Business Parks 2 3

BUSINESS PARKS 2 3

BUSINESS PARK KEY FEATURES

• Located on the main highways away from the city centre

• Business parks’ territory is on an average 10-20 ha, built-up density is 11,000 sq m per ha

• Single concept

• Complex of several buildings

• Low-rise buildings

• Efficient floor plates, rectangular-shaped floors, low loss factor

• Generally surface parking

• Parking area and developed infrastructure inside the complex

• Developed transport infrastructure, often railway stations and organised shuttle buses from the nearest metro station

• Close to airports

Although the first successful project was developed 10 years ago, conventional business parks are still uncommon in the Moscow office market. As a number of business parks are now at the construction stage, this report will not only focus on typical business parks, but will also provide examples of major projects outside the MKAD.

December 2014

City West source: citywest.cz

O2 Telefónica Midfield Expo Gardens source: segro.com source: berlin-airport.de

City West Dubai Media City source: citywest.cz source: tecom.ae

Business park, City centre, Airport, Transport Аirport city distance (km) distance (km) at a walking distance

Chiswick Park, London 13.6 17.2 Heathrow metro BB Centrum, Prague 6.2 18.4 Václav Havel Airport metro Business Garden Warsawa source: businessgarden.pl The Park, Prague 10.4 22.9 Václav Havel Airport metro City West, Prague 11.4 10.6 Václav Havel Airport metro

Business Garden Warsawa Empark, Warsaw 8.8 3.9 Warsaw Chopin Airport train, shuttle bus source: businessgarden.pl Business Garden, 8 2.9 Warsaw Chopin Airport train, bus Warsaw Business parks in Europe first Geographically business parks are train, tramway, appeared in Great Britain to the located away from the city centre, The Park, Warsaw 6 4 Warsaw Chopin Airport west of London in the mid-80s. The along main highways, and usually bus first tenants of business parks were close to airports. One of the key Poleczki Business Park, fast-developing IT companies. It is factors in choosing a location for 12.4 3.7 Warsaw Chopin Airport shuttle bus worth mentioning that historically a business park is easy transport Warsaw these companies were located at accessibility (generally, there a certain distance from London. are metro and railway stations Okecie Business Park, 9.8 2.7 Warsaw Chopin Airport shuttle bus Moreover these were mainly in proximity to business parks, Warsaw American companies and were otherwise there are regular shuttle Sirius Business Park therefore accustomed to the buses running from the nearest Berlin-Gartenfeld, business park concept. In the US the metro stations). It should be noted 11.6 3 Flughafen Berlin-Tegel bus Berlin rise of business parks was noted in that, in Europe, areas of potential the 60s. business park development were Sirius Business Park Eastern Europe could not stand already surrounded by developed Berlin-Borsigwerke, 12 6 Flughafen Berlin-Tegel metro on the sidelines. In the late 1990s transport infrastructure. Berlin business parks were actively built in SEGRO Park 27 3 Flughafen Schönefeld train, bus Poland and the Czech Republic. Berlin-Airport, Berlin

• Chiswick BP is one of the first business parks in Great Britain and Europe

• Chiswick BP still remains a perfect example of a traditional business park

• Chiswick BP is a business park with the highest value. In 2013 it was acquired by China Investment Corporation for more than $1 billion

source: enjoy-work.com

Chiswick Business Park

source: enjoy-work.com

Total area: 167,000 sq m LOCATION: located less than a kilometer away from the traffic Office area: 155,000 sq m roundabout to the M4, A4 and the North/South circulars. Heathrow is 17 kilometers away. Chiswick BP borders with the Local Nature Reserve Stage construction: Gunnersbury Triangle first building was put into operation in 2001, the completion of the last MAJOR TENANTS: PepsiCo Inc., Discovery Communication, QVC, Tullow building is planned for 2015. Oil Plc, Regus, Aker Engineering, Walt Disney Co., Starbucks, Swarovski

INFRASTRUCTURE: restaurants, cafes, bars and shops, health and fitness club, beautician and hairdressers, two dance studios, dedicated cycle and pedestrian routes, feature lake, waterfall and boardwalk

On the basis of an analysis of the main business parks in European cities, a number of common features can be identified:

• rental rates in business parks are 50–75% lower than in office centres situated in the city centre • office space in business parks represents 15–20% of the total office stock in the market • on average the vacancy rate is 10% • typical tenants are pharmaceutical, IT and telecommunications and 2003 source: CBRE 2014 source: CBRE FMCG companies

Quality office buildings were first built in Moscow at the beginning of the 1990s in the centre of the city (Central Business District (CBD) – this district includes the zone inside the Garden Ring plus the area along 1st $2 000 Tverskaya-Yamskaya Street as far as Belorussky railway station). At the $1 800 beginning of the 2000s, developers started to conquer the territory outside $1 600 the Garden Ring. The first office building outside the MKAD – Country $1 400 Park – was put into operation at the end of 2003. In 2004–2005 about $1 200 40–50% of new supply fell within the area outside the CBD but within the $1 000 MKAD. $800 $600 $400 The key determining factors of decentralisation of development and $200 demand in 2004–2005: $- source: CBRE • limited availability of land in the city centre London Prague Warsaw Dubai Moscow • high demand for class A offices stimulated by rapid company growth Average rental rate in business parks as well as willingness to move to new modern business centres Rental rate for Prime Class A offices • significant share of preliminary contracts in the total number of transactions (the major part of transactions were done in buildings that were still under construction). For instance, according to the results for 2004, 40% of class A buildings that were to be commissioned in 2005 were already leased. In 2005 this figure increased to 50% of the new supply for 2006. • as a result of limited new supply and high demand, the vacancy rate However, in some regions, it is common for certain groups of companies was very low: in the CBD it did not exceed 2–4%, and in class A 3–5% to cluster in the same business parks. Thus for instance in Dubai, • lack of office space in the centre of the city forced tenants to turn their manufacturing companies are concentrated in Dubai Industrial City attention to decentralised offices and Dubai World Central, while outsourcing companies opt for Dubai • traffic congestion in the centre of the city Outsource Zone. In England technology companies are situated in business parks to the west of London and are not tied to the capital. In Warsaw such clusters are also starting to emerge: IT companies in The In 2006 the Moscow government first announced limits on the Park Warsaw, pharmaceuticals in Poleczki Business Park, and aviation development of office buildings in the central part of the city, which fueled and travel industries in Okecie Business Park. further decentralisation of the office market.

Sheremetyevo This location is dictated by historical factors: airport Khimki BC Decentralised offices (existing and • favourable ecological environment due to prevailing winds and lack of under construction) are located in hazardous manufacturing waste

the western part of Moscow, in the • main residential areas for business-class and elite cottage

l t

Mebe One Khimki Plaza u north-west, west and south-west of neighbourhoods include Rublevo-Uspenskoe Highway, Novorizhskoe

e s

Country Park II&III v the capital. New projects will also Highway, Kievskoe Highway, Kaluzhskoe Highway k

Aero City o

e be located in these districts. • proximity to international airports – Sheremetyevo, Vnukovo, H

Green Point

i h

g Domodedovo

a w

MKAD y P L D y e m a ning it tn ro its v k r s y o a k a e o w d h H s e g i k i g H o H hw e i g e a

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w y l y s a a o hw y r ig a H Y V e olokol o ams k The above factors are the key characteristics that explain the interest of developers and tenants in these districts, RigaLand Myakinino BC unlike the eastern part of Moscow where industrial areas were concentrated historically. y N 20 KM hwa ovorizhs Hig koe vskoe Hi OR ING elko ghw THIRD TRANSP T R Sh In spite of a certain level of vacancy in some business complexes outside the MKAD, the mix of tenants proves ay this concept to be successful. The tenants of decentralised offices are mainly large Russian and international 17 KM companies. Residence ay ghw way Hi High v skoe sto We analysed the mix of major tenants of A and B+ class office complexes outside the MKAD (the total area spen ia o-U uz ov nt ly E Rub KREMLIN researched was 133,000 sq m). International companies occupy 30% less space than Russian companies (55,000 sq m and 78,000 sq m respectively). However there are twice as many international companies as Russian ones (33 and 18 respectively). So, beyond the MKAD there are offices of large Russian companies with nue GA Ave RD average area of 4,300 sq m, while international companies’ – 1,600 sq m. vsky EN tuzo RING way Ku e High aysko Mozh V y ol Major tenants in class A and B+ office complexes outside the MKAD: hwa go Hig gra oe dsky sk Avenue • Automotive and logistics: Ford Motor Company, Jaguar Land Rover, Volvo Group, DHL Global Min Skolkovo Park • Retailers: Elko, Almi, Merlion e nu ve • FMCG: Danone, Wrigley A ky s • IT/telecommunications: Huawei Technologies, Lenovo n ri u e ch u Mi n ve A y Highway sk koe n K vs ni a ro e o L 18 KM sh B irs ko e H

ig MKAD hw

ay y

Comcity a ay w ghw h Neopolis Hi g oe i evsk Ki H Auto&Logistics Companies The forecast for 2015 shows that IT e o 4% Vnukovo G10 k and telecommunications companies airport s 5% v 18% Retail ha will predominate in terms of area s y r 5% a w a FMCG h V leased as a result of Rostelecom ig H

К2 e o 6% Residential Development (50,000 sq m), Systematica k s h z u l (17,000 sq m) and Oracle (6,400 a Advertising&Marketing K 6% sq m) moving to Comcity. The Publishing share of IT and telecommunications Domodedovo 19% Construction Materials & Equipment companies will therefore reach airport 7% Raw materials & Energy 50%. 7% Agriculture IT/telecom 9% 14% Pharmaceutical Companies source: CBRE

The first traditional business park developed in accordance with the conventional business park image was Krylatsky Hills BP (17 Krylatskaya Street).

source: chrisrue.com Krylatsky Microsoft Microsoft Head Quaters: USA Hills BP Huawei

GlaxoSmithKline CISCO

source: news.dice.com

CISCO Head Quaters: USA

source: CBRE

Moscow river

source: sitepronews.com source: geograph.org.uk

Huawei Head Quaters: China GlaxoSmithKline Head Quaters: UK

The business park was put into operation in H2 2005–H1 2006. Despite the fact that this project differentiated itself from traditional business centres especially due to its distant location away from the city centre and nearest metro station, it turned out to be exceptionally successful. All of the buildings were leased before being put into operation. Tenants About six years later in 2011 the second outstanding are large international companies from industries such as IT and business park project was put into operation – telecommunications, FMCG and pharmaceuticals. Olympia Park at 39 Leningradsky Highway.

It is worth mentioning that the first tenants still occupy the business park The initial developer of this project was Horus Capital; and the vacancy rate has remained zero through the whole period since in 2010 it was acquired by O1 Properties, and in 2011 the development of the complex. Due to the fact that the developer was IT company Kaspersky Laboratory became the owner the first who started to implement such a project, he was able to attract the of the business park, occupying about 70% of the largest business park residents. The key to the success of the project is the building. There has been no space available in the tenants who moved closer to the MKAD busting stereotypes. International business park since it was commissioned. companies were “psychologically” ready to move from the centre of the city, as their headquarters in Europe and the US are generally located in source: CBRE business parks outside the city centre.

Krylatsky Hills BP Olympia Park

source: CBRE source: CBRE source: CBRE source: CBRE

Total/rentable area: 67,000 / 58,600 sq m Total/rentable area: 71,500 / 45,100 sq m Land size: 5.8 ha Land size: 6.2 ha Year of construction: 2005–2006 Year of construction: 2011 Owner: Millhouse Capital Owner: Kaspersky Lab Location: The business park is located on the territory of one of the biggest Developer: Horus Capital/O1 Properties Moscow natural parks – Natural Historical Park Moskvoretsky. One of the Location: located right on the Khimki Reservoir, easy car access to the city advantages of the location is close proximity to the main highways which centre and Sheremetyevo International Airport allows easily access to the city centre and main airports.

source: CBRE source: CBRE

Major tenants: Infrastructure: Major tenants: Infrastructure: Intel, Johnson & Johnson, British cafés, restaurants, shops, beauty Kaspersky Lab, Tele2, BMW Group, park, the Khimki Reservoir beach, American Tobacco, DuPont, salon, dry-cleaning, pharmacy, Tinkoff Credit Systems gyms, Olympic swimming pool, Microsoft, Huawei Technologies, bank football field Cisco Systems, Sun InBev, Colgate

source: CBRE source: CBRE

Country Park Residence

source: CBRE source: CBRE

Green Point, formely Country Park I, is the first office development project In the beginning of 2007 the Residence office complex located outside beyond MKAD, commissioned in December 2003. Initially Country Park the MKAD on Rublevo-Arkhangelskoe Highway was put into operation. was positioned as a “city inside a city”. The territory of Country Park is fully The office complex was positioned as a luxury development and was equipped to provide tenants with favourable environment for work and built to suit the managers living in the direction of Rublevo-Uspenskoe leisure: banks, ATM, restaurants, etc. In 2009 and 2013 two more phases Highway. Despite the widespread practice of signing preliminary contracts were put into operation. in 2005–2007, office space in Residence was leased after the project was commissioned and now, seven years after the business complex was put into operation, there are still offices available that have never been leased. The main reason is the pricing strategy: the office rental rates were comparable to rents for offices in the CBD even during the 2008 crisis. source: CBRE

GREEN POINT COUNTRY PARK 2, 3 Total/rentable area: Total/rentable area: Total/rentable area: 22,000 / 14,500 sq m 18,400 / 16,800 sq m 39,300 / 22,600 sq m Land size: 4.5 ha Year of construction: 2003 Year of construction: 2009–2012 Year of construction: 2007 Owner: Apex Capital Group Owner: BPS International Location: easy accessibility from four major Moscow highways: Kutuzovsky Avenue, Rublevo-Uspenskoe, Novorizhskoe and Mozhayskoe Highways

Developer: BPS International Infrastructure: Major tenants: Land size: 10 ha restaurants, cafés, banks, beauty Wrigley Location: located on the crossing of three main highways in the north-west salon, photo studio, premium of Moscow – Leningradskoe Highway, MKAD and Svobody Street retailers, situated on a vast Infrastructure: congress-hall, canteen, cafés, shops, art-gallery, banks and landscaped territory with a square, ATM, medical centre, kinder garden, tour agency, yacht-club, flower shop, waterworks, parks and leisure zones beach, apartments Major tenants: Volvo Trucks Russia, MANN+HUMMEL, S.C.Johnson, Renault Trucks Vostok, Ferronordic Machines, Mercedes Benz Trucks Vostok

Riga Land Khimki BP

source: CBRE

source: CBRE source: CBRE source: CBRE source: CBRE

At the end of 2007 the first phase of Riga Land Business Park on The project involved 6 office buildings (20,000 sq m each), two hotels and Novorizhskoe Highway was commissioned. Construction of the complex a congress-hall. Currently 2 office buildings have been commissioned, in was finished in 2013. On completion of the business park, a hotel (77 2007 and 2008. Both buildings were practically fully leased on preliminary rooms), conference hall, retail gallery and Ice Centre were added to the lease contracts. existing infrastructure (canteen, cafés and fitness centre).

Total/rentable area: 220,000 / 110,000 sq m Total/rentable area: 42,000 / 40,000 sq m Land size: 7 ha Land size: 20 ha Year of construction: 2007–2013 Year of construction: 2007–2008 Developer: Polishelk Developer: Ikea Location: along Leningradskoe Highway

Major tenants: Major tenants: Infrastructure: Danone, KES Holding, Olma Ford Motor Company, Schuco, conference halls, shops on account Media Group, Ator, Russ Outdoor, Husqvarna, Abbott Laboratories of the shopping centre IKEA / Prodimex Holding, Mosavtodor SA, HARRY’S, Volvo Cars, DHL MEGA

New supply by geographic submarket New delivery and vacancy rate beyond MKAD

1,8 1,4 50% 45% 1,6 1,2 40% 1,4 1,0 35% 30% 1,2 0,8 25%

mln sq m 0,6 1 20%

0,4 15% mln sq m 0,8 10% 0,2 0,6 5% 0,0 0% source: CBRE 0,4 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014F

0,2 Total stock New delivery Vacancy Rate

0 source: CBRE 2006 2007 2008 2009 2010 2011 2012 2013 2014F 2015F Beyond MKAD TTR>MKAD CBD>TTR CBD The return towards centralisation in 2009–2010 can be justified by the The most active period for decentralised projects in terms of new supply following: as well as take-up was 2007–2008 when the space of 313,000 sq m was • due to redundancies, as well as changes in development strategies, commissioned, and deals totalled 205,000 sq m. This period coincides a significant amount of office space was offered for sublease in the with the boom in the Moscow office market, when both new supply and central part of the city – this was the space leased in 2007–2008 as take-up exceeded 1 mln sq m. companies looked to expand • rental rates for these offices were below the market level in order to However the financial crisis of 2008 was a game-changer. New projects stimulate interest were frozen. In 2009–2010, 60% of deals were inside the TTR and the • as a result of the large quantity of offices in the market at low rents, share of deals outside the MKAD fell from 6–7% in 2007–2008 to 2–4%. developers also had to reduce rents • the amount of vacant space in the centre therefore increased while rental rates reduced, and demand became concentrated inside the Take-up by geographic submarket TTR

H1 2014 25% 24% 44% 7% At the end of 2011, decentralisation trend returned. This trend in the post- 2013 21% 23% 50% 6% crisis period was induced by tenants’ attempts to cut rental costs. 2012 30% 23% 41% 7% 2011 25% 27% 47% 1% 2010 33% 30% 35% 2% 2009 21% 43% 32% 4% 2008 19% 30% 45% 7% Thus there is a qualitative difference between decentralisation before 2007 21% 24% 49% 6% the financial crisis of 2008 and onwards. Before the crisis tenants moved 2006 34% 33% 32% 1% outside the TTR driven by the limited amount of available space in the 2005 25% 42% 33% 0% central part of the city, while the main post-crisis motivation is the reduction of rental costs without compromising high quality of the building and 2004 1% 33% 36% 31% source: CBRE effective floorplates. 0% 20% 40% 60% 80% 100% CBD CBD>TTR TTR>MKAD Beyond MKAD

Transport Infrastructure Development Metro 1. Troparevo, was opened in December 2014 2. Rumyantsevo, opening planned for 2014

3. Salaryevo, opening planned for 2014

А т

л 4. Lomonosovsky prospekt, opening planned for 2016

ф у

е 5. Ramenki, opening planned for 2016

в с

к 6. Michourinsky prospekt, opening planned for 2017

22 е

ш е 7. Ochakovo, opening plannedс for 2017 о с Pre-determinants of the decentralisation trend from point of view of both с о

29 с ш МКАД

е 8. Teryoshkovo, opening planned for 2017 ое Л Дм к developers and tenants after 2011: П е и с я н т 9. Solncevo, openingав planned for 2017 тн и р л иц н о с г в о ко р с 10. Borovskoe shosse,р opening planned for 2017 е а к Я ш дск о • Restrictions on office development in the central part of the city о е

сс о ш 11. Novoperedelkino, opening planned for 2017 е е о • Tenants’ high requirements in respect of the quality of construction and

ш с

о с 12. Mamyri, on design stage с е developed infrastructure с се е ос 13. Gazoprovod, on design stage ш • Congestion in the city centre, introduction of paid parking

е Во о локол к 15 14. Communarka, on design stage ам с 28 inside the TTR 15. Spartak, opened in 2014 е осс • Reduction of rental costs е ш вско Но лко ворижс Щё • Opportunity to lease larger areas кое ль ш Третье RoadsТранспортно Ко цо осс е • Improved quality of space е 16. Reconstruction of the road from Kievskoe Highway • High efficiency of workplace to Kaluzhskoe Highway (the village Salaryevo – the • Business-optimisation (consolidation, back-offices outside the MKAD) ов village Mamyri) 2014 иаст нтуз • Opportunity to realise build-to-suit projects ссе е Э е шо 17. Reconstruction of the road from Borovskoeс Highway нско шос Успе • Extension of Moscow borders ёво- бл у to Kievskoe Highway, from the village Rasskazovka Р • Active reconstruction of existing traffic roundabouts and construction to the town Moskovsky 2014 of new ones on the main highways 18. The Northern alternate of Kutuzovsky Avenue, 18 ект С • Construction of new metro stations including stations outside the росп ад кий п ово completion in 2019 зовс 19 е к о MKAD and in New Moscow Куту 19. Theльцо Southern alternate of Kutuzovsky Avenue, шоссе йское Можа 21 project оссе 20 4 е ш В ско 20. The interchange on the crossingо лofгог Mozhayskoe ин радск М ий пр т Highway and the MKAD 2015 ос к пе пе кт ос 21. Reconstruction of Mozhayskoe Highway (Kutuzovsky пр й 5 23 ки с Avenue) from the MKAD to the Garden Ring (area: н и 6 кт р е у сп 24 road from the crossing of the Garden Ring and ч о Ми р п й Novy Arbat Street to the crossing of Mozhayskoe 7 и ск ое шоссе н вск и HighwayК and the MKAD) 2014 ро н а о е ш Б 8 Л и 22. The Northernрс lateral road from Businovskaya 9 ко е

1 interchange toшо Festivalnaya Street 2014 10 МКАД с се 25 23. Reconstruction of the area from Leninsky Avenue to

11 е се2 с шос с ое Mozhayskoeо Highway 2014 евск Ки ш

3 24. Reconstructionе of Leninsky Avenue from Gagarina 17 о к 16 с 27 Squareв to the MKAD project, 2017 ша 25. р The interchange on the crossing of the MKAD and Delivery in 2014–2015 is likely to beat the record of 2007–2008 by 30%. Total delivery in 2014–2015 will reach 12е а с В с о 400,000 sq m of which 40% will be put into operation in 2014. Despite the large volume of new supply, take- ш Leninsky Avenue 2015

е о к 13 с 26. Reconstruction of Kaluzhskoe highway project, 2017 up remains constrained. According to our estimates, take-up outside the MKAD in 2014 is not likely to exceed 26 ж у л а К 70,000 sq m. In H1 2014 it reached 34,000 sq m, half of which is due to the 17,000 sq m Systematica deal in 14 27. The interchange on the crossing of the MKAD and Profsoyuznaya Street 2015 Comcity. 28. Construction of the area from Profsoyuznaya Street to Leninsky Avenue 2016 One of the factors that stimulated active development in the south-west of Moscow was the extension of the 29. Reconstruction of Volokolamskoe Highway from Moscow borders in 2012. Before 2012, the primary areas for active development were north-west and west MKAD to Leningradskoe Highway, including an (65% of existing properties are located there). interchange on the crossing of Volokolamskoe Highway and Stratonavtov Passage 2016 About 200,000 sq m has been announced to be delivered in the next 2 years in New Moscow. This includes 30. Area from Volokolamskoe Highway to projects such as K2, Neopolis, G10 and Comcity. Leningradskoe Highway 2016 source: stroi.mos.ru, rosmetrostroy.ru ©2014. CB Richard Ellis, LLC. All rights reserved 24 25

к2

source: storm.ru

source: storm.ru source: storm.ru source: storm.ru

• Spacious floor plates BUSINESS PARKS • High efficiency ratio • An exceptional car-parking ratio • Beautiful landscape • Excellent accessibility • BREEAM Excellent certified

to Moscow region Kaluzhskoe Highway to Moscow BUSINESS PARKS 2 km from MKAD

Total/rentable area: 74,000 sq m Infrastructure: Land size: 0.6 ha shuttle buses to Teply Stan metro VNUKOVO RUMYANTSEVO Year of construction: 2014–2015 station, Wi-Fi onboard and business SHEREMETYEVO Developer: Storm Properties park in common areas, two high- KONKOVO Location: Kaluzhskoe Highway, 2 quality canteen operators and MKAD km from MKAD cafés, dry cleaners and ATMs KIEVSKOE HWY TYOPLY STAN SALARYEVO 5 MINUTES DRIVE

building A building B building C building D DOMODEDOVO MAMYRI

TRANSFER ROUTE AIRPORT KALUZHSKOE HWY Lobby Lobby Lobby Lobby METRO STATION KOMMUNARKA METRO STATION offices (leasable area) retail canteen, cafe UNDER CONSTRUCTION

G10 Phase 1 Comcity Alfa & Bravo

source: g10park.ru source: g10park.ru source: outperform.ru source: outperform.ru

Business Park G10 is composed of a hotel and business complex, Multifunctional complex of 12 buildings, phase Alpha is commissioned, BUSINESS PARKS multilevel parking, open and covered parking zones. phase Bravo is to be commissioned in 2016. The buildings of the complex are united by a retail gallery of 22,000 sq m. Landscape territory with leisure zones, fitness-centre and a kinder garden. LEED certification. BUSINESS PARKS

Architect: Swanke Hayden Connell Architects Architect: Cigler Marani Architects Total/rentable area: 36,900 / 30,200 sq m Total/rentable area: 430,000 / 162,500 sq m Land size: 12.5 ha Land size: 45 ha Year of construction: 2015 Year of construction: 2014–2016 Developer: ComStrin Developer: PPF Real Estate Location: located close to the crossing of Kievskoe Highway and MKAD Location: Kievskoe Highway, 2 km from MKAD Infrastructure: Infrastructure: Major tenants: hotel, restaurants, fitness-centre, cafés, restaurants, supermarket, Rostelecom, Systematica, Oracle conference-hall, retail shops, fitness-centre, yoga-studio, dry-cleanning, banks, travel agency, flower shop and other services

Skolkovo Park for Business NEOPOLIS

source: skolkovoforbusiness.com source: skolkovoforbusiness.com source: astore-est.ru source: astore-est.ru

Six 6-storey buildings. A landscape park with a decorative lake in the The complex is composed of four 9-storey class A buildings with open centre. terraces on the 9th floor. Fretted facade, built of modern materials (glass composite). Landscaped area in the style of English natural landscape park: rugged topography, natural colours, wild grasses. Green areas:

lawns and trees, planted reservoirs, artificial waterways. Areas for outdoor BUSINESS PARKS activities (playgrounds) and recreational areas (benches, relax-zones). Visitor parking spaces. Art-carpark (unique in Moscow) with a “sport” rooftop: leisure areas and sports grounds (tennis, croquet, mini-golf, petanque, gorodki, fitness machines and aerobic zone).

Architect: Scott Brownrigg Architect: David Roden (DRA Architects) BUSINESS PARKS Total/rentable area: 90,000 / 86,128 sq m Total/rentable area: 103,900 / 57,000 sq m Land size: 10.6 ha Land size: 6.2 ha Year of construction: 2017 Year of construction: 2015 Developer: MillHouse Capital Developer: Astore Estate Location: Business Park is located in the Skolkovo district in the west of Location: located in New Moscow, Kievskoe Highway, 3 km from MKAD Moscow (Kutuzovsky, Michourinsky, Rublevo-Uspenskoe Highway). Easy access from MKAD and Skolkovskoe Highway, express-train stations to Sheremetyevo and Vnukovo are planned

Infrastructure: Infrastructure: cafés, shops, premium restaurant, Conference halls, meeting rooms, coworking, meeting rooms on the conference-halls, hotel, golf course, first floor for public use, 2 canteens run by different catering companies, fitness-club, swimming pool, kinder cafés, restaurants, supermarket, pharmacy, medical clinic, fitness-centre garden with a swimming pool (25 m), SPA-zone, express-manicure, hair-dressing salon, bank, notary officer, express printing services, art workshop, exhibition hall, gallery, storage site, e-shops pick-up point, public amenities centre with dry-cleaning facilities, self-service payment terminal, vending machines, florist, shooting gallery, laser tag

AEROCITY Skolkovo IC

source: CBRE source: CBRE source: CBRE source: CBRE

A business complex with varying number of floors; consists of four Innovation Centre Skolkovo is a “little town” inside Moscow, combining 4 D ECENTRA L ISE PROJECTS buildings designed in a shape of a complex crystal. The business complex mixed-use districts, central zone Z1 and landscape zone. comprises underground parking for 197 cars.

Architect: Swanke Hayden Connell Architects Architect: SANAA, ОМА, Valode&Pistre, Mohsen Mostafavi, Herzog&De Total/rentable area: 49,165 / 32,635 sq m Meuron, David Chipperfield Architects, Stefano Boeri Architetti, «Project Year of construction: 2014 Meganom», BERNASKONI, SPEECH Choban & Kuznetsov Developer: Vysota Total/rentable area: more than 1 mln sq m Location: the business complex is situated in Khimki, on Kurkinskoe Land size: 400 ha

D ECENTRA L ISE PROJECTS Highway, near the Butakovsky Bay. The complex can be easily reached Year of construction: 2015–2020 from MKAD, Leningradskoe and Kurkinskoe Highway, Svobody Street. Developer: Skolkovo The way to the international Sheremetyevo airport takes 15–20 minutes Location: Innovation Centre is situated in the west of Moscow, in proximity to Minskoe and Mozhayskoe highways. Direct access from the MKAD. Corporate shuttle buses operate on Kutuzovky Avenue. The largest transport hub in Moscow is planned to be constructed on the site of the Centre. Possibility to travel by train directly from Belorussky railway station. Construction of a new metro station is planned.

Infrastructure: Infrastructure: coffee shop for tenants, canteen, retail, hotels, post office, museum, supporting retail theatre, sport centre, university, school, kinder garden, medical centre, family campus, transport hub, exhibition centre, police station

A number of major projects outside the MKAD have been announced for delivery within the next few years. For Determining factors for tenants when leasing an office outside the MKAD will be instance Skolkovo Park for Business is to be delivered in 2017 (office area about 86,000 sq m); the developer • a business park’s design is Millhouse Capital. In 2017 Tower 1 is announced for delivery by Crocus Group. The business centre with • developed infrastructure office space of 80,000 sq m will be developed on the territory of Croucus City in Myakininskaya Poima. Some • easy transport accessibility of the potential developments are at the design stage – like the Moscow Region Government projects to create • effective parking ratio “Moscow Regional Cities” in Odintsovo, Kotelniki and Dzerzhinsky, as well as projects in New Moscow such as • rental rates K1 on Kaluzhskoe Highway. It is already quite obvious that the above-mentioned projects will be large in scale; however it is too early to make predictions about type of use, precise size and timeframe. Clearly the critical factors for a tenant when choosing between locations inside and outside the MKAD are economic reasons and the availability of the space needed: In view of the negative geopolitical environment and as a result declining take-up, the competion of most of • the average class A and B+ office rental rate outside the MKAD is $300–450, and inside $500–750 the projects outside the MKAD where construction work has not yet started is expected to be delayed until the depending on the class of the building and its location (space can be leased for less than $500 inside the situation becomes more favourable for developers, namely: MKAD; however these offices tend to fall into the B- class category and are located rather far from metro • reestablishment of a positive image for Russia in the eyes of western countries stations. Notably, these offices constitute only 10% of all business centres with available space) • improvement in Russian economic indicators • inside the MKAD large companies seeking offices over 10,000 sq m have a limited choice of only 12% of all • increased take-up as a result of the above factors available space • falling vacancy rates in the market in general and outside the MKAD in particular • opportunity to lease larger areas (offices leased outside the MKAD can be several times larger than those inside the MKAD within the same rental budget) The large amount of new supply outside the MKAD, together with limited demand in the market in general and in this particular submarket, suggests an increase in vacancy in this area at the end of 2014/beginning of We believe that the major tenants of business parks will remain traditional industries valuing characteristics such 2015. Our estimates show that by the end of 2014 the vacancy rate could rise beyond 25% from its current as high-quality construction, effective floor plates, optimisation and reduction of rental costs. level of 21%. Obviously a large amount of new delivery in one period of time will inevitably lead to a high level of competition on the supply side. However this competition is not likely to lead to a decrease in rental rates, as Key industries – occupiers of business parks: evidenced by its current reasonable level. • IT and telecommunications companies, whose share in the total area occupied will exceed 50% in the near future • Automotive and logistics companies Office rental rates beyond MKAD, • FMCG $/ sq m / year excluding operating costs and VAT • Pharmaceuticals • Back-offices of large industrial holdings and raw materials industry companies $2 000 • Back-offices of banks $1 800 • Innovation companies • Companies providing services to large corporations $1 600 $1 400 According to our forecasts, both international and Russian companies will continue to feature among the tenants $1 200 of business parks. It may be psychologically even easier for international companies to make a step towards $1 000 moving outside the MKAD than it is for Russian companies. Many large international companies operating in $800 the above industries in European countries have offices in decentralised locations. A vivid example is a lease of office space by Oracle in Comcity Business Park. The company moves from the city center, Moscow-City, to New $600 Moscow. $400 $200 Interestingly a number of European business parks are tending to be tenant industry sector specific (e.g. in source: CBRE $0 London, Prague, Warsaw, and Dubai). Business parks in Moscow may also become industry-oriented in future. 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014F Prime Class A Class A Class B Beyond MKAD

For more information please refer to:

Valentin Gavrilov Claudia Chistova Director, Head of Office Research Research Department Research Department Russia, 125047, Moscow, Lesnaya, 5 Russia, 125047, Moscow, Lesnaya, 5 BC «White Square», В BC «White Square», В T.: +7 495 258 3990 Т.: +7 495 258 3990 e: [email protected] e: [email protected]

Elena Denisova Irina Khoroshilova Director, Director, Head of Office Agency Global Corporate Services Russia, 125047, Moscow, Lesnaya, 5 Russia, 125047, Moscow, Lesnaya, 5 BC «White Square», В BC «White Square», В Т.: +7 495 258 3990 Т.: +7 495 258 3990 e: [email protected] e: [email protected]

Tamara Shalnova Analyst, Research Department Russia, 125047, Moscow, Lesnaya, 5 BC «White Square», В T.: +7 495 258 3990 e: [email protected]

Global Research and Consulting This report was prepared by the CBRE Russia Research Team which forms part of CBRE Global Research and Consulting – a network of preeminent researchers and consultants who collaborate to provide real estate market research, econometric forecasting and consulting solutions to real estate investors and occupiers around the globe. Disclaimer Information herein has been obtained from sources believed to be reliable. While we do not doubt its accuracy, we have not verified it and make no guarantee, warranty or representation about it. It is your responsibility to independently confirm its accuracy and completeness. This information is designed exclusively for use by CBRE clients or potential clients and does not constitute any part of an offer or contract. Information and recommendations shall not be used for commercial purposes like sale, publication in mass media or distribution in Internet, and cannot be reproduced without prior written permission of CBRE. CBRE shall not be liable for any projections, opinions, assumptions, estimates or decisions made by any third parties on the basis of information provided herein. © 2014. CB Richard Ellis, LLC. All rights reserved BC White Square, building B 5 Lesnaya Street, Moscow

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