB / sq m / year 15,351 sq m Q1 2021 Availability, sq m 363,44120-150,68640 492,829 1,244,632 ' 000 RUB / sq m / year Neva Towers А Vacancy rate, % 9,8 11,3 11,1 13,1 60,238 sq m Rents Rental growth ' 00010 RUB /- sq25 m / year ALCON (Phase II) Transacted space, falling 220,017 43,044 148,320 356,621 25,080 sq m А sq m Prime** Class A 8-12 ' 000 RUB / sq m / year Yakor B+ *The Central Business District (CBD) submarket comprisesClass the B+ area within and in 12,385 sq m close proximity to the Garden Ring (GR) and Tverskaya-Yamskaya Street. Class B- ** Excludes Moscow City.
*** Including outside MKAD projects. Rents *Asking rents exclude VAT. Source: JLL**Prime rents refer to rents in high quality buildings in the Central Business District (CBD).
27 KEY NEW SUPPLY IN 2020 Contacts: MFK Kvartal West 33,944 sq m B+ Moscow office submarkets, Q1 2019 Olesya Dzuba Alexander Bazhenov Polina Bobrova +7 (495) 737 8000 [email protected] alexander.bazhenovVTB@e u.Arenajll.co Park,m 8 (Phasepolina .II)[email protected] www.jll.ru 28,969 sq m А
CBD* Moscow City Fro m G R to TTR** Outs ide TTR*** Kalibr-Park 19,640 sq m B+ Stock, sq m 3,708,584 1,333,502 4,439,899 9,501,004 Smolenskiy Passage (Phase II) 15,351 sq m А Availability, sq m 363,441 150,686 492,829 1,244,632
Neva Towers А Vacancy rate, % 9,8 11,3 11,1 13,1 60,238 sq m
ALCON (Phase II) Transacted space, 220,017 43,044 148,320 356,621 25,080 sq m А sq m Yakor B+ *The Central Business District (CBD) submarket comprises the area within and in 12,385 sq m close proximity to the Garden Ring (GR) and Tverskaya-Yamskaya Street.
** Excludes Moscow City.
*** Including outside MKAD projects.
Source: JLL
Contacts: 12 AEB Real Estate Monitor | 1/2021
Olesya Dzuba Alexander Bazhenov Polina Bobrova +7 (495) 737 8000 [email protected] [email protected] [email protected] www.jll.ru Moscow market overview | Warehouse market AEB Real Estate Monitor | 1/2021
Warehouse market
In 2021, the market will keep the balance. Online opera- Moreover, the share of deals with size >100,000 sq m amount- tors will focus on optimization of business processes after a ed to more than a third of take-up for the first time, previously rapid expansion in 2020. A significant share of speculative the indicator did not exceed 15%. This change reflects in- premises in new construction responds to needs of those, creasing demand from online retailers and multi-channel re- who did not expand last year. tailers. The average size of a deal with retailers is increasing: in 2015 – 26,000 sq m, in 2020 – 40,000 sq m. The indicator The 2020 demand peak results in the growth of new con- remained stable for other categories of operators. struction in 2021. The share of speculative construction in 2021 is high (60%) due to the strong demand for ready to NOT ALL E-COMMERCE COMPANIES EXPAND move in premises among retailers and logistics operators. TO THE REGIONS The ability to start using premises as quickly as possible becomes one of the most important criteria for warehouse In 2021, multi-channel retail operators will dominate in the demand. demand structure in the regions. So far, only the largest pure online retailers are considering the expansion to the regions. DEMAND EXCEEDED EXPECTATIONS The multi-channel companies showed high activity in de- In 2020, the highest take-up on record was observed. veloping online format in the regions in 2020. Pure online The last quarter indicator beat the middle year record. retailers were focused on the expansion in the Moscow region. In 2021, the demand structure will remain stable. The share of retail (including online operators) amounted Generally, the market will keep the balance. Online opera- to 62% of take-up in the Moscow region. Logistics compa- tors extensively growing in 2020 will focus on optimiza- nies showed decrease in demand (-12 p.p. compared to tion of business processes. 2019) due to the high market activity in 2018-2019. We expect that the total share of all retail formats will account Only the largest online retailers consider options for re- for 700,000 sq m in 2021, which will amount to about a gional expansion. In 2-3 years, the growth of demand half of the take-up. from this category can be expected.
28 NEW CONSTRUCTION, CLASSES A&B, ‘000 SQ M
1
1 1 2 1 0 1 1 1 21 0
2012 201 201 201 201 201 201 201 2020 2021
Source: Cushman & Wakefield
2
AEB Real Estate Monitor | 1/2021 13 21 1 10
1 1 1 1 2 1 1 00 1 2 1 1 1 10 1 0 0 1 2 2 2 0 0 Retail 2 2 1 2 1 0 2 2 ro tion 1 1 2 2 1 2 21 1 2 2 10 t er 111 20 1 1 10 20 2 o isti s 10 2 2 1 1 20 nline o erators 2 2 1 2 2 0 01 22 1 1 1 1 1 istri tion 2010 2011 2012 201 201 201 201 201 201 201 2020 2021
1000
00
00
00
200
0
2012 201 201 201 201 201 201 201
Mos o nline o erators Mos o M lti annel retail Re ions nline o erators Re ions M lti annel retail
00
00
200
000
00
00
00
200
000 201 201 201 201 201 201 201 2020 2021
2
1
0
aris Ro e Ma ri Berlin is on on on elsin i Br ssels Mos o Bratisla a A ster a
Rental rate ro t 2020 2021 ore ast 2021
000 s
1 00 20
1 1 000 10 00
0 0 200 200 200 200 200 200 2010 2011 2012 201 201 201 201 201 201 201 2020 2021 00 10 1 000 1
1 00 20
A sor tion 000 s ro t Retail t rno er in e n strial ro tion in e
3,5% Vacancy rate, class A Q3 2020
10
0
0
1 2
0 201 201 201 201 201 201 201 2020 2020
4 000 RUB / sq. m / year Rental rate, class A Q3 2020
00
200
00
00
000 201 201 201 201 201 201 201 2020 2020 1
1 1 2 1 0 1 1 1 1 21 0 1 1 2 1 0 1 1 2012 201 201 201 201 201 1 201 21 201 0 2020 2021 AEB Real Estate Monitor | 1/2021 Moscow market overview | Warehouse market
2012 201 201 201 201 201 201 201 2020 2021
29 DEMAND STRUCTURE CLASSES A&B, ‘000 SQ M
2
2 21 1 10
1 1 21 1 1 2 1 1 10 1 00 2 1 1 10 1 1 1 0 0 1 1 2 1 2 1 1 2 2 1 0 1 00 0 1 1 2 2 1 1 1 0 Retail 2 2 1 10 2 1 0 0 2 1 2 ro tion 1 1 2 2 2 2 1 2 2 2 21 1 0 0 10 t er 111 1 2 20 1 0 1 1 Retail 2 210 20 2 2 o isti s 10 2 2 1 1 2 ro tion 20 1 1 2 2 nline o erators 1 2 2 2 22 1 2 21 01 1 1 1 1 10 1 2 0 1 22 t er 111 20 1 1 istri tion 10 20 2 o isti s 2010 2011 10 2012 2201 2 201 1 1201 201 201 201 201 2020 2021 20 nline o erators 2 2 1 2 01 1 1 1 1 2 0 1 22 Source: Cushman & Wakefield istri tion 2010 2011 2012 201 201 201 201 201 201 201 2020 2021
30 TAKE-UP, CLASSES A&B, ‘000 SQ M 1000
1000 00
00 00
00 00
00 200
200 0
0 2012 201 201 201 201 201 201 201 2012 201 201 201 201 201 201 201 Mos o nline o erators Mos o M lti annel retail Mos o Re ions nline nline o erators o erators Mos o Re ions M lti annel M lti annel retail retail Re ions nline o erators Re ions M lti annel retail
Source: Cushman & Wakefield
00 00 00 00 200 AEB Real Estate Monitor | 1/2021 14 200 000 000 00 00
00 00
00 00
200 200
000 000 20201 1 20201 1 201 201 201 201 201 201 201 201 201 201 2020 2020 2021 2021
2 2 1 1 0 0
aris Ro e Ma ri Berlin is on on on elsin i Br ssels Mos o Bratisla a Berlin aris Ro e Ma ri is onA ster a on on elsin i Br ssels Mos o Bratisla a A ster a Rental rate ro t 2020 2021 ore ast 2021 Rental rate ro t 2020 2021 ore ast 2021
000 s 000 s 1 00 20
1 00 20 1 1 000 1 1 000 10 00 10 00 0 0 200 200 200 200 200 200 2010 2011 2012 201 201 201 201 201 201 201 2020 2021 0 0 00 200 200 200 200 200 200 2010 2011 2012 201 201 201 201 201 201 201 2020 2021 10 00 1 000 1 10 1 000 1 00 20 1
1 00 20 A sor tion 000 s ro t Retail t rno er in e n strial ro tion in e
A sor tion 000 s ro t Retail t rno er in e n strial ro tion in e 3,5% Vacancy rate, class A Q33,5% 2020 Vacancy rate, class A 10 Q3 2020
10 0 0 0
1 2 0
0 1 2 201 201 201 201 201 201 201 2020 2020
0 201 201 201 201 201 201 201 2020 2020
4 000 RUB / sq. m / year Rental rate, class A Q3 2020
4 00 000 RUB / sq. m / year Rental rate, class A Q3 2020 200 00
00
200
00
00
000 201 201 201 201 201 201 201 2020 2020 00
000 201 201 201 201 201 201 201 2020 2020 1
1 1 1 2 1 0 1 1 1 1 2 1 21 0 1 0 1 1 1 21 0
2012 201 201 201 201 201 201 201 2020 2021
2012 201 201 201 201 201 201 201 2020 2021
2
2 21 1 10 21 1 1 1 10 1 1 2 1 1 00 1 2 1 1 1 1 1 10 1 1 2 1 0 0 1 1 2 2 2 1 00 1 2 0 1 1 0 1 2 1 10 Retail 2 2 1 0 0 1 0 2 1 2 2 2 2 ro tion 1 1 2 2 0 1 2 0 21 1 2 21 2 10 1 0 t erRetail 2 2 20 1 2 10 111 2 1 o isti s 10 2 2 2 20 2 ro tion 1 2 2 1 1 1 1 20 2 2 21 1 nline t er o erators 2 2 1 2 10 2 0 01 22 1 111 20 1 1 1 1 1 1 istri tion 10 20 2 o isti s 10 2 2 1 1 2010 201120 2012 201 201 201 201 201 201 201 2020 2021 nline o erators 2 2 1 2 2 0 01 22 1 1 1 1 1 istri tion 2010 2011 2012 201 201 201 201 201 201 201 2020 2021
1000
1000 00
00 00
00 00
00 Moscow market overview | Warehouse market AEB Real Estate Monitor | 1/2021 200
200 0
2012 201 201 201 201 201 201 201 0 THE RENTAL RATE REMAINS STABLE
2012 20Mos o 1 nline201 o erators201 201 Mos o 201 M lti annel201 retail201 In 2021, we expect a nominal growth of rental rates in 4,250 RUB/sq m/year. In 2021, CPI forecast for Russia is Re ions nline o erators Re ions M lti annel retail the Moscow region in line with inflation. 3.7%, as a result the real rental rate will remain stable. Simi- Mos o nline o erators Mos o M lti annel retail larly, fluctuations between the rental rate growth and CPI in Re ions nline o erators Re ions M lti annel retail The high share of speculative new construction will keep Berlin and Lisbon are forecasted within 0.3 p.p. The highest the balance on the market and constrain the real growth growth of rental rates is noted in European cities where the of rental rates in the Moscow region. The nominal growth growth exceeds CPI, for example, in London and Helsinki of rental rate will amount to 3.7%, the indicator will reach (real growth will be more than 1.6 p.p.).
0031 RENTAL RATE, THE MOSCOW REGION, CLASS A, RUB/SQ M/YEAR
00 00 200 00 000 200 00 000 00 00 00 00 200 00 000 200 201 201 201 201 201 201 201 2020 2021 000 201 201 201 201 201 201 201 2020 2021
Source: Cushman & Wakefield
32 RENTAL RATE GROWTH BY EUROPEAN CITIES, 2020-2021, %
2 1 2 0 1
0 aris Ro e Ma ri Berlin is on on on elsin i Br ssels Mos o Bratisla a A ster a aris Ro e Ma ri Berlin is on on on elsin i Br ssels Mos o Bratisla a Rental rate ro t 2020 2021 ore ast 2021 A ster a
Source: Cushman & Wakefield Rental rate ro t 2020 2021 ore ast 2021
000 s AEB Real Estate Monitor | 1/2021 15
1 000 00 s 20
1 00 1 20 1 000
10 1 1 000 00 10 00 0 0 200 200 200 200 200 200 2010 2011 2012 201 201 201 201 201 201 201 2020 2021
0 0 00 200 200 200 200 200 200 2010 2011 2012 201 201 201 201 201 201 201 2020 2021 10 00 1 000 1 10 1 000 1 00 20 1
1 00 20 A sor tion 000 s ro t Retail t rno er in e n strial ro tion in e
A sor tion 000 s ro t Retail t rno er in e n strial ro tion in e
3,5% Vacancy rate, class A Q3 20203,5% Vacancy rate, class A Q3 2020 10 10 0
0
0
1 0 2
1 2 0 201 201 201 201 201 201 201 2020 2020 0 201 201 201 201 201 201 201 2020 2020
4 000 RUB / sq. m / year Rental4 rate, 000 class A Q3 2020RUB / sq. m / year Rental rate, class A 00Q3 2020
00
200
200
00
00
00
00
000 201 201 201 201 201 201 201 2020 2020 000 201 201 201 201 201 201 201 2020 2020 1
1 1 2 1 0 1 1 1 21 0
2012 201 201 201 201 201 201 201 2020 2021
2
21 1 10
1 1 1 1 2 1 1 00 1 2 1 1 1 10 1 0 0 1 2 2 2 0 0 Retail 2 2 1 2 1 0 2 2 ro tion 1 1 2 2 1 2 21 1 2 2 10 t er 111 20 1 1 10 20 2 o isti s 10 2 2 1 1 20 nline o erators 2 2 1 2 2 0 01 22 1 1 1 1 1 istri tion 2010 2011 2012 201 201 201 201 201 201 201 2020 2021
1000
00
00
00
200
0
2012 201 201 201 201 201 201 201
Mos o nline o erators Mos o M lti annel retail Re ions nline o erators Re ions M lti annel retail
00
00
200
000
00
00
00
200 AEB Real Estate Monitor | 1/2021 Moscow market overview | Warehouse market 000 201 201 201 201 201 201 201 2020 2021
MARKET FORECAST
In 2020, the share of retail (both offline and online) this case, the recovery in retail turnover will support a was more than a half of take-up. Expansion of the seg- high demand on the warehouse market in short term. ment will be the key factor influencing the warehouse market. The conservative scenario assumes a longer recovery period for the consumer market. The recovery will take The growth of the consumer market is a driver for the 1.5-2 years. The indicators will reach the level of 2019 retail sector.2 The socio-economic forecast of the Russian not earlier than in mid-2022. For the warehouse market, Federation contains two scenarios: a baseline forecast this means that companies that expanded in 2020 will 1 (a quick rebound in 2021 with following stabilization) be focused on business processes optimization in short and a conservative0 one (a long recovery). term. Further demand growth will be possible along with the recovery of the consumer market. aris Ro e Ma ri Berlin is on The baseline on on scenario elsin i assumesBr ssels the consumer market Mos o Bratisla a outrunning recovery. This will support the growth of e- In 2021, the market expects stabilizationA ster a of demand and a commerce and opportunities for retailers’ expansion. In return to average annual indicators of 2018-2019. Rental rate ro t 2020 2021 ore ast 2021
33 DEMAND DRIVERS, THE MOSCOW REGION, CLASS A
000 s
1 00 20
1 1 000 10 00
0 0 200 200 200 200 200 200 2010 2011 2012 201 201 201 201 201 201 201 2020 2021 00 10 1 000 1
1 00 20
A sor tion 000 s ro t Retail t rno er in e n strial ro tion in e
Source: Cushman & Wakefield
3,5% Vacancy rate, class A Q3 2020
10 16 AEB Real Estate Monitor | 1/2021 0
0
1 2
0 201 201 201 201 201 201 201 2020 2020
4 000 RUB / sq. m / year Rental rate, class A Q3 2020
00
200
00
00
000 201 201 201 201 201 201 201 2020 2020 AEB Real Estate Monitor | 1/2021
Реклама AEB Real Estate Monitor | 1/2021 17 AEB Real Estate Monitor | 1/2021 Moscow market overview | Hospitality market
Hospitality market
The upscale hotels is the only segment that demonstrated Comparing the results of 2020 to the previous year we a positive trend in rouble ADR (average daily rate) com- can observe a significant decrease of both rouble and pared to 2019 and showed a 7% increase (RUB 14,772). US dollars figures, caused by the overall influence of Rouble RevPAR (revenue per available room) showed a COVID-19: decrease – 67% and comprised RUB 3,453. US dollar fig- • Notwithstanding the fact that certain restrictions were ures of ADR fell by 5% and comprised USD 202, also US eased or removed we still observe only a slight growth of dollar RevPar dropped by 70% (USD 48). The overall oc- hotel occupancy across all segments. But closed borders cupancy decreased by 50% in 2020 (26%). with most countries and remaining restrictions within Russia make it very difficult for Moscow hotels to run a Business hotels showed the following results in 2020: US business and reach their operating breakeven point. dollar RevPAR decreased by 67% (USD 24) which was • The US dollar/rouble exchange rate raised by 20% in composed of a 42% occupancy decrease (40%) and 2020 comparing with the 2019. This fact explains a nota- 37% drop of ADR nominated in US dollars (USD 56). The ble drop of indicators nominated in US dollars in line with rouble RevPAR decreased by 63% (RUB 1,747) and ADR a slight decrease of roubles figures. dropped by 29% (RUB 4,089). An absolute gap in RevPAR between market segments A drop of indicators was observed in the midscale seg- demonstrated the following results: ment. ADR and RevPAR nominated in roubles decreased • The gap between the upscale and midscale segments by 25% and 59% respectively amounting to RUB 2,773 comprised USD 31/RUB 2,234 compared to USD 115/RUB and RUB 1,220. The US dollar ADR dropped by 33% (USD 7,392 in 2019. 38) so as RevPAR which decreased by 63% (USD 17). • The difference in RevPAR between upscale and busi- Overall occupancy fell by 37% (43%). ness hotels changed to USD 24/RUB 1,707 vs 2019 re- sults (USD 87/RUB 5,632). Economy segment of Moscow hotels which is mostly rep- resented by Soviet-era objects showed ADR in the amount Hotels opened in 2020: of RUB 1,676 in 2020 (26% decrease as compared with • The hotel Mövenpick Moscow Taganskaya (156 rooms) 2019). Occupancy demonstrated 45% drop (27%) result- opened in Moscow at Zemlyanoy Val Street, 70, bld. 1. ing in 68% decrease of RevPAR – RUB 510. ADR in US The hotel with the total area of 10,600 sq m includes dollar equivalent decreased by 34% and comprised USD a conference area, a fitness zone, parking and restau- 23. RevPAR amounted to USD 7 which is 71% lower com- rants. paring to corresponding period of 2019. • InterContinental Hotels Group opened Holiday Inn Ex- press in Moscow region (Khimki) in December 2020 near Average occupancy across all market segments of Mos- the Sheremetyevo international airport (about 7 km). The cow hotels showed a decrease – 43% and comprised hotel includes 115 rooms, a restaurant and a bar. 34%. During 2020 US dollar ADR decreased by 19% (USD 80). ADR nominated in roubles decreased by 9%, The following branded hotels are announced to be open and amounted to RUB 5,828. US dollar RevPAR and Rev- in 2021; five of nine projects were initially scheduled to PAR nominated in roubles decreased by 68% and 65% open in 2020 but due the current situation with COVID-19 respectively amounting to USD 24 and RUB 1,732. were shifted to 2021. (34 )
18 AEB Real Estate Monitor | 1/2021 Moscow market overview | Hospitality market AEB Real Estate Monitor | 1/2021
34 FUTURE BRANDED HOTELS ANNOUNCED FOR OPENING IN MOSCOW IN 2021
Name Number of rooms Address
Crowne Plaza Moscow – Park Huaming 340 Vilgelma Pika Street, 14
Four Points by Sheraton Moscow Vnukovo Airport 250 Vnukovskaya Bolshaya Street, 8
Hampton by Hilton Rogozhsky Val 147 Rogozhsky Val Street, 12
Marriott Imperial Hotel 268 Krasnoprudnaya Street, 12, bldg. 1
Vertical BW Signature Collection 83 Malye Kamenschiki Street, 16
AC Moscow Bolshaya Sadovaya 240 Bolshaya Sadovaya Street, 8
Between Nikitskaya Bolshaya Street and Kislovsky Bvlgari Moscow 60 Sredny Lane
DoubleTree by Hilton Moscow 99 n/a
Radisson Blu Leninsky Prospect Hotel, Moscow 150 Leninsky Avenue, 90/2
Total: 9 hotels 1637 rooms
Sources: EY database, open sources, operators’ data
35 5-STAR HOTELS: ADR (RUB) AND OCCUPANCY DYNAMICS, 2020 VS 2019 star otels A R R B an o an na i s 201 s 201
0 000 100
000 0 0 000 0 000 0 0 000 0 2 000 0 20 000 0 1 000 0 10 000 20 000 10 0 0 an e ar a r a n l a se o t no e
A R R B 201 A R R B 2020 an 201 an 2020
Source: EY analysis star otels A R R B an o an na i s 201 s 201
100 1 000 0 1 000 0 1 000 0 12 000 0
AEB10 000 Real Estate Monitor | 1/2021 0 19
000 0
000 0
000 20
2 000 10
0 0 an e ar a r a n l a se o t no e
A R R B 201 A R R B 2020 an 201 an 2020
star otels A R R B an o an na i s 201 s 201
1 000 100 0 12 000 0 10 000 0 0 000 0 000 0
000 0 20 2 000 10 0 0 an e ar a r a n l a se o t no e
A R R B 201 A R R B 2020 an 201 an 2020
2 star otels A R R B an o an na i s 201 s 201
1 000 100 0 12 000 0
10 000 0
0 000 0 000 0
000 0 20 2 000 10
0 0 an e ar a r a n l a se o t no e
A R R B 201 A R R B 2020 an 201 an 2020
A era e ar et A R R B an o an na i s 20 1 s 201
22 000 100 20 000 0 1 000 0
1 000 0 1 000 0 12 000 0 10 000 0 000 0 000 20 000 2 000 10 0 0 an e ar a r a n l a se o t no e
A R R B 201 A R R B 2020 an 201 an 2020 star otels A R R B an o an na i s 201 s 201 star otels A R R B an o an na i s 201 s 201 0 000 100
0 000 0 100
0 000 0 0 000 0 0 000 0 2 0 000 0 202 000 0 1 20 000 0 101 000 20 0 10 000 10 20 0000 10 0 AEB Real0 Estate an Monitor e | 1/2021 ar a r a n l a Moscowse marketo t overviewno | Hospitality e 0 market an e ar a r a n l a se o t no e
A R R B 201 A R R B 2020 an 201 an 2020 A R R B 201 A R R B 2020 an 201 an 2020
star otels A R R B an o an na i s 201 s 201 36 4-STAR HOTELS: ADR (RUB) AND OCCUPANCY DYNAMICS, 2020 VS 2019 star otels A R R B an o an na i s 201 s 201 100 1 000 0 100 1 000 1 000 0 0 1 000 1 000 0 0 1 000 12 000 0 12 000 0 10 000 0 10 000 000 0 000 0 000 0 000 0 000 20 000 2 000 20 10 2 000 10 0 0 an e ar a r a n l a se o t no e 0 0 an e ar a r a n l a se o t no e
A R R B 201 A R R B 2020 an 201 an 2020 A R R B 201 A R R B 2020 an 201 an 2020 Source: EY analysis
star otels A R R B an o an na i s 201 s 201 37 3-STAR HOTELS: ADR (RUB) AND OCCUPANCY DYNAMICS, 2020 VS 2019 star otels A R R B an o an na i s 201 s 201 1 000 100 1 000 100 0 12 000 0 12 000 10 000 0 10 000 0 000 0 000 0 000 0 000 000 0 000 20 0 2 000 10 20 2 000 0 0 10 0 an e ar a r a n l a se o t no e 0 an e ar a r a n l a se o t no e A R R B 201 A R R B 2020 an 201 an 2020 A R R B 201 A R R B 2020 an 201 an 2020
Source: EY analysis 2 star otels A R R B an o an na i s 201 s 201 2 star otels A R R B an o an na i s 201 s 201 1 000 100 1 000 100 0 12 000 0 12 000 10 000 0
10 000 0 000 0 000 0 20 000 AEB Real Estate Monitor | 1/2021 0 000 0 000 0 000 20 0 2 000 10 20 2 000 0 0 10 an e ar a r a n l a se o t no e 0 0 an e ar a r a n l a se o t no e
A R R B 201 A R R B 2020 an 201 an 2020 A R R B 201 A R R B 2020 an 201 an 2020
A era e ar et A R R B an o an na i s 20 1 s 201 A era e ar et A R R B an o an na i s 20 1 s 201 22 000 100 2220 000 0 100 201 000 0
1 000 0 1 000 0 1 12 000 0 1210 000 0 10 000 0 000 0 20 000 20 2 000 10 2 0000 10 0 0 an e ar a r a n l a se o t no e 0 an e ar a r a n l a se o t no e A R R B 201 A R R B 2020 an 201 an 2020 A R R B 201 A R R B 2020 an 201 an 2020 star otels A R R B an o an na i s 201 s 201
0 000 star otels A R R B an o an na i s 201 s 201 100
0 000000 100 0
0 000000 0 0 0 000000 0 0 0 000000 0 0 02 000000 0 0 2 20 000000 0 0 201 000000 0 0 1 10 000000 0 20 10 000000 20 10 0000 10 0 an e ar a r a n l a se o t no e 0 0 an e ar a r a n l a se o t no e A R R B 201 A R R B 2020 an 201 an 2020 A R R B 201 A R R B 2020 an 201 an 2020
star otels A R R B an o an na i s 201 s 201 star otels A R R B an o an na i s 201 s 201 100 1 000 100 0 1 1 000000 0 0 1 1 000000 0 0 1 12000000 0 0 12 000 10 000 0 0 10 000 000 0 0 000 000 0 0 000 000 0 20
2000000 20 10
2 0000 10 0 an e ar a r a n l a se o t no e 0 0 an e ar a r a n l a se o t no e A R R B 201 A R R B 2020 an 201 an 2020 A R R B 201 A R R B 2020 an 201 an 2020
star otels A R R B an o an na i s 201 s 201 star otels A R R B an o an na i s 201 s 201 1 000 100 1 000 100 0 12 000 0 0 12 000 10 000 0 0 10 000 0 0 000 0 0 000 000 0 0 000 000 0 0 000 0 20 2 000 20 10 2 000 0 10 0 an e ar a r a n l a se o t no e 0 0 an e ar a r a n l a se o t no e Moscow market overview | Hospitality market AEB Real Estate Monitor | 1/2021 A R R B 201 A R R B 2020 an 201 an 2020 A R R B 201 A R R B 2020 an 201 an 2020
2 star otels A R R B an o an na i s 201 s 201 38 2-STAR HOTELS: ADR (RUB) AND OCCUPANCY DYNAMICS, 2020 VS 2019 2 star otels A R R B an o an na i s 201 s 201 1 000 100 1 000 100 0 12 000 0 0 12 000 10 000 0 0
10 000 0 0 000 0 0 000 000 0 0 000 000 0 0 000 0 20 2 000 20 10 2 000 0 10 0 an e ar a r a n l a se o t no e 0 0 an e ar a r a n l a se o t no e
A R R B 201 A R R B 2020 an 201 an 2020 A R R B 201 A R R B 2020 an 201 an 2020
Source: EY analysis
39 AVERAGEA era e MARKET ar et A R ADR (RUB) AND R B OCCUPANCY an o an DYNAMICS, na i s 2020 VS 2019 20 1 s 201 A era e ar et A R R B an o an na i s 20 1 s 201 22 000 100 2220 000000 100 0 201 000000 0 0
1 1 000000 0 0 1 000 1 000 0 0 1 12 000000 0 0 1210 000000 0 0 10 000 000 0 0 000000 0 20 000000 20 2 000000 10 2 0000 10 0 0 an e ar a r a n l a se o t no e 0 an e ar a r a n l a se o t no e A R R B 201 A R R B 2020 an 201 an 2020 A R R B 201 A R R B 2020 an 201 an 2020 Source: EY analysis
AEB Real Estate Monitor | 1/2021 21 AEB Real Estate Monitor | 1/2021 Moscow market overview | Hospitality market
40 OPERATIONAL INDICES DYNAMICS
2020 2019 2020/2019, % (USD/RUB) (USD/RUB)
5 stars
Occupancy 26% 76% -50%
Average daily rate (ADR) 202/14,772 214/13,808 -5/7
Revenue per available room 48/3,453 161/10,352 -70/-67% (RevPAR)
4 stars
Occupancy 40% 82% -42%
ADR 56/4,089 89/5,774 -37/-29
RevPAR 24/1,747 73/4,720 -67/-63
3 stars
Occupancy 43% 80% -42%
ADR 38/2,773 57/3,703 -33/-25
RevPAR 17/1,220 46/2,960 -63/-59
2 stars
Occupancy 27% 72% -45%
ADR 23/1,676 35/2,257 -34/-26
RevPAR 7/510 25/1,613 -71/-68
Average
Occupancy 34% 77% -43%
ADR 80/5,828 99/6,385 -19/-9
RevPAR 24/1,732 76/4,911 -68/-65
Source: Smith Travel Research, EY analysis and forecast
22 AEB Real Estate Monitor | 1/2021 Moscow market overview | Housing market AEB Real Estate Monitor | 1/2021
Housing market
The most notable trends in 2020 for the Moscow high- The deficit of quality apartments available for rent in the budget rental segment were an increase in the share of budget range popular with clients (200,000 – 350,000 rou- Russian clients in the overall demand structure and a bles/month) in the city center and the Western and South- change in tenants’ “riders”. Western Administrative Districts of Moscow is especially evident. The above-mentioned changes led to downward Now potential tenants are more closely assessing the adjustments in rental rates: asking rental rates decreased quality of an apartment, both in terms of its occupancy on average by 14% to 235,000 roubles per month in the and its condition as a whole. Therefore, it is worth paying last quarter of 2020, and offered rates from owners de- special attention to thorough cleaning, dry cleaning, and creased by 5% to 327,000 roubles per month. The drop disinfection before renting a property. in rental rates served as motivation for the search for new and more comfortable accommodation at lower budgets. According to Intermark’s estimates, the level of demand Thus, in the second half of the year we saw a large number at the beginning of 2021 is still below the “pre-COVID” of moves due to the desire of clients to rent a higher qual- level. However, we expect healthy stabilization of the ity property that they could not previously afford. Because market at the same level as two years ago. of the decrease in tenant activity, the market safety margin showed an increase of about six months since December KEY FIGURES 2019: from 1.4 to 2.1 years. The indicator conventionally reflects the time required to lease all the apartments cur- The outflow of foreign personnel from Russia and the tem- rently on offer, assuming the current volume of demand is porary relocation of a portion of clients from Moscow led to maintained. Thus, the highest value for this indicator was an increase in the number of properties on offer and the for- recorded in the spring of this year during the first wave of mation of greater competition in the market in the summer the coronavirus: more than 4 years. of 2020, but since July we have noted a downward trend in the volume of supply. Thus, the number of offered lots for the last six months decreased by 9%.
41 NUMBER OF HIGH-BUDGET PROPERTIES OFFERED FOR RENT
,,, ,,, ,9 99, 9,, 9,,, ,; ;;, ;,,
Source: Intermark Relocation
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AEB Real Estate Monitor | 1/2021 Moscow market overview | Housing market SUPPLY The number of high-budget properties available for rent Over the last year, the share of one-bedroom apartments has decreased by 3% since the beginning of 2020 and has decreased (-3%), while the share of one- and two- 9% since July. bedroom apartments (with one bedroom), in contrast, has increased by a comparable value.
During the second half of 2020, the rental market for high- budget housing in Moscow showed a general trend,, towards, ,,,TENANT,9 PROFILE99, 9,, 9,,, ,; ;;, ;,,
a decrease in the supply volume. The number of apartments put up for rent during that period varied from -8% to +4% In general, from the beginning of 2020 to the present, (comparing the monthly index with the value of the previ- the share of requests from Russian citizens was almost ous month). Thus, the number of offered lots over the past 60% of the total number of all requests, while about six months has decreased by 9%. In December 2020, the 40% of requests were made by foreign customers. Over greatest volume of elite apartments for rent (more than half the past year, the share of requests from our compa- $UEDW.URSRWNLQVND\D of the market) was in the five following districts of Moscow: triots in the overall structure of demand has increased 7YHUVND\D.UHPOLQ Arbat-Kropotkinskaya (19% of supply), Tverskaya-Kremlin by about 20%. However, if we consider a broader time /HQLQVNL\ 3URVSHNW (18%), Lubyanka-Kitai-Gorod, Leninskiy and Leningradskiy frame, for example, since the end of 2016, the share of /XE\DQND.LWDL*RURG Prospekts (9%). (42 ) Russian citizens has increased by a third from 26% to /HQLQJUDGVNL\3URVSHNW58%. French nationals have been the most active for- The distribution of supply in the studied segment is as.UDVQRSUHVQHQVND\D eign tenants in high-budget real estate over the past follows: the largest share is held by one- and two-bed- =DPRVNYRUHFKLHfew years. Thus, in 2020 we continued to observe the ,,,room lots,,, (23%,9 and 30%,99 respectively),, 9,, two-bedroom9,,, .XWX]RYVN\3URVSHNW,; predominance;;, of requests;,, from French clients – 7% of options (22%), and multi-bedroom lots (16%). The 3DWULDUVKLH3UXG\all requests. Separately, we note a significant share of share of studio apartments (one-bedroom variants) is the demand from the group of tenants represented by .XQWVHYR less represented at 10% of the market. 7VYHWQRL%XOYDUdiplomatic structures. (43 )
)UXQ]HQVND\D 42 TOP 5 DISTRICTS IN TERMS OF SUPPLY IN 2020 3URVSHNW0LUD
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Source: Intermark Relocation
24 5XVVLD 6XSSO\ AEB Real'HPDQG Estate Monitor | 1/2021 )UDQFH ,WDO\
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5XVVLD PRICES 5XVVLD FORECAST )UDQFH )UDQFH
The market remains price sensitive ,WDO\with a gap between land- According to the experience of previous crises, a full mar- lord and tenant expectations,,WDO\ which currently stands at 92,300 ket recovery takes about a year and a half. Today we can *HUPDQ\ roubles. At the beginning*HUPDQ\ of the year, the difference between count on a shorter time frame due to the opening of bor- the rates was less noticeable at 60,70086$ roubles. The situation ders and the possibility of dynamic movement of foreign in the out-of-town real86$ estate market should be noted sepa- personnel, as well as the desire of our compatriots to move .D]DNKVWDQ rately. In the Moscow.D]DNKVWDQ region, the majority of short-term con- closer to work again, rather than doing business remotely. tracts have been transformed into-DSDQ long-term contracts, and All of this can quickly restore the market, and if the epide- this trend is typical -DSDQnot only for homes located a short distance miological situation improves, the crisis could pass before *UHDW%LWDLQ from Moscow *UHDW%LWDLQbut also for more distant properties. the end of next summer.
44 DYNAMICS OF SUPPLY-DEMAND CORRELATION
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Source: Intermark Relocation
AEB Real Estate Monitor | 1/2021 25
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AEB Real Estate Monitor | 1/2021 St. Petersburg market overview | Office market
St. Petersburg market overview
Office market
Only 7 business centres with leasable area of 134,000 their activity increased and there were closed some large sq m were completed in 2020, including 2nd phase of Lakhta transactions. Thus, oil and gas and IT companies remain de- Center with leasable area of 80,000 sq m, which is owner mand drivers despite the crisis. According to our forecasts, occupied and will be fitted out in the next 2 to 3 years. Due these two sectors will continue to lead in the structure of to low demand, developers revised their construction plans new lease agreements in 2021 with a share of more than and postponed completion dates. More than 300,000 sq m 50% of the total volume of transactions. were announced for 2021. The growth of vacancy rate during the year did not have Since the end of 2019, the amount of vacant space in busi- a significant impact on rental rates. Average asking rental ness centers in St. Petersburg increased by 2.2 ppt and rates remained at the level of 2019 – 1,913 roubles per reached 8.4%. sq m including VAT and OPEX for Class A and 1,310 roubles for Class B. Changes in commercial terms in 2021 will de- The information technology sector’s share in the first half pend on the completions volume. of 2020 sharply declined, but in the second half of the year
46 RENTAL RATES AND VACANCY RATE IN THE ST. PETERSBURG OFFICE MARKET
R B/s / ont
2 00 0 0
0 2 000 0 0
2 0 1 00
20 0
1 000 1 0
10 0 00 0
0 0 0 200 2010 2011 2012 201 201 201 201 201 201 201 2020
A era e rent lass A A era e rent lass B a an rate lass A a an rate lass B Source: JLL
26 AEB Real Estate Monitor | 1/2021
2
1
0 1 2 1 2 1 2 1 201 201 201 201 201 201 201 201 201 201 201 201 201 201 2020 2020 2020
1 1 1 1 12 0 12 11 11 12 11 10 10 10 1 0 2
0 2 2
0 2 201 201 201 1 201 2 201 201 201 1 2020 2 2020 2020 2020
e s A e ain art A era e or t eters r taro e s A e
000 s 00
00
00
200
100
0 2010 2011 2012 201 201 201 201 201 201 201 2020 2021
o letions t re o letions R B/s / ont
2 00 0 0
0 2 000 0 0 St. Petersburg market overview | Street retail market AEB Real Estate Monitor | 1/2021 2 0 1 00
20 0
1 000 1 0
10 0 00 0
Street0 retail market 0 0 200 2010 2011 2012 201 201 201 201 201 201 201 2020 The vacancyA era e rate rent lass in 2020A increasedA era e byrent 2.8 lass pptB and a an Restaurants rate lass and A cafés a an were amongrate lass theB most suffered amounted to 11.3%. An active negotiation process be- segments in street retail. Compared to 2019, in 2020 tween tenants and landlords happened during last year. 36% less cafes and restaurants were opened. At the same
Asking rental rates remained unchanged during the first time, Rubinsteina restaurant street retained the main pool half of the year. But since autumn it has been a down- of tenants and showed the minimum level of vacant prem- ward trend, which led to a decrease in the number of ises and rotation level over the past 3 years.
vacant premises in December. It is noted a decline of maximum asking rental rates on all Fashion street retail on Bolshoy Ave. of Petrogradskaya main shopping streets of the city, except for Bolshoy Ave. of Side survived the year with minimal losses. Some famous Petrogradskaya Side. The maximum rental rates on Nevsky brands such as &Other Stories, Cos, Home Concept Store Ave. declined to 10,000 roubles per sq m, over the lowest announced2 the stores opening here. value during the past 8 years. We forecast the stabilization of rental rates in 2021 at the current level. 1
0 1 2 1 2 1 2 1 201 201 201 201 201 201 201 201 201 201 201 201 201 201 2020 2020 2020 47 VACANCY RATE DYNAMICS ON NEVSKY AVE. COMPARED TO THE AVERAGE
1 1 1 1 12 0 12 11 11 12 11 10 10 10 1 0 2
0 2 2
0 2 201 201 201 1 201 2 201 201 201 1 2020 2 2020 2020 2020
e s A e ain art A era e or t eters r taro e s A e
Source: JLL
000 s 00
AEB 00 Real Estate Monitor | 1/2021 27
00
200
100
0 2010 2011 2012 201 201 201 201 201 201 201 2020 2021
o letions t re o letions AEB Real Estate Monitor | 1/2021 St. Petersburg market overview | Retail market
Retail market
In 2020, two new quality shopping centres opened in St. the vacant premises were leased by retailers with seasonal Petersburg – Green Park in Slavyanka with leasable area goods on short-term lease terms. R B/s of 15,000 / ont sq m and 3rd phase of Outlet Village Pulkovo
2 00(5,000 sq m). Current tenants continue to renegotiate 0 0 their lease terms agreements; however, most owners are only willing to reach 0 In 2021, it is announced to open 3 new shopping centres short-term agreements, causing a subsequent return to nego- 2 000 with leasable area of 62,000 sq m – 4th phase of Zanevskiy tiations. As for new operators, the lease terms 0 0 often resemble kaskad near Ladozhskaya metro station, shopping centre step-rent – that is, the tenant is given a discount on rent for 2 0 1 00located in new residential area Solnechniy gorod and Sput- the first months after opening, with a subsequent increase as nik SC near the Lomonosovskaya metro station which was the traffic in the shopping center recovers.20 0 This approach had
1 000completed but not opened. an impact on rental rates for almost all categories of goods. 1 0
By the end of 2020, the vacancy rate reached 3.4%, 0.2 As of end of December 2020, the prime10 0 rents were 60,000 00 ppt less YoY. There was no mass outflow of tenants due to roubles per sq m, excluding VAT and OPEX. At the end of 0 discounts and installment payments for rent. In Q4 2020, 2019, they were around 80,000 roubles per sq m. 0 0 0 200 2010 2011 2012 201 201 201 201 201 201 201 2020 48 VACANCY RATE IN ST. PETERSBURG SHOPPING CENTRES A era e rent lass A A era e rent lass B a an rate lass A a an rate lass B
2
1
0 1 2 1 2 1 2 1 201 201 201 201 201 201 201 201 201 201 201 201 201 201 2020 2020 2020
Source: JLL
1 1 1 1 12 0 12 11 11 12 11 10 10 10 1 0 2
0 2 2
0 28 2 201 201 201 1 201 2 201 201 201 1 2020 AEB2 202 Real0 Estate 2020 Monitor 2020 | 1/2021
e s A e ain art A era e or t eters r taro e s A e
000 s 00
00
00
200
100
0 2010 2011 2012 201 201 201 201 201 201 201 2020 2021
o letions t re o letions R B/s / ont
2 00 0 0
0 2 000 0 0
2 0 1 00
20 0
1 000 1 0
10 0 00 0
0 0 0 200 2010 2011 2012 201 201 201 201 201 201 201 2020
A era e rent lass A A era e rent lass B a an rate lass A a an rate lass B
2
1
0 1 2 1 2 1 2 1 201 201 201 201 201 201 201 201 201 201 201 201 201 201 2020 2020 2020
1 1 1 1 12 0 St. Petersburg market overview | Warehouse market AEB Real Estate1 Monitor2 |1 11/2021 11 12 11 10 10 10 1 0 Warehouse market 2 Eight warehouse complexes with leasable area of 277,000 did not reach the record values of 2019. In the structure 0 sq m were completed in 2020. 2 More than 2 50% of them are of tenants, the largest volume of deals was noted among not represented on the rental market. logistics and manufacturing companies, as well as the e- commerce sector. Tenant0 activity was at a high and vacancy rate declined from 4% in December2 201 2019 201 to 2.3% 20 by1 the end1 20 of1 2020. 2 20Take-1 The 20 asking1 prime 201 rents in1 202the0 existing 2 202 warehouse0 2020 complexes 2020 up volume in the St. Petersburg (430,000e s A e sq ainm) art warehouseA era e orincreased t eters r from 4,000 taro toe s 4,100 A e roubles per sq m per year market exceeded the annual figures of 2017 and 2018 but due to the positive dynamics of demand.
49 COMPLETIONS IN THE ST. PETERSBURG WAREHOUSE MARKET
000 s 00
00
00
200
100
0 2010 2011 2012 201 201 201 201 201 201 201 2020 2021
o letions t re o letions
Source: JLL
AEB Real Estate Monitor | 1/2021 29 AEB Real Estate Monitor | 1/2021 Hot topic
Hot topic:
The pandemic forced coworking to change work modes
Medina Dietz Managing Director, Russia and CIS, Valartis Group
The main event of 2020 was the coronavirus pandemic, competent management is able to wait out a temporary which greatly affected the office real estate market. How- drop in demand because the high rent of such offices ever, the premium office segment suffered the least from is not solely based on the availability of customers who “remote work”. are willing to pay the high rent. At the same time, there are favorable conditions for new rental formats such as An obvious trend this year is the transfer of a good number coworking and smart offices. In the current conditions, of employees to remote work. At the same time, in order the most important things are an accurate calculation to maintain the efficiency of work, employers had to create of the economy of such projects and their ability to of- comfortable working conditions at home, which required fer “budget” options while generating sufficient revenue extra expenses beyond the budget. For example, the cost to cover their expenses. The current problem of the of organizing one workplace at home for a Valartis Group coworking and smart office market is their target audi- employee in Moscow was about 150,000 roubles. ence. In 2020, their former target audience – compa- nies most susceptible to innovation, namely technologi- In addition, for various reasons, among them information cal and young, developing companies – were affected security and the need for the physical presence of em- by anti-pandemic measures far more so than traditional ployees in the office, this model is not suitable for many tenants, since many of these companies, by focusing on companies. On the one hand, remote work creates an development, had not built up a rainy day fund. There- increased emotional burden on an employee, and on the fore, to be successful the new rental forms should be other hand, the restriction on having personal meetings able to attract tenants who are forced to abandon tra- with clients negatively affects the business of companies ditional offices in search of savings and, at the same working in the “premium” segment. If customers pay for time, have enough funds to rent non-traditional offices a premium product, they expect a premium service. It is and are not afraid to spend money, believing in the rapid quite difficult to justify the high cost of a consulting service recovery of the economy. But there are not many such when you conduct negotiations sitting at home. Therefore, optimists, especially in Russia. in the future we do not expect complete rejection of rent- ing premium offices. The elite office segment, despite existing problems, was least affected by the consequences of the pandemic. The The so-called middle class has experienced the greatest general trend in this segment is the preservation of tradi- pressure from the pandemic. The premium segment with tional offices.
30 AEB Real Estate Monitor | 1/2021 Hot topic AEB Real Estate Monitor | 1/2021
Large international companies are able to pay rent and do fice space into zones for both joint and individual work. not seek to transfer all employees to remote work. Con- It develops the idea of an open-space office where every- fidentiality, conditions for efficient work of employees, IT one can choose the most comfortable time, schedule, and infrastructure, and the ability to personally communicate place of work. This allows all employees to work in the with their clients in a private environment are most impor- same room, with work places not assigned to particular tant for such tenants. However, the optimization of person- people, which saves up to 20% of the space. This also al- nel management, resulting in a reduction in leased space, lows for a combined mode of work partly at home and, if affected large companies too. necessary, at the office.
Almost all companies are trying to optimize their budgets. The vacancy rate in Moscow increased by about 5% in At the same time, in the premium real estate rental market Class A buildings and by 7% in Class B buildings. long-term contracts are the norm, so the landlord initially has a more preferred position in such negotiations. How- The exhibited rental rate is changing slightly at the moment, ever, it is not uncommon for a landlord and tenant to agree but in the long run each property owner sets the rental rate on a temporary reduction in the rental rate in exchange for depending on whether they are free to decide on the com- extending the lease term. On the contrary, vacant space mercial terms of the rent or are bound by obligations to a has grown, but if a landlord correctly positions its facili- credit institution and must comply with the covenants. ties, a temporary downtime of premises and reduced load on the service components of the facilities can be used to The general impact of the pandemic on any business optimize their maintenance costs, improve staff skills, and should be assessed after the end of the pandemic. How- re-equip the facilities. The balanced attitude of a facility ever, we still dare to make our own forecast: middle- owner towards vacant space should give the market confi- price facilities less in demand by their former tenants dence that such an owner is doing well. will have to reorient themselves by looking for new formats. The reduction in rental rates will be offset by However, the pandemic has brought to the fore a trend for their growth with the economic recovery. The luxury real optimizing premises. estate market will wash out only those property own- ers who, during the “fat years” preceding the pandemic, The result is an agile office – the most flexible workspace failed to form a financial rainy day fund which could al- which provides for a well-thought-out division of the of- low them to overcome panic.
AEB Real Estate Monitor | 1/2021 31 AEB Real Estate Monitor | 1/2021 Hot topic
Hot topic: State aid for tenants in the era of COVID-19: Russia’s experience
RENT REDUCTION
Small and medium enterprises from the most affected sec- tors of the economy were granted the unconditional right to demand a rent reduction for a period of up to one year. Ilya Lokhanin Other tenants who had no opportunity to use their leased Lawyer, Rödl & Partner property due to the imposition of restrictive measures by the authorities could also make similar demands.
AID FOR TENANTS OF STATE AND MUNICI- PAL PROPERTY The coronavirus pandemic has become an extremely se- rious challenge to the world economy. Many companies Tenants of state and municipal property were also entitled to de- from various business sectors, including the commercial fer their rental payments. Moreover, they were granted the right property market, have been affected by it. Russia is no ex- to extend the contract for up to one year on the same or other ception in this context, as it developed a number of state terms not less favourable for the tenant agreed by the parties. aid measures aimed at protecting the interests of tenants affected by the pandemic. Most of these measures were The tenants of the said property operating in the most enshrined in Federal Law no. 98-FZ of 1 April 2020. affected sectors of the economy could also be exempted from paying rent from 1 April to 1 July 2020, which allowed DEFERRAL OF RENTAL PAYMENTS them to save 7.4 billion roubles.
Organizations and individual entrepreneurs active in TERMINATION OF LEASE AGREEMENTS the sectors of the Russian economy most affected by COVID-19 were entitled to defer their rental payments. Tenants of real estate from the most affected sectors of the The Government included into this list forwarding activi- economy were granted the right to terminate lease agreements ties, organization of leisure and entertainment, sports, by 1 October 2020, if they could not agree with landlords on catering etc. A deferral could be obtained for a period rent reduction or any other change of the terms of the contract. until 1 October 2020 in respect of lease agreements con- To do this, the tenant was required to prove its belonging to cluded before the introduction of restrictive measures in one of the most affected sectors of the economy and the actual connection with the pandemic in the respective region use of the rented premises within the framework of this activity. of the Russian Federation (in Moscow, restrictions were introduced in March 2020). The resulting rent arrears CONCLUSION must be paid by tenants step by step no later than 1 January 2023. The commercial property market was seriously affected by the COVID-19 pandemic. In this connection, the Russian authorities According to the Ministry of Economic Development of took measures to support its participants, which were of both the Russian Federation, this measure allowed tenants to economic and legal nature. The analysis of these mechanisms save about 12.7 billion roubles during the period speci- is necessary to determine their effectiveness and is of great fied in the law. practical importance in the context of the ongoing epidemic.
32 AEB Real Estate Monitor | 1/2021
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