RESEARCH 2019 PRIME RESIDENTIAL REAL ESTATE MARKET Moscow KEY FINDINGS A solid growth in the supply with final finishes The average weighted price grew The cumulative value of the transactions was supported by the growing demand for up to 809,000 rubles per sq m (+3% yoy). exceeded 100 bln rubles having reached record ready-to-move-into units. Each third sold unit figures over the past five years. was finished. PRIME RESIDENTIAL REAL ESTATE MARKET. MOSCOW prime Residential real estate market Supply As of 2019, the total new-build supply are listed for sale in the elite segment Andrey Solovyev in the high-end residential real estate (-6% yoy), while there are about 1,830 Director of City Sale Department, market amounted to 2,600 units, which units in the premium class (+36% yoy). Knight Frank is 20% more than a year ago. As for the This is due to that it was mostly club performance within the segments, there is format properties that contributed to the a variety of trends. Thus, about 780 units growth in supply in the elite market, “We will keep the old year in our memories thanks to the bright events in the high-end residential real estate Key indicators. Dynamics market of Moscow. Thus, some new Supply large-scale properties with developed Elite Premium Dynamics* Dynamics* infrastructure are currently getting segment segment ready to be launched, along with Total supply, pcs. 780 -6% 1,830 36% some smaller ‘boutique’ ones that are Average price, thousand located downtown. The government 1,156 16% 608 1% control is getting stronger, the system rub./sq m of bank financing via escrow accounts Average area, sq m 151 -3% 111 5% has started functioning. We see a Average price, mln rub. 175 13% 68 7% strong buyer activity in the premium Elite Premium segment as well as the structure Dynamics** Dynamics** segment segment changes to the development market, with the developers searching for new Demand land plots, the companies getting Total supply, pcs. 320 15% 850 5% bigger, and smaller players leaving the Average price, thousand 973 20% 562 3% market. Only high-level professionals rub./sq m with strong teams and a profound Average area, sq m 166 12% 104 5% understanding of the market are set to stay. Average price, mln rub. 162 35% 58 8% * Q4 2019 / Q4 2018 The market capacity remains at the ** 2019 / 2018 same level, as has been the number of Source: Knight Frank Research, 2020 rich people in Russia for the past few years. The re-sales market contributes to the supply, but yields to the new- Supply structure by class Supply structure by property type builds market in terms of quality, which results in a drop in prices for the former. In its turn, the premium residential real estate market has completely shifted into the ruble zone, while the buyers require high-quality construction and finishes for a reasonable price. All in all, the market is looking for and finding its balance, as always.” 0 0 44% 56% E P Flats A Source: Knight Frank Research, 2020 Source: Knight Frank Research, 2020 2 2019 RESEARCH Share and average price of supply by district Сокол Аэропорт Щукино Савеловский Сокольники Преображенское Марьина Роща Tverskoy Setenka Измайлово Беговой Мещанский 2 mln 2Хорошево-Мневники2 mln Хорошевский ₽ ₽ Красносельский Presnensky Chistye prudy 16 2 Соколиная Гора 1% 117 mln 14% mln ₽ ₽ Басманный 4 8 5 Patriarshie prudy Abat 6 Крылатское 18 1% ₽ mln 9% ₽ mln Лефортово 9 Перово 11 Tagansky Ostozhenka–PrechistenkaФилевский Парк 2 17 0 5% 95 mln 4% 2 mln 15 ₽ 1 ₽ Dorogomilovo Zamoskvorech'e 13 7 17% mln 4% mln ₽ Нижегородский₽ Фили-Давыдково 3 Pluschikha Yakimanka Рязанский 7% 0 mln 19 7% 2 mln ₽ Южнопортовый ₽ Даниловский R Донской Khamovniki Текстильщики 8% ₽ 0 mln 8% ₽ 0 mln Кузьминки Гагаринский Other Очаково-Матвеевское1% 14 Share Average Академический in the total supply price 9% 76 mln Нагатинский Затон ₽ Ломоносовский Котловка Нагатино-Садовники > 200 mln rub. Люблино Проспект Вернадского 100–200 mln rub. < 100 mln rub. Нагорный Печатники Обручевский Source: Knight Frank Research, 2020 while for the premium segment, on the contrary, several large-scale properties of 500 to 600 units entered the market. For instance, the sales were launched in Lucky Residential Building by Vesper in Q1 2019, and Poklonnaya, 9 by ANT Development was launched in Q4 2019. Due to the same reason, the Top-3 districts leading by the number of supply changed their positions. Currently, 17% of all flats and apartments are listed in Dorogomilovo (the location of Poklonnaya, 9). Presnenskiy district came in second with its 14% (the location of Lucky). Tverskoy district, which used to top the ranking at the end of last year now takes up the third line, with 12% of all supply being situated here. Turgenev 3 PRIME RESIDENTIAL REAL ESTATE MARKET. MOSCOW The complexes with the sales launched in 2019 Property Number Launch Delivery Title Address Class Developer Finishes type of lots of sales date Ostozhenka St, 4, 6 March, 1 Allegoria Mosca elite Stroyteks apartments 57 No finish Q2 2021 (Ostozhenka) 2019 Arbat St., 39 February, 2 Artisan elite Valartis Group flats 30 No finish Q3 2019 (Arbat) 2019 Yefremova St, 9А January, 3 Eight Yards premium PST apartments 8 No finish Q1 2020 (Khamovniki) 2019 Zvenigorodskoe high- October, 4 Eleven premium RosStroyInvest flats 90 Final finish Q2 2021 way, 11 (Presnensky) 2019 Petrovka St., 26 Septem- Final finish/ 5 La Rue premium Capital Group apartments 106 Q2 2021 (Tverskoy) ber, 2019 No finish 2nd Zvenigiridskaya St, January, 6 Lucky prop 12, bldg 6 premium Vesper flats 654 Final finish Q4 2021 2019 (Presnensky) Savvin River Bolshoy Savvinskiy Ln, 4 Septem- 7 premium Gardteks flats 169 No finish Q1 2021 Residence (Plyuschikha) ber, 2019 Stoleshnikov Ln, 7 bldg 1 VMS- 8 Stoleshnikov 7 elite flats 12 May, 2019 Final finish Q4 2020 (Tverskoy) Development Noviy Arbat St, 15 January, 9 The Book premium Capital Group apartments 178 Final finish Q3 2019 (Arbat) 2019 The Residences Sofiyskaya Emb., 4, 10 Mandarin Ori- elite Capital Group flats 137 May, 2019 Final finish Q4 2020 bldg 1 (Yakimanka) ental Moscow Serebryanicheskaya Titul na Ser- flats, apart- Septem- 11 Emb, prop. 7–11 premium Tsentr Invest 175 No finish Q3 2020 ebryanicheskoy ments ber, 2019 (Taganskiy) Kostyansky Ln, 13 flats, apart- Decem- 12 Turgenev premium NeoStroy 169 Final finish Q4 2021 (Sretenka) ments ber, 2019 Poklonnaya St., 9 ANT October, 13 Poklonnaya, 9 premium apartments 475 Final finish Q4 2022 (Dorogomilovo) Development 2019 Lobachevskogo St, 114 June, 14 Reka premium Donstroy flats 115 No finish Q4 2021 (Ramenki) 2019 15 private sales Ostozhenka elite apartments No finish 16 private sales Presnensky premium flats n/a 17 private sales Arbat elite apartments No finish 18 private sales Chistye prudy elite flats White box New phases Vishneviy Sad Mosfilmovskaya St./ AB Develop- Novem- Final finish/ 19 premium flats 106 Q4 2021 (2nd phase) Kosygina St. (Ramenki) ment ber, 2019 No finish Source: Knight Frank Research, 2020 4 2019 RESEARCH Primary market supply structure 0 0100 10010 10200 200 100 2 8.3% 1 02 01 100–10 2 2 7.8% 1 10 10–200 00 5.7% 1 29 2 200–20 00 01 0 12 2 20 00 00 02 0 2 Source: Knight Frank Research, 2020 Over January to December 2019, the high- Supply share with finishing Demand share with finishing end residential real estate market grew by 18 new properties and one new phase. It 2019 2019 is worth mentioning that the format of private sales that was especially sought- 201 201 2 after in 2018 kept its popularity in 2019. 1 35% Thus, four out of 18 new properties are 53% being sold via private sales, which is 22% of all new high-end supply. A solid growth in the finished units is among the new trends of the market. Thus, 53% of such are currently found in Source: Knight Frank Research, 2020 the total supply (+22% yoy). The demand for finished flats and apartments follows Supply structure by the construction stage their growth in supply. Thus, each third unit sold was finished, while not more than 24% of all transaction volume shared this feature a year ago. Further on, the share of finished supply will continue growing, for a growing number of residential property buyers prefer this kind of units. 37% 19% 6% 3% 35% C A ks works works delivered Source: Knight Frank Research, 2020 Poklonnaya 9 5 PRIME RESIDENTIAL REAL ESTATE MARKET. MOSCOW Demand Primary market transactions structure As of 2019, about 1,170 transactions with 0 0100 10010 10200 200 flats and apartments were signed in the high-end residential real estate market, 100 2 7.5% 01 00 00 which is 8% more than a year ago. Their 100–10 4.7% 2 9 09 0 cumulative value amounted to more than 10–200 01 6.4% 5.8% 1 19 100 bln rubles and reached record high value over the past five years, breaking the 200–20 00 0 1 21 1 result of 2018 by 32% and that of 2017 – 20 00 00 01 0 3.6% by 53%. Source: Knight Frank Research, 2020 Positive performance is partially due to the growth in the popularity of highly priced Dynamics of the transactions total value, bln rubles units (200+ mln rubles) - twice as many transactions as compared to last year figure. The number of signed deals stood 102 at 86 in this price range in 2019, which was 7% of all sold flats and apartments (against 77 43 deals or 4% in 2018).