According to Q1 2018 preliminary results, real estate investment volume in Russia has totalled €121.6m ($150m), 4.7 times lower than in Q1 2017. For year-beginning low transactions, conversion is typical, especially after high conversion level of Q4 2017. Furthermore, investors sentiment was moderate in terms of decision making before March President elections typically resulting in market volatility.
95% of Q1 2018 investment volume stems from the overseas capital. In comparison, 22% of transactions in Q1 2017 were local investments.
Residential real estate investment has totalled €58 ($71,5m). Office segment share according to preliminary results amounts to 34%, retail sector - 12%, with the industrial real estate approximating 7%.
Due to a number of residential acquisitions, St. Petersburg share in the total volume currently totals 55%. Moscow region transactions have amounted to 24% and regional markets approximate 21%. CBRE expects Moscow share to grow to 70%.
Prime office yields in Moscow in Q1 2018 were 9 - 9.75%, prime shopping centres 9 - 9.75% and logistics centres 11.50 - 12.00%.
Irina Ushakova, Senior Director, Head of Capital Markets Department, CBRE in Russia, commented: “The beginning of the year typically displays lower volume of investment transactions. Russian economy, as well as real estate market in Moscow and St. Petersburg, in particular, see a steady recovery. Local and overseas investors interest and the volume of transactions at negotiations stage gives grounds to expect that last year's volume of investments in real estate will exceed the results of 2017.”
