The cost of renting offices and shops is slowly growing

The growth in traffic and potential tenants’ interest in shopping centers inspires cautious optimism among developers: they are gradually bringing previously postponed projects to the market. Although there is no talk of starting new ones yet, the slow increase in rates does not compensate for the decrease in construction profitability due to increased prices for loans. A similar trend can be seen in the street retail segment, where the dynamics of rental prices mainly reflects the inflationary process. In the office markets of Moscow and St. Petersburg, prices are also stagnating.

The Mall Index (reflects the number of visitors per 1 thousand sq. m of retail space) in Russia in the period February 1–18 increased by 3% year-on-year, in Moscow – by 4%, in St. Petersburg – by 3%, they calculated at Focus Technologies. The gap with the pre-crisis 2019 was 21%, 24% and 24%, respectively. The gradual growth of consumer activity, according to Mikhail Vasiliev, head of research and consulting at Focus Technologies, is facilitated by the gradual opening of new stores in previously empty areas, which increases the attractiveness of large facilities in particular.

Trade recovery

Nikoliers partner Anna Nikandrova recalls that this year in Russia as a whole it is planned to commission 661.2 thousand sq. m. m of retail space, of which 39% are in regional markets. In general, the positive dynamics, according to her, are due to positive signals for the market: “In 2023, the situation stabilized, we noted a decrease in vacancies.” Guided by these considerations, developers decided to complete previously started but postponed projects. Although the expert does not hide the fact that a significant part of the facilities will eventually be moved to the beginning of 2025.

Ms. Nikandrova does not expect a mass entry of new projects into the market due to the high cost of borrowed funds. “An increase in rental rates is observed, but does not correspond to the increase in construction and management costs; profitability is declining,” she argues. The filling of space, according to the expert’s observations, is largely due to an increase in the space of fitness clubs as part of shopping centers, the opening of new entertainment concepts, and stores of Russian brands.

According to Yandex Real Estate calculations, the median cost of selling retail premises in Moscow now it is 322 thousand rubles. per sq. m, in St. Petersburg — 244 thousand rubles. per sq. m. Over the year, these values ​​increased by 10.7% and 9%, respectively.

Street balance

In the street retail segment, the beginning of the year, according to Irina Kozina, director of street retail at NF Group, turned out to be active: the number of rental requests was higher than a year earlier, both in Moscow and St. Petersburg. According to the expert, the bulk of openings are formed by catering establishments (occupying 31.9% of the space) and fashion retailers (12.4%). According to her forecasts, vacancy in the segment will continue to decline.

The increase in the number of requests from potential tenants was also noticed by SimpleEstate CEO Nikita Kornienko, pointing out that companies that had previously paused their development are now returning to it. At the same time, the expert draws attention to the growth in supply: a large number of new buildings are being built in residential areas, where on the ground floors there are commercial spaces rented by both chain and non-chain players. These processes equalize each other and vacancy, according to Mr. Kornienko, will ultimately remain at approximately 10%. Rates in the center of Moscow now reach 5-10 thousand rubles. per sq. m per month, in New Moscow – they rather vary in the range of 2–3 thousand rubles. per sq. m.

“Prices are gradually rising under the pressure of inflation and active demand from tenants,” says the expert. The trend, according to his forecasts, will continue.

According to Yandex Real Estate calculations, rental of retail space in Moscow on average costs 3 thousand rubles. per sq. m per month, in St. Petersburg – 1.6 thousand rubles. per sq. m. Growth year on year – by 1.4% and 5.1%, respectively. At the same time, the exposition of retail premises in Moscow increased by 18.2% over the year, in St. Petersburg — decreased by 27.2%.

Office stagnation

At the Moscow office market The volume of transactions in January, according to estimates by Irina Khoroshilova, head of the office real estate department at CORE.XP, amounted to 226 thousand sq. m. m, increasing year-on-year by 62%. Based on the results of the entire first quarter, the positive dynamics, according to expert forecasts, will continue: the main demand for premises is now generated by government agencies and companies in the construction sector.

The average rental rates on the Moscow office market, according to Ms. Khoroshilova, are 36 thousand rubles. per sq. m per year in the case of class A objects and 23 thousand rubles. per sq. m – class B. Over the year, indicators may increase by an average of 3.5% under the influence of inflationary processes, she warns. The share of vacant space, according to expert forecasts, will decrease due to low development activity: in total, 209 thousand sq. m were announced to be commissioned in Moscow in the first quarter. m, 44% of which have already been implemented. Nikoliers assumes that in total in Moscow this year developers will deliver 636 thousand square meters. m with the declared 848 thousand sq. m. m. Against this background, vacancy will decrease by 0.3 percentage points, to 6.3%.

In St. Petersburg, according to Nikoliers calculations, the average cost of renting class A offices is 1.7 thousand rubles. per sq. m per month, class B – 1.2 thousand rubles. Analysts expect these indicators to grow due to the emerging shortage of high-quality space in the market. The commissioning of new space in the city remains at a low level, and many leased properties are rented out even before they are put into operation, consultants explain. Because of this, it is difficult to find blocks larger than 5 thousand square meters. m in the market is not easy.

Alexandra Mertsalova