RESEARCH
H1 2019 PRIME RESIDENTIAL REAL ESTATE MARKET Moscow
HIGHLIGHTS
The average weighted lot price showed a new The share of the lots with final finishes There was a slowdown in the developer record increase of 12% in the elite segment rose by 12% since the beginning of the activity. Thus, only two new properties were over the last six months. year causing an increase in the number of launched to the market over Q2 2019. transactions in this category. PRIME RESIDENTIAL REAL ESTATE MARKET. MOSCOW
prime Residential real estate market
Supply
As of H1 2019, about 2,200 lots of elite and strong demand as well as the scarce volume premium new-build residential property, total of new supply. Meanwhile, the supply figure area of 274,000 sq m, were listed for sale in is back at the level of the end of last year. Moscow. The figure has dropped for the first Thus, looking at the current figure changes time since Q3 2018. The number of flats and compared to H2 2018, we can see that the apartments listed for sale decreased by 10% in number of lots has remained unchanged the elite segment and by 8% in the premium (+1% over six months). And the 4% decrease in Andrey Solovyev segment, over the past three months. The elite supply was balanced by the 4 percentage Director of City Sale Department, drop in figures was mainly caused by the point growth in the premium segment. Knight Frank Key indicators. Dynamics Supply “The key market indicators have been Elite Premium changing as expected: the growing Dynamics* Dynamics* demand trend along with the slowdown segment segment in developer activity have led to a drop Total supply, pcs. 801 -4% 1 402 4% in the supply. Meanwhile the current Average price, thousand 1,110 12% 602 0% uncertainty about implementing the rub./sq m new amendments to the law seems to Average area, sq m 155 -1% 107 1% only strengthen the trends. It is already Average price, mln rub. 171 11% 64 1% the case that the demand is gradually Elite Premium shifting towards the secondary high- Dynamics** Dynamics** end market, which is likely to be seen segment segment more distinctly further on.” Demand Total supply, pcs. 157 -13% 398 25% Average price, thousand 892 23% 572 10% rub./sq m Average area, sq m 160 22% 104 9% Average price, mln rub. 142 51% 59 20% * H1 2019 / H2 2018 ** H1 2019/H1 2018 Source: Knight Frank Research, 2019
Supply volume and average price dynamics of the primary market
. S A Source: Knight Frank Research, 2019
2 H1 2019 RESEARCH
Share and average price of supply by district Marina Roshcha
S
Izmajlovo Begovoy Meshhanskij 1 mln 1 11 mln Khoroshevskiy ₽ Krasnosel'skij ₽ Chistye prudy Sokolinaja Gora 1 ₽ 92 mln Basmannyj 1 1 mln ₽ Patriarshie prudy Krylatskoe 1 2 mln A ₽ Lefortovo Perovo 11 112 mln 2 ₽ Filevskiy Park 11 mln Ostozhenka–Prechistenka 1 ₽ Dorogomilovo ₽ 222 mln 9 1 mln Plyushchikha Nizhegorodskij₽ Fili-Davydkovo ₽ 119 mln Ryazanskiy 12 9 mln Juzhnoportovyj ₽ R Danilovskiy ₽ 2 mln Tekstil'shhiki Share A Kuz'minki Gagarinskiy in the total supply price 10 ₽ 10 mln 9 ₽ mln Ochakovo-Matveevskoe Akademicheskiy > 200 mln rub. Other 100–200 mln rub. < 100 mln rub. 1 Nagatinskij Zaton Lomonosovski Kotlovka Nagatino-Sadovniki Ljublino
Complexes where official sales started in H1 2019
Property Number Launch of Delivery Title Address Class Developer Finishes type of lots sales date
Allegoria Ostozhenka St, 4, 6 1 elite Stroyteks apartments 57 March, 2019 No finish Q2 2021 Mosca (Ostozhenka)
Arbat St., 39 February, 2 Artisan elite Valartis Group flats 30 No finish Q4 2016 (Arbat) 2019 Yefremova St, 9А January, 3 Eight Yards premium PST apartments 8 No finish Q1 2020 (Khamovniki) 2019 2nd Zvenigiridskaya St, flats, apart- January, 4 Lucky prop 12, bldg 6 premium Vesper 654 Final finish Q4 2021 ments 2019 (Presnensky) Stoleshnikov Stoleshnikov Ln, 7 bldg VMS-Develop- 5 elite apartments 12 May, 2019 Final finish Q2 2020 7 1 (Tverskoy) ment Noviy Arbat St, 15 January, 6 The Book premium Capital Group apartments 104 Final finish Q3 2019 (Arbat) 2019 Lobachevskogo St, 114 7 Reka premium Donstroy flats 115 June, 2019 No finish Q4 2021 (Ramenki) March, 2019 Kuznetskiy Kuznetsky Most St, 12, (previously 8 elite KR Properties apartments 62 Final finish Q2 2020 Most, 12 14 (Tverskoy) private sales) Source: Knight Frank Research, 2019
3 PRIME RESIDENTIAL REAL ESTATE MARKET. MOSCOW
Only two high-end properties were launched Supply based on their area to the market in Q2 2019: Stoleshnikov 7 Elite Club House by VMS-Development 2 2 and Reka Premium Residential Complex by 9 Donstroy. Therefore, the number of new 19 10 1 properties amounted to eight in H1 2019, including the complex Kuznetsky Most 12, which finally came out of private sales in E Spring 2019. 2 100 100 1 0 Meanwhile, Reka is situated in Ramenki 1 0 200 district, which is quite a rare location for 200 2 0 this price range, for it is seldom that high- 2 0 end properties are built outside Central Administrative District. Indeed, all the high- Source: Knight Frank Research, 2019 end properties were launched exclusively within the central districts of Moscow over Supply based on their price the past year and a half. Currently, there are 2 2 several more properties under development that are going to be located in the western 9 part of the city as well. 2 29 The largest volume of supply is still concentrated in Presnensky district (16% of E all supply). Tverskoy district is on the second 1 0 place followed by Yakimanka with their 13% 0 100 and 12% accordingly, with the latter having 100 1 0 2 pushed Arbat off this position, Arbat’s share 1 0 200 200 now amounting to 11% due to massive sales at The Book project. Source: Knight Frank Research, 2019 The structure of supply has hardly changed in the premium segment over the past six months. Almost half of the supply (47%) Primary market supply structure is represented by compact lots of under 0 0 100 100 1 0 1 0 200 200 100 sq m. Finding a flat or an apartment of over 200 sq m appears to be most difficult 100 2 9 1 0 0 1 0 0 as such lots amount to 4% of all premium 100 1 0 0 22 1 2 1 new-builds. The non-expensive supply priced under 50 million rubles and within 1 0 200 0 0 1 2 50 to 100 million rubles comes in almost 200 2 0 0 0 0 2 0 9 1 2 2 equal shares of 44% and 43% accordingly. 2 0 0 0 0 0 0 2 0 The average area amounted to 107 sq m by the end of June, while the average price Source: Knight Frank Research, 2019 stood at 64 million rubles, which in both cases is by 1 percentage point more than at Supply structure by the construction stage the end of 2018.
The number of expensive lots priced over 150 million rubles has increased by eight percentage points to 39%. Flats and apartments of 100 to 150 sq m still make up a bigger part of the structure of supply by area. The average lot area of elite supply has declined by 1% to 155 sq m over the 2 1 9 C A past six months. The average lot price, on the contrary, reached 171 million rubles Source: Knight Frank Research, 2019 showing an 11%-growth.
4 H1 2019 RESEARCH
Demand Transactions of the primary market based on their area
The quarterly performance on transactions 0 1 is comparable to last year’s figures, namely, 10 1 300 lots over Q2 2019. In general, over 12 550 flats and apartments were sold in H1 2019, with each third of them being with final finishes, while a year ago, the figure did E not exceed 25% of all trading volume. The increase in this category of deals correlates 2 2 directly with the current market trend. The 100 100 1 0 increase in this category of deals is directly 1 0 200 correlated with the market trend for the sale 200 2 0 of the most ready-to-live housing. Thus, 2 0 while about 31% of flats and apartments Source: Knight Frank Research, 2019 had final finishes at the end of 2018, the share of such lots rose to 43% over the Transactions of the primary market based on their price past six months. 1 2 The price of a deal increased by 26% to 83 million rubles as compared to H1 2018, which is largely due to signing several 20 major transactions at high prices. The buyers’ interest to the expensive lots (over 200 million rubles) increased 3 times. Thus, E 2 38 such flats and apartments were sold over the past six months, compared with 14 a year ago. Penthouses, lots with terraces 1 0 and unique view characteristics were 0 100 especially sought-after. 100 1 0 1 0 200 200 Source: Knight Frank Research, 2019
Primary market transactions structure
0 0 100 100 1 0 1 0 200 200
100 0 0 0 0 0 0
100 1 0 22 9 0 0 0 2
1 0 200 0 2 0 1 1 1
200 2 0 0 0 0 0 1 1 2 1
2 0 0 0 0 0 0 0 0 2
Source: Knight Frank Research, 2019
Leading projects
Sadovye Kvartaly Lucky The Book
5 PRIME RESIDENTIAL REAL ESTATE MARKET. MOSCOW
Dynamics of the number and average value of transactions in the premium and elite segments
1 0 200
120 1 0 100 120 0
0 0 0 0 20
0 0 A A S A 201 2019 A A Source: Knight Frank Research, 2019
The number of deals with premium flats Share of transactions by district and apartments of under 100 sq m dropped by 9%, while the decrease amounted to 15% in the elite segment. The share of sold lots of 150 to 200 sq m in area amounted 22 to 31% against 18% a year ago. Therefore, the average lot area amounted to 104 sq m 1 (+9% as compared to last year’s figure) 1 for premium segment and to 160 sq m R (+22% as compared to last year’s figure) 10 for elite segment. Khamovniki remain the most popular 10 location to buy in. Twenty-two percent of all deals were signed here over the past six A months. Meanwhile, only three districts: Khamovniki, Ramenki and Presnensky, – share almost one half of all high-end flats and apartments sold in Moscow since the beginning of the year.
2
S 2
Source: Knight Frank Research, 2019
Prices
The average weighted price of a lot kept fluctuating within one percentage point of a lot showed a 4% quarterly growth in growing in the high-end new-builds market. during H1 2019. It records at 602,000 rubles the elite new-builds segment, while it It amounted to 830,000 rubles per sq m by per sq m by the end of the first six months increased further on by 12% over the past the end of June, which is 2% higher than of the year, which was only by 0.3% more six months amounting to 1,110,000 rubles the Q1 2019 figure and 6% higher than H2 than last year’s final figure. per sq m by the end of June. Another round of growth, in fact, was driven by the 2018 figure. Positive trends have been clearly traced launch of a new project, Stoleshnikov 7. The average weighted price of a premium in the elite market, insuring new record The property’s high prices contributed to square meter remained stable while highs. Namely, the average weighted price
6 H1 2019 RESEARCH
Dynamics of average price
Marina Roshcha Tverskoy Sretenka 9 thousand rub /s m 1 Izmajlovo Begovoy Meshhanskij 2 thousand rub /s m Khoroshevskiy Krasnosel'skij Chistye prudy thousand rub /s m 2 2 Sokolinaja Gora 1 thousand rub /s m
Arbat Basmannyj Patriarshie prudy Krylatskoe9 thousand rub /s m 2 029 thousand rub /s m 10
Ostozhenka–Prechistenka Lefortovo Perovo Filevskiy Park 1 01 thousand rub /s m thousand rub /s m 1
Zamoskvorechye
Plyushchikha 9 thousand rub /s m
Nizhegorodskij thousandFili-Davydkovo rub /s m 12 Ryazanskiy thousand rub /s m R Juzhnoportovyj Danilovskiy 0 thousand rub /s m 12 Tekstil'shhiki Average price
0 thousand rub /s m 1 Kuz'minki Khamovniki Gagarinskiy > 1 mln rub./sq m thousand rub /s m 1 000–700 thousand rub./sq m Ochakovo-Matveevskoe < 700 thousand rub./sq m Akademicheskiy
Source: Knight Frank Research, 2019
Dynamics of average price and supply volume
1 200 200
1 000 1 0 00
00 100
00 0 200
0 0 1 2 1 2 1 2 201 201 2019
S A S A
Source: Knight Frank Research, 2019
the increase of the average price throughout six months ago. The new-build supply in past six months). The largest drop of 12% the segment. the area is limited by only two properties, was recorded for Ramenki district due to the which determine the pricing. Meanwhile, launch of a new property, Reka, as well as a Patriarshiye Prudy remains the priciest the average price of the most affordable decrease in the number of lots listed for sale district of Moscow. The price of the district of the city, Presnensky, amounted in the existing projects. ‘square’ in the location stands at over to 524,000 rubles per sq m (-2% over the 2 million rubles, which is 10% higher than
7 PRIME RESIDENTIAL REAL ESTATE MARKET. MOSCOW
High-end property of the Boulevard Ring
The Boulevard Ring as a location has an exceptional position in the high-end residential property market. It is a horseshoe shaped historic cluster consisting of 10 boulevards and 13 squares with a pretty restrained urban planning, while the share of the residential housing in the area is quite scarce. The territory is considered the most prestigious and expensive as it is the heart of the metropolitan life, both business and culture. The area also boasts with well-developed infrastructure, so many find it an attractive district to live in.
Supply
The supply of high-end real estate housing currently account for about 80%. The It is worth mentioning, that the deficit of vacant of the Boulevard Ring is traditionally limited. share of the premium supply dropped by land plots for new construction along with the Currently, the location has 1/10 part of three times over the past two years to not cultural and historical presence in the territory all high-end property of Moscow listed for more than 20%. The key reason for that is have defined the key vector of development, sale. The volume of supply does not exceed that there haven’t been any new launches which is reconstruction. Currently, more than 36,000 sq m or 250 lots in 13 projects. of premium projects since 2017, as well half of the existing projects (65%) within the Meanwhile, the main part of the as the demand proves to be constantly supply is composed of elite lots, which strong. Boulevard Ring refer to this format.
Share of supply by district
R
R 1
A
1
R 21
R
Source: Knight Frank Research, 2019
8 H1 2019 RESEARCH
The average lot area has grown by 6% (143 sq m against 135 sq m in Q2 2016) over the past Share of the Boulevard Ring three years. The average lot price has shown a significant growth by 23% in three years. It 20 RE amounted to 179 million rubles in H1 2019 (against 145 million rubles in H1 2016).
90 10 Demand
The share of transactions with the properties 0 E E of the Boulevard Ring amounted to about R 5% of all sold lots in the high-end residential property market of Russia’s capital. Source: Knight Frank Research, 2019 Considering the high prices and the limited supply, the sales here are rather singular. Supply structure Thus, about 25 transactions were signed here over H1 2019, 44% of which accounted 0 0 100 100 1 0 1 0 200 200 for the lots with final finishes. Meanwhile, unlike the supply statistics where the elite 0 1 0 0 0 0 0 0 0 0 0 segment is leading the way, the most part of 0 100 0 0 0 0 0 0 the demand here accounts for the premium 100 1 0 0 0 1 0 20 0 0 0 segment, over the past year and a half (56% of deals). 1 0 200 0 0 1 0 9 0 0 9 0
The average weighted achieved price of 200 0 0 0 0 0 0 11 0 the Boulevard Ring properties is by an Source: Knight Frank Research, 2019
Leading projects
NV / 9 Bolshaya Dmitrovka IX Segment: premium Segment: elite Property type: flats Property type: apartments Developer: Insigma Developer: Ingeocenter
NV / 9 is a new premium class club house. It is being constructed Bolshaya Dmitrovka IX is a gated quarter situated in downtown a minute away from the Boulevard Ring. The address is Bolshoy Moscow. Its three mansions are named Svet, Poroda and Istoriya. Nikolovorobinskiy Lane, property 9. NV / 9 is an ensemble of The buildings feature different architecture styles while sharing two buildings, seven and nine stories high, boasting a designer a single living space, a promenade and common infrastructure. inner garden and its own exit to the park. The main entrance is Under the modern mansions, there is an underground parking situated on the road from Bolshoy Nikolovorobinskiy Lane. The that is designed to fit 209 cars and is equipped with an electric underground parking lot comprises 130 car spaces. car charging station, a dedicated elevator for sports cars, and a car wash.
9 PRIME RESIDENTIAL REAL ESTATE MARKET. MOSCOW
average of 25% higher than the figure Primary market transactions structure throughout the market. Excluding the final
0 0 100 100 1 0 1 0 200 200 discounts from developers, it amounts to 1,130,000 rubles per sq m (as based on
0 1 0 0 0 0 0 0 0 0 0 the sold flats and apartments in January through to June 2019). 0 100 0 0 0 0 0 0 0 0 NV/9 Residential Complex was leading the 100 1 0 0 0 1 0 1 0 0 0 0 0 way by the number of sold lots in the 1 0 200 0 0 0 0 0 12 0 premium segment in H1 2019. As many as 200 0 0 0 0 0 0 0 0 1 0 24% of all deals within the Boulevard Ring were signed with this property. Bolshaya Source: Knight Frank Research, 2019 Dmitrovka IX turned out to be the most sought-after property of the elite sector.
Supply volume and average price dynamics within the Boulevard Ring
1 00 Prices 0 1 200 The average weighted price of a square 1 100 0 meter for the Boulevard Ring properties 2 1 000 20 900 amounted to 1,210,000 rubles by the end 1 00 of June, which is 1½ times more than the 10 00 figure for the high-end property market 0 00 2 1 2 1 2 throughout Moscow. The price has grown by 201 201 2019 14% in the location over a year. Meanwhile, S A the average price of a square meter for the premium properties of the Boulevard Ring Source: Knight Frank Research, 2019 amounted to 609,000 rubles. The figure for the elite segment is twice as big and stands at 1.34 million rubles per sq m.
RESEARCH Olga Shirokova Director, Russia & CIS [email protected]
RESIDENTIAL Andrey Solovyev Director [email protected]
+7 (495) 981 0000
© Knight Frank LLP 2019 – This overview is published for general information only. Although high standards have been used in the preparation of the information, analysis, view and projections presented in this report, no legal responsibility can be accepted by Knight Frank Research or Knight Frank for any loss or damage resultant from the contents of this document. As a general report, this material does not necessarily represent the view of Knight Frank in relation to particular properties or projects.
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