"Q1 2010 is over and the real estate market has got over its worst period; positive trends and some revival of the real estate market are already seen. Current situation still makes owners to be flexible and client-oriented, make concessions: reduce security deposits, advance payments and indexations on transacting, extend lease vacation, divide large premises into smaller ones, make fit-out and even increase brokers' fees," says Kirill Popov Executive Director Cushman & Wakefield.
"On the other hand on restructuring and consolidating their business and assets tenants begin to look for new office options. Supply still exceeds the demand, therefore, there is an opportunity to choose more comfortable and attractive office, increase or reduce its area, unit several offices into one for cost optimizing even if removal is necessary. The financial market is also recovering. This process is quite slow but has positive trends. Cash position has improved significantly. MIPIM became event of the month which showed that many investors are getting interested in Russian market once again and are taking advantage of current situation to enter it in order to make a profit in several years," Kirill Popov continues.
Key trends from Cushman & Wakefield's Office Market Snapshot Moscow, March 2010:
* The beginning of 2010 is marked by a revival in the market in comparison with the second half of 2009. So about 360 thousand m² were built in Q1 2010 including 75 thousand m² built in March.
* The total amount of office premises leased and bought in March 2010 was quite high and comparable to the take-up during the construction boom in 2007-2008. During last month quite a few deals in such business centers as Horizont, Nastas'insky lane 7, Business Park Greenwood and etc. were executed.
* Asking rental rates for class A offices in Prime submarkets is gradually increasing (e.g. Voentorg, Legion I, Znamenka Project etc.) but only in several buildings. So asking rental rates are stable in general and still are decreasing in some buildings.
Source: Cushman & Wakefield