The departure of Western companies caused an increase in transactions in the commercial real estate segment

The accelerated sale by Western companies of assets in the Russian commercial real estate market led to a revision by consultants of their forecasts for the volume of investments in this segment in 2023. Now they expect that the total amount of transactions may exceed 400 billion rubles, which is significantly more than the initial expectations and twice the pre-crisis values. In the future, such records are unlikely, experts say. In subsequent years, buyers of the assets of foreign companies leaving Russia will try to resell them.

The volume of investments in commercial real estate in Russia in 2023 may reach 350-400 billion rubles, exceeding the indicator of the previous year (240 billion rubles) by 46-67%, CMWP expects. The forecast was revised after good results in the first half of the year: initially, consultants expected investments at the level of 300 billion rubles. But this figure will be reached ahead of schedule, in the first six months the volume of transactions amounted to 207 billion rubles, which is twice as high as in the same period of 2020-2021.

Analysts do not provide data for the first half of 2022 due to the collapse in business activity after the outbreak of hostilities in Ukraine. Irina Ushakova, Head of Investments and Capital Markets at CORE.XP, estimates the volume of investments in commercial real estate for the first half of the year at 259 billion rubles, an increase of 169% year-on-year.

IBC Real Estate also revised its investment forecast for this year – from 400-420 billion rubles. up to 580-600 billion rubles. (including purchases of sites for housing construction). This promises to be a historic record. In January-June, the initial plan was fulfilled by 90% due to the growth in the number of transactions and their high cost, says Mikael Ghazaryan, Head of Capital Markets and Investments at IBC Real Estate.

Investor interest is concentrated on the segments of retail and office real estate affected by the crisis. Their share in the total volume of investments in the first half of the year amounted to 48% and 22%, respectively, says Ms. Ushakova. Alan Baloev, Head of Capital Markets at CMWP, explains that the speculative construction of retail and office space today is generally less attractive than the purchase of ready-made assets.

Among the key deals with shopping centers, Denis Platov, director of the capital markets department at Nikoliers, cites the sale of Atrium European Real Estate to the Ramo-Park holding of seven Park Houses, Metropolis by American Hines and Morgan Stanley, and Nevsky Center by the Czech PPF Group. In the office segment, many companies are now acquiring assets for their own needs, he adds. Director of the Center for Economic Forecasting of Gazprombank Vladislav Fadeev notes that the situation in the commercial real estate markets in terms of vacancy growth is generally better than expected – this has allowed buyers to be more optimistic about the market prospects.

But this year’s investment results, according to the head of marketing and analytics at Asterus Denis Bobkov, will become a “short-term extreme” and in the future the figure will be fixed at the level of the usual 200-300 billion rubles. in year. Now a significant part of the transactions are carried out with the assets of foreign companies leaving the Russian market – in the first half of the year, their share, according to CORE.XP, accounted for 44%. As the remaining objects are sold, the volume will obviously decrease. Irina Ushakova estimates the remaining portfolio of Western companies in Russia at about 500 billion rubles. Transactions with the remaining objects of foreign companies may be delayed due to the complication of the approval procedure by the legal commission for the control of foreign investments, warns Denis Platov.

In the future, market drivers, according to Mr. Fadeev, will be transactions with the sale of assets profitably acquired in 2022–2023. Alan Baloev also expects that in two to four years, part of the assets sold today may again enter the market.

Alexandra Mertsalova