PRIME RESIDENTIAL REAL ESTATE MARKET Moscow
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RESEARCH 2018 PRIME RESIDENTIAL REAL ESTATE MARKET Moscow HIGHLIGHTS The average weighted price increased by A record number of new properties was The number of transactions in 2018 exceeded 12% yoy matching the figure of Q4 2016, i.e. launched to the market, namely 21 properties, that of 2017 by 38%, thus recording a rise 787,000 rub./sq m. 10 of which refer to the elite segment and 11 – in demand. to the premium class. PRIME RESIDENTIAL REAL ESTATE MARKET. MOSCOW prime Residential real estate market from a significant number of supply with Supply loyal pricing. As of the end of 2018, there were about It is worth mentioning that there was a 2,180 flats and apartments listed for sale 10-year record number of properties new on the prime new-build residential property to the high-end residential property market. market, which is 15% less than last year’s Thus, 21 new residential complexes were figure. At the same time, the total cumulative launched to the new-builds market, 11 of area was down by 11% and amounted to 273,000 sq m by the end of 2018. which referred to the premium segment and the remaining 10 to the elite segment. Andrey Solovyev The decrease in supply is mostly caused Director of City Sale Department, by a high-level buying activity, especially As of 2018, almost one third of all supply Knight Frank during the summer. The market benefited (31%) consists of flats and apartments “2018 was marked by a high-level Key indicators. Dynamics activity in the top-priced new-builds Supply residential property market as well as Premium Elite the growth of all key market indicators, Dynamics* Dynamics* segment segment among which the average weighted price, the demand and the developer Total supply, pcs. 1 346 -24% 837 6% activity. As for the buying activity, Average price, it was fueled by new developments 600 6% 993 8% with launch prices, especially in the thousand rub./sq m prime segment. However, the market Average area, sq m 106 0% 156 4% is very likely to be developing less rapidly in 2019 in terms of launching new properties. For the most part, Average price, mln rub. 63 7% 155 13% it is due to the fact that developers Premium Elite Dynamics** Dynamics** have to switch to escrow accounting segment segment system. It is going to specifically Demand influence the prime segment of the market, where most of the projects Total supply, pcs. 810 54% 280 7% are currently being financed through DDU contracts according to Federal Average price, 546 6% 813 -9% Law 214, and replacing the financing thousand rub./sq m system for the existing projects will lead to a leap in prices. So we expect Average area, sq m 99 -8% 148 -8% some of the announced new launches to be postponed”. Average price, mln rub. 54 -2% 120 -17% * Q4 2018 / Q4 2017 ** 2018 / 2017 Source: Knight Frank Research, 2019 2 2018 RESEARCH Supply volume and average price dynamics of the primary market 0 850 00 20 800 200 750 10 100 700 0 0 650 1 2 Q3 Q4 1 2 Q3 Q4 1 2 Q3 Q4 201 201 2018 Supply volume Average price Source: Knight Frank Research, 2019 with finishes, which is up three percentage Primary market supply structure points on an annual basis. At the same time only 1% of supply is offered as white 0 0100 10010 10200 200 box and 2% of supply is available with finishes as an additional option. 100 21 9.7% 0 00 00 The launch of multiple new projects caused 100–10 2 2 80 10 0 changes in the structure of distribution of supply by district. Now, 40% of all flats and 10–200 00 5.4% 6.9% 2 21 apartments that are currently listed on the 200–20 00 01 0 2 20 high-end new-build residential property 20 00 00 01 market are located in three districts, and 02 3.5% namely: Source: Knight Frank Research, 2019 Tverskoy (14%); Khamovniki (13%); Supply based on their area Zamoskvorechye (12%). 3%1 Tverskoy district crowned the Top-3 with its 14%. Four new properties were launched 8 11 1 10 8 It is interesting to know that the volume Premium E of new supply had been gradually 100 2 growing since 2010 until it reached 37% 10010 10200 39% its peak value in 2013. Thus, 15 new 20020 residential complexes were launched 20 to the market in 2013 (1,562 flats and apartments). The pace of new Source: Knight Frank Research, 2019 delivery then slowed down in 2014 when the sales were launched in 11 new properties embracing Supply based on their price 853 lots in January through to December. In 2015, there were another 2 2 11 properties containing 544 lots, new 5% 7% to the market, which was similar to the 1 figures of 2008/2009 financial crisis years. The supply grew by 745 and 44% 34% 439 corresponding lots back then. The Premium 12 E sales were launched in 11 more new 0 45% properties in 2016 (742 lots), 15 more 0100 10010 new properties in 2017 (1,393 lots), 0 10200 and, finally, 21 new properties in 2018 200 (915 flats and apartments). Source: Knight Frank Research, 2019 3 PRIME RESIDENTIAL REAL ESTATE MARKET. MOSCOW Share and average price of supply by district Marina Roshcha Tverskoy S Izmajlovo Begovoy Meshhanskij 2 mln 1 10 mln Khoroshevskiy 4 56 ₽ Krasnosel'skij ₽ 1 1 Chistye prudy Sokolinaja Gora Presnensky 8 5 2 1 ₽ 9 mln 8% 57 mln 6 Basmannyj ₽ 7 Patriarshie prudy Krylatskoe 11 1 363 mln A ₽ Lefortovo 9 Perovo 8% 11 mln Tagansky ₽ Filevskiy Park 7% 111 mln Ostozhenka–Prechistenka 1 ₽ Dorogomilovo 2 ₽ 20 mln Zamoskvorechye 3 12 9 mln Plyuschikha Nizhegorodskij₽ Fili-Davydkovo 12 10 Yakimanka 8% ₽ 10 mln Ryazanskiy 12 86 mln Juzhnoportovyj ₽ R Danilovskiy 9 ₽ 90 mln Tekstil'shhiki Share Average Kuz'minki Gagarinskiy in the total supply price Khamovniki 9 1 100 mln ₽ 76 mln Ochakovo-Matveevskoe ₽ Akademicheskiy > 200 mln rub. Other 100–200 mln rub. < 100 mln rub. 3% ⸺ Nagatinskij Zaton ₽ Lomonosovski Kotlovka Nagatino-Sadovniki Ljublino Source: Knight Frank Research, 2019 Primary market supply in different construction stages 21 22 1 1 29 C Facade Fit-out A works works delivered Source: Knight Frank Research, 2019 to the market over the past 12 months buying activity along with an array of large 106 sq m, while the figure for elite properties in this location. Zamoskvorechye district lots in some new properties caused a shift has grown by 4% amounting to 156 sq m by moved down from the second line to the towards larger and more expensive lots. the end of the year. third one yielding to Khamovniki district, For instance, at Cameo, the buyers are The average lot value of the flats and which dropped out of the Top-3 in 2017 offered villas of 230+ sq m, while there apartments available for sale in premium due to the numerous sales in this location are townhouses and mansions of 350+ sq segment grew up to 63 million rubles in as well as massive new launches throughout m available at one of the properties with 2018 (+7% yoy), while the elite segment the market. private sales. recorded an even greater pace, with the The structure of supply underwent certain Thus, the average lot area in premium average lot value having increased by 13% to changes over the past year, both in premium class new-builds hasn’t changed over the 155 million rubles. and elite segments, where the high-level past 12 months of 2018 amounting to 4 2018 RESEARCH Complexes where sales started in 2018 Property Property Number Market Address Segment Developer Fit out Commission name type of lots launch 10, Elektrichesky Prioritet February 1 Edison House Lane., bld. 1 premium investment apartments 12 Fitted out Q1 2019 2018 (Presnensky) company 2, 1st Tverskaya- Fairmont Ves- October 2 Yamskaya St. elite Vesper apartments 36 Fitted out Q2 2019 per Residences 2018 (Tverskoy) 9, Usacheva St. Magnum Without fit 3 Magnum premium apartments 44 April 2018 Q3 2020 (Khamovniki) Development out 4, Palikha St., February Without fit 4 Maison Rouge premium MR Group apartments 34 Q3 2019 (Tverskoy) 2018 out Manor (Residences 10-12, Sadovaya- Without fit 5 on Sadovaya- Sukharevskaya St. premium MR Group flats 7 April 2018 Q1 2019 out Sukherevs- (Sretenka) kaya) 43, Pokrovka St., Novem- 6 Quartet House bld. 8 (Chistiye premium – apartments 4 – Q3 2019 ber 2018 Prudy) 13-15, B. Kozihin- Invest-stroycom January Without fit 7 Bakst sky Lane, bld. 1, 2 elite flats 18 Q1 2019 company, Ltd. 2018 out (Patriarshie prudy) 5-7, Sredniy Dom na October Without fit 8 Tishinskiy Lane premium Donstroy flats 143 Q3 2020 Tishinke 2018 out (Presnensky) VMC 7, Solyanka St., Decem- 9 Atlant House elite Development, apartments 19 Fitted out Q2 2020 bld. 1 (Tagansky) ber 2018 Ltd. Fitted out / 14, Donskaya St., Novem- 10 Medniy premium Capital Group flats 134 Without fit Q1 2020 bld. 1 (Yakimanka) ber 2018 out 25, Novinsky Bvd., 11 Narkomfin premium Liga Prav, Ltd. flats 46 April 2018 Fitted out Q3 2019 bld. 1 (Presnensky) Elbert Pirogovskaya, 14. Pirogovskaya Septem- 12 elite Development apartments 53 Fitted out Q1 2021 14 St. (Khamovniki) ber 2018 Group 1, Tamanskaya St., October Without fit 13 BOR bld. 3 (Khoroshe- premium Spetssportproekt apartments 50 Q3 2019 2018 out vo-Mnevniki) 28, Kosmodamian- Without fit 14 Somelier skaya Emb., bld. 1 premium Real-avto, Ltd.