Demand for offices in Moscow hit a record in the first half of the year

Office centers in Moscow began to fill up after the departure of Western companies. According to the results of January-June 2023, the volume of transactions for the lease and purchase of premises increased by 62% year-on-year, to 915 thousand square meters. m, which was a record for the first half of the year. Basically, the demand was formed by the IT sector and government agencies. With the closing of a number of large transactions, the office market may renew the record by the end of the year.

In January-June 2023, the volume of transactions for new lease and purchase and sale of office space in Moscow increased by 62% year-on-year, to 915 thousand sq. m. m, calculated in CORE.XP. According to consultants, the result was a record for the first half of the year in the history of observations. Commonwealth Partnership says that demand grew by 19% yoy, NF Group recorded demand growth by 1.5 times, without giving absolute figures.

A significant contribution to the demand for offices was made by purchase and sale transactions, the volume of which almost doubled year-on-year, to 236,000 sq. m. m, specified in CORE.XP. Thus, unnamed companies purchased 47 thousand square meters. m in the iCity complex under construction and 13.3 thousand sq. m. m in the Oko tower in Moscow City. Another 30 thousand square meters. m in the business center SkyLight bought VK, and the developer of information and automated systems “RusBITeh” acquired 22.25 thousand square meters. m in Ostankino Business Park.

Now buyers are ready to purchase space both in projects under construction that are close to completion, and in buildings with a completion date of 2025–2027, says Kristina Nedrya, director of commercial management at Stone. According to her, there is interest not only from investors, but also from businesses, for placing their own office. CODE General Director Gurgen Shekoyan confirms that the demand for the purchase of office space from end users has grown, although last year the purchase of such space “was of little interest to anyone.” Buying an office property has become an attractive investment, confirms Andrei Kukhar, director of the office real estate sales department at Nikoliers.

The volume of new lease transactions in January-June increased by 56% yoy to 679 thousand sq. m. m, also updating the record, calculated in CORE.XP. Maria Zimina, director of the office real estate department at NF Group, notes that foreign companies have left a large number of offices. According to the commercial director of O1 Properties Pavel Barbashev, in the first half of 2023, she rented out more than 30 thousand square meters. m is about 90% of the indicators of the entire 2022. Space 1 commercial director Maria Kabanova says the number of new tenant deals since the beginning of this year is comparable to the figures for all of 2022. Irina Khoroshilova, head of the CORE.XP office real estate department, says that the expansion of Russian business also affects the office market. According to the company, in the first half of 2023, the volume of transactions to expand existing offices reached about 20 thousand square meters. m against only 1 thousand square meters. m a year earlier.

Pavel Barbashev notes changes in the portrait of the tenant. According to him, Russian companies account for more than 80% of new transactions, but representatives of Chinese business are also active. Deputy Director of Ricci | Offices” Anton Gryaznov says that the leading position in terms of demand is occupied by companies in the IT sector and the telecom industry, which account for about 25% of all new lease transactions. Last year, the consultant points out, companies in this segment were among those who actively refused office space, and in the share of new transactions they occupied only 9%. In addition, this year, production companies and government agencies generated significant demand, providing in each case 14% of all lease transactions, as well as the banking sector, which accounted for 10%, Mr. Gryaznov added.

The previous annual record for the volume of office transactions in Moscow was in 2019, when, according to CORE.XP (then CBRE), 1.8 million sq. m of space. Irina Khoroshilova expects that this year the figure could reach about 1.5 million square meters. m. When closing large transactions, which are now at the negotiation stage, 1.9 million sq. m. will be commissioned and sold. m of offices, calculated the director of the research and analytics department of the Commonwealth Partnership Polina Afanasyeva.

Daria Andrianova