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Russia
With an invested stock of EUR144bn, Russia is
the eighth largest market in Europe. Given the
size of the market its total stock is estimated to
be over EUR900bn. The Russian market has not
been impacted by the financial crisis, with its
stock continuing to grow year-on-year, and has
more than doubled over the last five years.
Market activity has been dynamic, even during the
crisis, and recorded one of its strongest levels of
activity in 2013, which saw some trophy assets sales
in both the office and retail markets, often due to
international capital. However the political situation
and the crisis in Ukraine have heavily impacted the
volume in 2014, keeping investors away from the
market.
Private property funds and rich private investors
dominated the commercial real estate equity market,
whilst commercial banks are the main debt providers.
Moscow sits alongside other global cities such
as New York, London, Paris, Shanghai and Tokyo.
It is therefore not surprising that the majority of
investment activity is focussed on Moscow, largely
due to the size of its office stock (16 million sq m at
the end of 2014).
Quality shopping centres with high-standard
concepts and tenant mixes are going to appear in
Moscow. This is likely to stimulate investors’ appetite
for this new kind of asset.
Despite a subdued economic outlook for the Russian
economy, institutional investors have not hold back
on acquisitions in this country.
Market sizing
Russia
Europe
Invested stock
(Total stock)
EUR 144bn
(EUR 904bn)
EUR 3,335bn
(EUR 8,201bn)
Liquidity ratio
(10y average)
0.6%
(4.4%)
5.6%
(4.6%)
2014 volumes
(10y average)
EUR 0.8bn
(EUR 2.9bn)
EUR 187bn
(EUR 142bn)
Market pricing –Moscow (Q4 2014)
Office
Retail
Industrial
Current Yield
9.75% 10.00% 11.00%
Min/Max (10y)
8.00-13.00% 8.50-16.00% 10.00-15.00%
Yield definition
Net initial yield
Source: DTZ Research
Investment activity by source of capital, 2014
Investment activity by asset type, 2014
Source: DTZ Research
Source: DTZ Research
Domestic
Non-European
European
Office
Mixed Use
Retail
Industrial
Other
74%
26%
82%
18%
96 Investors Guide to Europe 2015