Private investors entered the office
The volume of transactions with office space up to 1 thousand square meters. m at the end of January-September 2024 increased by 45% year on year. Investments in such premises account for a third of the total investment in Moscow business centers. Small assets are acquired mainly by private individuals looking for alternative investment instruments. Developers, trying to quickly sell such real estate, promise high profitability, but in reality it is not easy to rent it out to unprofessional owners.
Based on the results of three quarters of 2024, the volume of transactions with offices with an average area of up to 1 thousand square meters. m in Moscow grew by 45% year-on-year, the consulting company CORE.XP told Kommersant. The total amount of sales of such lots to private investors during the period under review reached 32.5 billion rubles, or 30% of the total investment in the office segment of the Russian capital.
The growth in demand for small offices is associated with an increase in the activity of private investors, states Elena Malinovskaya, director of leasing at Millhouse (owner of a number of large business centers in Moscow). The share of such buyers now reaches 40–50%, says Anton Konobeevsky, sales director of the development company Dominanta. According to him, before the abolition of mass preferential mortgages, private investors preferred to invest in new residential buildings.
Now, for private investors, small office space, according to Alexandra Zakharova, director of commercial real estate at Level Group, “is a protective tool against inflation.” Such compact spaces are usually rented by companies to house their representative offices and branches, explains Nellya Imametdinova, sales director of the consulting company Praedium.
The developer Tekta Group notes that there is now great demand from private investors for offices ranging from 50 to 200 square meters. m, which is comparable in price to apartments in the middle price segment. When purchasing premises in a business center at the stage of its construction, the increase in its value by the time of commissioning can reach 30–40%, notes Anton Konobeevsky. The Tekta Group adds that the profitability of apartments is 5–6% per annum, of offices – 10–12%.
In addition, small areas are purchased for their own purposes by companies that are faced with a shortage of available space for rent, notes Irina Khoroshilova, head of the office real estate department at CORE.XP. Demand is generated by representatives of small and medium-sized businesses, adds Kristina Nedrya, director of commercial management at the development company Stone. However, according to her, the largest number of transactions among end users of premises in Moscow business centers are for the purchase of areas of 5 thousand square meters. m.
However, recently many such transactions have been postponed, which is due to an increase in the key rate, notes Dmitry Klapsha, CEO of the consulting company Remain. The expert adds that large companies are now more often choosing to rent offices instead of buying them.
At the same time, non-professional private investors purchasing compact office space may have difficulties renting out such real estate, warns Ekaterina Petrova, director of analytics and marketing concepts at the Pioneer development group. Such investors have problems, among other things, due to the fact that space is purchased in an unclaimed location with poor transport accessibility, explains Ekaterina Belova, head of the office space department at IBC Real Estate. However, she predicts that in the coming year the demand for this format of investment from private investors will continue. At the same time, as Alexandra Zakharova notes, the shortage of space in quality business centers in Moscow will only increase.
