Russia
REAL ESTATE
•
In Moscow, office prime rents have decreased by 10% over the
previous two quarters; landlords are offering tenants greater
incentives such as extended rent free periods and stepped
rents, or will undertake the tenant’s fit-out works
•
In Moscow, most landlords are still quoting rents in U.S. Dollars
or Euros, exclusive of VAT and operating expenses; however,
in regional cities such as St. Petersburg, rents are quoted in
Rubles, usually including VAT and operating expenses
•
For grade A buildings, the floor area is usually measured in
accordance with BOMA standards, whereas grade B buildings
use the local BTI standards; the latter does not include a
common area ‘add-on’ factor, which can reduce the rent by
15-20%
•
There is no market standard for the annual rent increase; it
can be linked to U.S. CPI, Russian inflation or an agreed fixed
increase
•
Offices in suburban locations will usually require a longer
notice period for tenants to exercise renewal or termination
rights; the leases will often have an automatic renewal clause
should the tenant not serve any notice.
OPERATIONAL
•
Tenants are not required to reinstate the leased premises
to its original condition, but will need to leave any tenant-
installed fixtures in-situ
•
For any fit-out works, the tenant will need to obtain all the
necessary permits from the relevant authorities, provide a
scope of works and a layout plan
•
Any alterations to the premises, however minor, will require
the landlord’s consent; structural alterations are not
permitted.
LEGISLATIVE
•
All leases with terms of more than 12 months are subject to
state registration; the legal and registration fee is typically
shared between the tenant and the landlord
•
There are no standard leases or lease templates — each
landlord will draft their own; the governing law and prevailing
language (in case of dual language leases) will be Russian
•
Sub-leases do not offer the same legal protection as leases
granted directly from the landlord; the extent of the sub-
tenant’s rights should be clarified before any agreement is
reached
•
Property and land taxes are usually included in either the
base rent or the operating expenses, but the landlord should
confirm this during lease negotiations
•
While landlords are obligated to take out building insurance,
tenants should maintain their own third party liability
insurance.
YURI YUDAKOV
Head of Occupier Services, Russia
+7 916 888 0016
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