Retail and office real estate markets are stagnating

The gradual increase in traffic and low activity in terms of the opening of new facilities allow shopping centers in Moscow and St. Petersburg to count on a gradual decrease in vacancy. There has been a revival in the street retail segment, but high demand here is offset by the constant increase in supply due to new residential complexes. The shortage of quality space is felt only in the center. The office market is at a standstill: on the one hand, there remains a shortage of large blocks, on the other hand, in the absence of a pronounced increase in rental rates, developers have no motivation to start new projects.

Trade Stability

The Mall Index (reflects the number of visitors per 1 thousand sq. m of retail space) in Moscow in the week of March 11–17 increased by 4% year-on-year, in St. Petersburg by 1%, Focus Technologies calculated. The indicators of both cities lag behind the values ​​of 2022 by 2%. Analysts recall that two years ago, during this period, attendance at sites was considered high: many were eager to make purchases, fearing a shortage of goods due to announcements of sanctions and the departure of some foreign brands from Russia. Based on this, the current trend in the market as a whole can be considered positive.

Regional director of the retail real estate department of NF Group, Evgenia Khakberdieva, says that the situation on the Moscow retail real estate market remains stable: in the first two and a half months, only one object was opened – the Liner shopping center. Although this start cannot be called full-fledged: only one operator began working in the facility – the DDX Fitness club. Based on this, the expert does not expect an increase in the share of vacant space based on the results of the first quarter. But the decrease, according to her, will be insignificant – less than one percentage point. A more noticeable reduction in the share of empty space will be noticeable only in the second half of the year, Ms. Khakberdieva believes.

Director of the Brokerage Department at RRG Svetlana Yarova believes that in the most successful shopping centers, 5-6% of the space is now empty, although in problematic facilities the figure may be noticeably higher. Sales Director of the premium real estate agency Point Estate Roman Amelin says that rental rates vary greatly, but on average in Moscow they are 50-80 thousand rubles. per sq. m per year.

Street Gain

At the same time, in the street retail market, according to the head of the street retail department of the Magazin Magazin company, Marina Markova, there is a shortage of quality objects in central locations: demand now exceeds supply. This allows owners, in some cases, to increase prices for sought-after properties. A similar trend can be seen in St. Petersburg, where, according to Nikoliers calculations, the average vacancy rate in central shopping corridors is now 5.3%. The least vacant premises are on Nevsky Prospekt – 3.6%.

According to Ms. Markova, tenants of the usual profile remain active: clothing showrooms, catering, groceries, alcohol markets, pharmacies and banks.

According to calculations by Yandex Real Estate, the number of views of advertisements for the sale of commercial properties in Moscow in February increased by 21% year-on-year in February, and for rental advertisements by 23%. In St. Petersburg, the dynamics were 30% and 36%, respectively.

But SimpleEstate CEO Nikita Kornienko suggests that the average vacancy level will not change, amounting to about 10% in Moscow at the end of the first quarter. “The process is balanced by high demand from tenants, on the one hand, and the active commissioning of new residential complexes, on the other,” he says. Mr. Kornienko says that end users continue to form a relatively small share of transactions – about 10%, while the rest of street retail properties are acquired by investors who subsequently rent them out. According to his observations, high demand for rental premises on the outskirts continues to be formed by pharmacies, supermarkets, alcohol markets, flowers, distribution points and cafes. In Moscow, according to SimpleEstate calculations, rental rates now vary from 1.5 thousand to 3 thousand rubles. for 1 sq. m per month. Analysts do not see any prerequisites for a pronounced correction of indicators.

Discreet takeover

In the Moscow office market, vacancy in the first quarter was 6.5%, decreasing by 0.5 percentage points for the quarter and by 3.5 percentage points for the year, says Irina Khoroshilova, head of the office real estate department at CORE.XP. In the second and third quarters, according to her forecast, the indicator will begin to grow, reaching 7.6%. This will be due to the release of part of the space and its restrained absorption due to the slowdown in economic growth against the backdrop of a high key rate. According to Ms. Khoroshilova, government organizations, companies from the real estate and construction sectors, and industrial structures remain active in the market.

Director of the CORE.XP branch in St. Petersburg, Oleg Dmitriev, says that in the city, against the background of low development activity, there is a lack of liquid space: companies that want to find a high-quality office with an area of ​​more than 1.5–2 thousand square meters. m, they don’t always find suitable options.

According to him, there are no more vacant offices of foreign companies that have left Russia.

Yandex Real Estate notes that the number of views of office rental advertisements in St. Petersburg in February increased by 55% year-on-year. The median cost of space in the city was 1.4 thousand rubles. for 1 sq. m per month, increasing by 5.4% year on year.

In Moscow, according to CORE.XP, office rent now costs an average of 25.7 thousand rubles. for class A premises, 19.8 thousand rubles for class B premises. By the end of the year, the figures may increase by 3–4%. Victoria Guseva, director of leasing for the Nikoliers office real estate department, also expects a slight increase in average indicators. “The dynamics are affected by the washout of inexpensive quality offers, the market correction of rates against the backdrop of limited supply, the need for the investor to ensure the return on investment of the acquired asset by increasing rental rates,” she argues.

Alexandra Mertsalova