Colliers International, a global real estate consultancy company, has prepared a EMEA region office real estate review. During the survey, the following aspects of the office property market were considered: volume of construction, rental rates, vacancy, and capitalization rates.
The survey results show that Moscow is the leader in terms of office construction over the next two years. As of now, the total area of office properties being developed in the Russian capital amounts to 2.8 mln m². The runner-up is Dubai with 2.6 mln m². The capitals of the United Arab Emirates and Saudi Arabia Abu Dhabi and Riyadh are third and fourth, respectively, with 1.2 and 1.0 mln m². All in all, the highest volume of offices under construction was recorded in the Middle East.
St Petersburg came seventh in terms of office development scale: currently, 636.9 thousand m² of office space are under construction in the "northern capital". Cities comparable in development scale to St Petersburg include Brussels (Belgium), Sofia (Bulgaria), and Paris (France). In each of these cities, about 600700 thousand m² of office properties are being built.
London ranked 11th in the rating: the total area of office properties under construction in the City and the West End currently amounts to approximately 350 thousand m². Comparable development scale is observed in Hamburg (Germany), Madrid (Spain), Amsterdam (the Netherlands), and Zurich (Switzerland): approximately 300350 thousand m² in each city.
The lowest development scale in Europe was recorded in Glasgow (UK) about 2.8 thousand m². It should be noted that, apart from London, large UK cities demonstrate a rather small scale of office development. In Belfast and Bristol, for example, this indicator is at 2024 thousand m². Meanwhile, in Edinburgh, Manchester and Birmingham no office properties at all are being built at the moment.
Olga Pobukovskaya, Director, Office Property Department, Colliers International: "In terms of quality, many office properties in Moscow lag behind other global capitals. However, at this stage, the projects that will be completed within the next two years are becoming higher quality and more professionally built. We are currently observing a certain surge in tenant activity they have grown more conscious of the quality and status of an office property. Development of the economy and the companies' business will influence the amount of required office space of a brand new level. The annual EXPO REAL 2010 international commercial property exhibition, which took place in Munich recently, confirmed yet again that Moscow remains an attractive region for foreign developers. At the Russian capital's exhibition stand, about 15 large-scale development projects were represented, and investment into these projects will amount to several billion US dollars."