3. RUSSIA’S GDP IN 2013
MARKETBEAT
Q4 2013
2013 slowdown
GDP AND CPI
GDP GROWTH AND MAIN DRIVERS
8%
15%
10%
4%
5%
2%
0%
2005
2006
2007
2008
2009
2010
2011
2012
2013 F2014 F2015
ENERGY, GAS
AND WATER
-5%
PROCESSING
CARGO
TRANSPORTATIONS
FIXED
INVESTMENTS
MINING
AND EXTRACTION
PAID
SERVICES
RETAIL SALES
AGRICULTURAL
PRODUCTION
INDUSTRIAL
PRODUCTION
-2%
CONSUMER GOODS
AND OTHER SERVICES
2004
0%
TOTAL GDP
YoY change
6%
-10%
GDP growth, %
CPI YoY, %
• Economy was slowing down from Q2 to Q4 2013
• Ministry of Economic Development has reduced the forecast of Russia’s economy growth in 2013 from 3.4% to 1.8% in 2013
• The industrial production index is decreasing from the beginning of 2013
• The growth rate of mining and extraction was growing but at the same time the processing was falling down
• Retail sales remained the main driver of the economic recovery
CUSHMAN & WAKEFIELD
2
4. MACRO PERFORMANCE AND FORECASTS
ROSSTAT’S ACTUAL
2012
2013
MARKETBEAT
Q4 2013
MINISTRY OF ECONOMIC
DEVELOPMENT
2013
2014
2015
URALSIB CAPITAL
2013
2014
2015
RENAISSANCE CAPITAL
2013
2014
2015
GDP, %
3.4
1.2*
1.8
2.5
2.8
1.7
2.4
3.5
1.6
3.3
-
CPI, %
6.6
7.0
6.0
6.2
4.9
6.5
4.2
4.7
6.8
5.5
-
Industrial production, %
2.6
0.1
0.7
2.2
2.3
0.4
2.3
2.6
0.0
4.2
-
Retail Trade turnover, %
5.4
3.9
4.2
3.5
4.4
3.6
3.9
4.3
6.4
6.2
-
Fixed investments, %
6.6
-1.4
2.5
3.9
5.6
0.2
4.0
5.8
-0.2
3.8
-
Disposable income, %
4.2
3.6*
3.4
3.1
3.0
3.9
4.0
4.1
-
-
-
* January-September
• We expect 2014 to bring some optimism to the real estate market
• The retail sector will remain stable, fuelled by consumer growth
Source: Ministry for Economic Development, URALSIB Capital, Renaissance capital
CUSHMAN & WAKEFIELD
3
6. RUSSIAN INVESTMENT MARKET
MARKETBEAT
Q4 2013
INVESTMENT VOLUME IN 2010-2013
INVESTMENTS VOLUME 2013
Total investments into commercial real estate in
2013 was about $7.45 billion which is similar to the
volume of investments in 2012.
8,0
0,36
1,10
1,34
6,0
1,08
0,66
0,17
0,08
0,46
2,04
2,59
2,64
3,27
3,32
2,85
3,06
2010
billion USD
7,0
2011
2012
2013
Industrial
Other
5,0
4,0
3,0
2,0
1,0
1,40
Traditionally, the deals were closed in the biggest
cities. Moscow is an absolute leader by the amount
of investments and remains the investment center
of Russia. In 2013 about 70% of all investments
were attracted to Moscow.
0,0
Office
Retail
INVESTMENTS YOY % CHANGE AND SHARE
OF OFFICE AND RETAIL SEGMENTS
4,0
90%
3,5
80%
3,0
70%
2,5
60%
2,0
50%
40%
1,5
30%
1,0
20%
0,5
10%
2005
2006
Total investments
2007
2008
Office % of total
2009
Q4
Q3
Q2
Q1
Q4
Q3
Q2
Q1
Q4
Q3
Q2
Q1
Q4
Q3
Q2
Q1
Q4
Q3
Q2
Q1
Q4
Q3
0%
Q2
0,0
Q1
billion USD
100%
2010
Retail % of total
CUSHMAN & WAKEFIELD
5
7. RUSSIAN INVESTMENT MARKET
MARKETBEAT
Q4 2013
INVESTMENTS VOLUME 2013
8,00
Other
0,36
BY SEGMENT
7,00
INVESTMENT SHARE IN 2013
5%
19%
Office segment registered most of the deals in 2013
and its share was more than 41%. The volume of
investments in offices was $3.06 billion.
41%
Industrial
1,40
35%
6,00
Office
Retail
Industrial
Other
4,00
22%
3,00
6%
Moscow
S. Peterburg
Other
INVESTMENT SHARE IN 2013
2,00
Office
3,06
2013 was a record year by investment volumes in
retail segment. Compared to the previous year the
growth was about 2%.
Industrial and warehouse segment hit the record
last year by the volume of investments. In 2013
total investments were about $1.4 billion, doubled
since 2012.
72%
BY ORIGIN
billion USD
Retail
2,64
BY REGION
INVESTMENT SHARE IN 2013
5,00
The total volume of investments in 2013 was $7.45
billion.
Moscow office and retail capitalization rates are
stable:
OFFICE
69%
1,00
domestic
8.5%
RETAIL
31%
9.0%
W&I
11.0%
foregin
0,00
2013
CUSHMAN & WAKEFIELD
6
8. RETAIL MARKET
2013
NEW CONSTRUCTION IN MOSCOW 0.23 mn sq m
NEW CONSTRUCTION IN REGIONS
1.4 mn sq m (63 shopping malls)
PRIME RENTAL RATE INDICATOR
4,000 USD per sq m per annum, triple net
2014 FORECAST
NEW CONSTRUCTION IN MOSCOW 0.5 mn sq m
NEW CONSTRUCTION IN REGIONS
1.4 mn sq m
9. MOSCOW RETAIL MARKET
MARKETBEAT
Q4 2013
MOSCOW RETAIL SALES ACCOUNT FOR USD 112 bn.
THAT IS:
•More than ¼ of all retail sales in France
•1/3 of all retail sales in UK
•More than in Belgium, Netherlands and Poland
Moscow
•Twice as much as in Austria
•4 times as much as in Portugal
United Kingdom
•Almost 6 times as much as in Hungary
Netherlands
Poland
Belgium
France
Austria Hungary
Portugal
CUSHMAN & WAKEFIELD
8
10. RETAIL MARKET VOLUME
MARKETBEAT
Q4 2013
Consumer spending
RUSSIA RETAIL TURNOVER
CONSUMER CONFIDENCE INDEX, %
5%
0%
-5%
-10%
-15%
-20%
-25%
-30%
-35%
-40%
20%
15%
10%
5%
0%
2006
2007
2008
2009
2010
2011
2012
2013
Retail trade turnover growth, %
2014F
2013
2012
2011
2010
2009
2008
Q3
Q1
Q3
Q1
Q3
Q1
Q3
Q1
Q3
Q1
Q3
Q1
Q3
Q1
Q3
Q1
-10%
2007
-5%
Real personal disposable income growth, %
Consumer confidence index, %
Source: ROSSTAT
• According to Rosstat, real income of the Russian population in November 2013 grew up by 1.5%, comparing to November 2012.
Moreover, it increased by 3.6% in January-November 2013 relatively to the same period of time last year.
• The average monthly salary was 30,670 rubles in August 2013 and increased by 11.6% comparing to the past year.
• Total retail trade growth for January-November was 3.9%.
CUSHMAN & WAKEFIELD
9
11. RETAILERS
MARKETBEAT
Q4 2013
Regional expansion
REGION
Cental
CITY
Moscow
Balashiha
Ivanovo
Bryansk
Lenta
Media Markt
Serpukhuv
Tver
Maloyatoslavets
Istra
Yaroslavl
Media Markt
Leroy Merlin
Lenta
NorthSaint-Petersburg
West
Privolshsky Kazan
Beloretsk
Nishny Novgorod
Nabereshny Chelny
Orenburg
Penza
Izhevsk
Ylyanovsk
Perm
Saratov
Ufa
Consumer
COMING SOON
Max Brenner
electronics
Montcler
Disney Store
1
7-Eleven
Wetzel’s Pretzel
Footwear
2
NEWCOMERS 2013
Marukame, Bata, Harman, Takko Fashion,
Nautika, The North Face, Chicco,
Trollbeads, Krispy Kreme, Marukame
Udon, Jamie's Italian, Smoothie Factory
Jack Wolfskin
Quiznos, Reima
Leroy Merlin
Gloria Jeans
Telemax
Sbarro
H&M
Lenta, Finn Flare
O'Key
REGION
CITY
NEWCOMERS 2013
COMING SOON
Southern
Volgograd
Armavir
Sochi
Taganrog
Krasnodar
Rostov-on-Don
Ekaterinburg
Tymen
Magnitogorsk
Leroy Merlin
Lenta
Bata, Louis Vuitton
Lenta
Barker , Hamleys
Starbucks
Uralsky
OBI, O'Key, Media
Markt
Lenta
Media Markt
Sibirsky
Disney Store
Leroy Merlin
Far East
Lenta
Miass
Chelaybinsk
Surgut
Nishny Tagil
Angarsk
Irkutsk
Krasnoyarsk
Novosibirsk
Nyagan
Novokuznetsk
Omsk
Tomsk
Vladivostok
Lentа, Joop!, O'Key
Decathlon
Decathlon, Media
Markt
Children goods
4
Bata, Starbucks
Starbucks
Fashion
20
Decathlon, Nespesso, Happylon
Auchan, Familia, Henderson,Leroy Merlin
Lego
Karusel
Lego
OBI
Lenta
Detsky Mir
Henderson
Lego
Karusel, Tomas Munz
New Yorker
Lenta
Lenta
Hamleys,Mamas&Pap
as
O'Key
Decathlon
Sport
goods
7
Metro Cash & Carry
PlanetaGotepriimstva
(Sbarro, Yamkee,
Vostochny bazar)
Variety
store
3
MAIN TRENDS OF THE MARKET
• Growing interest for smaller regional cities
Opening single mono-brand stores
Increasing Internet sales
DATA: Open sources
CUSHMAN & WAKEFIELD
10
13. RETAIL FORMATS
MARKETBEAT
Q4 2013
Shopping centers dominate the market
QUALITY RETAIL FORMATS in RUSSIA,
2013 (BY SQ M)
Shopping
Centre
88.0%
FAHSION OUTLET
Mixed
Use
complex
11.9%
2013
2012
Outlet
centre
0.2%
Total GLA - 14.7 mn sq m in 506 retail stores
Outlet Village Belaya Dacha
(Phase 1), GLA 38, 000 sq
m, Moscow, Hines
Vnukovo Outlet Village
Phase 1, 16, 584 sq m,
Moscow, Diona
2013
Fashion House OutletMall, 28,760 sq m, Moscow,
Fashion House
Development
RETAIL PARK
RUSSIA RETAIL FORMATS
SHOPPING CENTRE
MIX-USE BUILDING / COMPLEX
DEPARTMENT STORE
RETAIL WAREHOUSE
STREET RETAIL
RETAIL PARK
FASHION OUTLET
2011
Solnechny, GLA 37,000 sq m
Saratov, Midland Development
2014
UNDER CONSTRUCTION : BellaVita,
GLA 35,000 sq m
Noginsk / Electrostal / Pavlovsky Posad,
Service Management & Consulting
CUSHMAN & WAKEFIELD
12
14. SHOPPING CENTERS: RUSSIA
MARKETBEAT
Q4 2013
Expansion
QUALITY RETIAL SPACE ‘000 SQ M, RUSSIA (including Moscow)
NEW SHOPPING CENTERS, 2013
LOCATION
PROPERTY NAME
RETAIL GLA, SQ M
DELIVERY
THE LARGEST QUALITY PROJECTS IN RUSSIA, GLA 15,000+ sq m
1 296
1 828
1 895
1 620
1 872
1 561
1 635
1 667
1 426
1 944
2006
2007
2008
New construction
2009
2010
CW Forecast
2011
2012
2013
2014
forecast
Announced developers plans
• 63 new retail centers with a total area of more than 1.6 mn sq m were
delivered in Russia in 2013.The new construction volume in Russia is stable
at the level of 1.4-.8 mn sq m annually.
• Average area of newly constructed shopping centers is decreasing, in 2013 it
averaged 24,000 sq m and this is 30% lower than it was in 2011.
• According to developers’ plans 3.2 bn sq m of new quality retail space might
be delivered the next year in Russia, most likely around 60-70% will be
opened.
Volgograd
Bryansk
Tumen
Ufa
Yaroslavl
St. Petersburg
St. Petersburg
Belgorod
St. Petersburg
Armavir
Krasnoyarsk
Nizhnyi Novgorod
Taganrog
St. Petersburg
Syktyvkar
Magnitogorsk
Surgut
Ekaterinburg
St. Petersburg
Krasnodar
Groznyi
Tobolsk
Irkutsk
Korolev
Kostroma
Kaliningrad
Kursk
Tumen
Tumen
Tambov
Orel
Belgorod
Novosibirsk
Sochi
92,100
91,000
75,000
63,440
62,550
61,300
56,000
53,000
48,000
45,000
45,000
39,700
38,500
31,500
30,000
30,000
29,400
28,500
28,200
26,000
25,000
25,000
23,000
22,500
22,000
20,700
20,400
20,000
19,000
18,000
17,500
15,000
15,000
15,000
Aquarel'
Aero Park City
Kristall
Planeta
Aura
London mall
Kontinent
Mega Grinn
Zhemchuzhnaya Plaza
Krasnaya Ploschad
Komsomall
Indigo Life
Marmelad
Avenue
June (phase II)
Kontinent
Agora
Globus (phase I)
Kontinent na Zvezdnoy (phase II)
Galerea Krasnodar (phase II)
Grand Park
Zhemchuzhina Sibiri
Modniy Kvartal
Gelios
RIO
Europa Center (phase II)
Evropa 2
Voyazh
Magellan
Evropa
MegaGrinn (retail part)
City Mall Belgorodskiy (phase II)
Malinka
Mandarin
TOTAL GLA RUSSIA
Q1
Q4
Q4
Q4
Q4
Q4
Q1
Q1
Q3
Q4
Q4
Q2
Q4
Q2
Q3
Q4
Q3
Q4
Q1
Q4
Q4
Q4
Q3
Q3
Q4
Q2
Q2
Q4
Q3
Q3
Q1
Q2
Q3
Q3
1,435,513
* Moscow projects are on the next slide
CUSHMAN & WAKEFIELD
13
15. SHOPPING CENTERS: MOSCOW
MARKETBEAT
Q4 2013
Structural changes
QUALITY RETAIL, ‘000 SQ M, MOSCOW
NEW SHOPPING CENTERS, 2013
LOCATION
PROPERTY NAME
MOSCOW
RIO-Leninskiy
Roomer
Fashion House Outlet-Mall
Otrada (phase II)
SportEX
Raikin Plaza
Vnukovo Outlet Village (phase 1)
VDNKh SC
329
567
Total GLA Moscow
400
379
337
2006
2007
197
2008
New construction
2009
2010
CW Forecast
2011
152
2012
231
LOCATION
MOSCOW
PROPERTY NAME
57,000
34,100
28,760
22,000
18,000
17,000
16,580
15,000
Q2
Q4
Q2
Q2
Q1
Q3
Q2
Q4
231,850
2014
forecast
Announced developers plans
Goodzone
Detsky Mir
Vodniy
Smolensky Passage (phase II)
Vesna!
Brateevo Mall
Vegas Crocus City
Mozaika
Total GLA Moscow
RETAIL GLA, SQ M
DELIVERY
235,000
94,975
67,000
58,900
56,000
56,000
50,530
40,300
33,000
19,780
16,000
15,000
15,000
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q4
Q4
Q4
Projects with GLA > 15,000 sq m
Moskvorechye
Kuntsevo Plaza
RIO-Kievskoe highway
Redevelopment of Industrial zone # 56
(TEN Development)
Aviapark
2013
• Five quality retail centers opened in Moscow in 2013.The largest of them
was Rio on Leninsky (GLA 57,000 sq m).
• Moscow region construction level was also moderate (comparing with
several previous years) – just 4 new shopping malls with total GLA less than
100,000 sq m have been opened in 2013.
•
DELIVERY
PLANNED FOR DELIVERY IN 2014
493
219
RETAIL GLA, SQ M
Projects with GLA 15,000 + sq m
822,968
There are 1.2 mn sq m of quality retail space which is under construction in Moscow at the moment planned for delivery in
2014-2015: Aviapark, that is going to become the largest shopping mall in Europe (GLA 235,000 sq m), Columbus (GLA
140,000 sq m), Vegas Crocus City (GLA 95,000 sq m), River Mall (GLA 91,200 sq m), Mosaika (GLA 67,000 sq m).
CUSHMAN & WAKEFIELD
14
16. MOSCOW SHOPPING CENTERS
MARKETBEAT
Q4 2013
Quarterly monitoring
FOOTFALL, Q1 2010=100%
VACANCY RATE, %
120%
110%
100%
90%
80%
70%
1,7% 3,0% 1,6% 0,8% 1,0% 1,0% 1,0% 1,0% 0,4% 0,7% 0,8% 0,4% 0,4% 1,2% 0,6% 1,2% 1,1%
60%
Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
2009
2010
2011
2012
2013
Q4
Q1 Q2 Q3
2009
2010
Shopping mall retail gallery structure
Q4 Q1 Q2
Q3 Q4 Q1 Q2
2011
Q3 Q4 Q1 Q2 Q3
2012
Q4
2013
“SUCCESSFUL SHOPPERS”, %
Other
Farmacy
44,3%
40,3%
40,3%
39,0%38,2%
39,3%
38,5%
37,1%
34,8%
Sportware
Homeware
30,8%30,6%
28,1%
Fashion
Children
goods
44,0%
41,2%
40,9%
39,1%
36,9%
Electronics,
mobile
Cosmetics
Footware
Accessories
Q4
Q1 Q2 Q3
2009
2010
Q4 Q1 Q2
Q3 Q4 Q1 Q2
2011
Q3 Q4 Q1 Q2 Q3
2012
Q4
2013
* Cushman&Wakefield Research quarterly monitoring of 9 quality shopping centers (total GLA - 0.5 mn sq m).
These shopping centers have been opened more than one year ago and have the established catchment area.
CUSHMAN & WAKEFIELD
15
17. MOSCOW SHOPPING CENTERS : RENTAL RATES
MARKETBEAT
Q4 2013
Rental rates are stable
PRIME RETAIL INDICATOR**, MOSCOW
QUALITY SHOPPING CENTERS RETAIL
GALLERY RENTAL RATES*
BUSINESS
GLA, SQ M
RETAIL GALLERY
<100
Food court
100 - 300 300 - 1,200
1,200 - 3,500
ANCHORS
3 600
3 125
$5,000-$8,000
Restaurant
3 750
3,500-7,000
$1,800-$2,000
Kiosks
MINI ANCHORS
4 000
3 800
3 000
2 600
$600-$1000
2 500
$700
Clothing
$1 600
$1 200
$700
$400
Shoes
$2 200
$1 700
$1 200
$800
White and Brown
Supermarket
2006
2007
2008
2009
2010
2011
2012
2013
$500
$500-$600
Hypermarket
$250-$450
Cinema
$250-$320
Q4 2013 prime retail indicator** is
4,000 USD
• A tendency towards rate increases was observed in Q2
and near future growth may be even higher than 5%
* US$ per sq m per annum, triple net
** Prime retail indicator—base asking rental rate for the 100-200 sq m gallery unit at the ground floor of the prime shopping centers, US$ per sq m per annum, triple net
CUSHMAN & WAKEFIELD
16
18. MOSCOW HIGH STREETS : RENTAL RATES
High streets are becoming more important
• The most important event for the high
streets became the development of
pedestrian zones in Moscow, which is
actively supported by the city government.
MARKETBEAT
Q4 2013
HIGH STREETS — PEDESTRIAN AREA
• There is a change of visitor flows (from
passengers to pedestrians) on those
streets, where the driving was cancelled (it
concerns Bolshaya Dmitrovka street first
of all).
• There is a huge potential for retail activity
talking about pedestrian streets and
retailers show great interest in developing
of those areas.
• The expansion of pedestrian zones will
significantly increase the supply of the
quality retail premises in Moscow.
CUSHMAN & WAKEFIELD
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19. MOSCOW HIGH STREETS
MARKETBEAT
Q4 2013
High streets are becoming more important
• Nearly 5% of the existing premises are freely available (are offered for lease or being prepared for delivery) in the
central high streets.
• Rental rates in the trade corridors are stable.
• There is a tendency for increasing lease terms in the last few years. As an example, three years ago contracts used
to be short-term mostly (11 months) and now agreements for the 3 and 5 years period become more and more
widespread.
CATEGORY
Total
%
Food / Restaurants / Cafes
Fashion and footware
20%
30%
40%
Food / Restaurants / Cafes
Services
Accessories / Optics / Watches
Cosmetics / Pharmacy / Perfumery
50%
60%
70%
80%
90%
100%
13%
Vacant or non-operationable
10%
5%
Other
0%
5%
Cosmetics / Pharmacy / Perfumery
Petrovka-Kusnetsky Most
5%
Jewelry
Nikol'skaya
7%
Accessories / Optics / Watches
Tverskaya
14%
Bank / Exchange
Pyatnitskaya
19%
Services
Pokrovka-Maroseyka
32%
4%
GRAND TOTAL
100%
Fashion and footware
Bank / Exchange
Jewelry
Other
CUSHMAN & WAKEFIELD
18
20. LEASE TERMS
MARKETBEAT
Q4 2013
Behind the rent
ITEM
COMMENT
Lease Terms
Standard lease terms for gallery tenants are between 3-5 years, break options are rare. For anchor
tenants (including fashion anchors) lease terms are up to 20 -25 years and break option is becoming
popular.
Rental Payment
Rents are typically payable monthly in advance. Turnover / percentage rents are increasingly seen in
shopping centres. Rental rates are generally calculated in USD, Euro or commercial units are used. In
less quality shopping centres rental rates are calculated in RUR.
Rent Deposit
The rent deposit required in quality shopping centres is typically between 1 – 3 months rent equitant.
Indexation
Annual indexation is typical between 3-10% or at a level of USD / EU CPI. The practice of premium /
key money payments is seldom seen in Russia. Rent reviews are rare on the market.
Service Charges
Service charge is payable by tenants at either an “open book” basis or more common as a fixed cost.
Utilities payments are charged on consumption. Building insurance is normally charged back to tenant
via service charge.
Other costs
VAT 18%
Local property taxes are not payed separately, they are generally included in the service charges.
CUSHMAN & WAKEFIELD
19
21. OFFICE MARKET
2013 MOSCOW RESULTS
TOTAL STOCK
13.85 mn sq m
NEW DELIVERY 2013
0.89 mn sq m
TAKE-UP 2013
1.58 mn sq m
VACANCY RATE
11.93%
CLASS A AVERAGE RENTAL RATE
870 USD per sq m per year, triple net
MARKET TRENDS:
•
Overall demand level is decreasing.
•
Absorption is below the construction level.
•
Even a moderate growth of new office space affects the vacancy rate.
•
Rental rates growth (if any) is below inflation.
22. DEMAND
MARKETBEAT
Q4 2013
High tenant activity but with some weakening signs
TAKE-UP (’000 sq m)
2500
80%
83%
2006
2007
2000
75%
86%
86%
2009
2010
79%
80%
2011
2012
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
86%
1500
1000
500
0
2008
Class A
Forecast, Class A
2013
F2014
Class B (B+ and B-)
Forecast, Class B (B+ and B-)
•
Overall, 1.58 million sq m of quality office space was leased or bought during 2013.
•
Real estate budgets are limited and tenants tend to primarily consider their current location as a viable alternative to a new
office.
•
Tenants continue to be interested primarily in existing buildings, the proportion of pre-lease agreements* in 2013 was 2.3%
of the total rented space in 2013.
* Pre-lease deal — the deal for a space to be delivered 60 days or more after the deal date
CUSHMAN & WAKEFIELD
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23. DEMAND
MARKETBEAT
Q4 2013
Absorption is behind new construction
ABSORPTION vs. NEW CONSTRUCTION (mn sq m)
2,14
1,81
1,49
1,38
1,35
0,90
1,08
0,89
0,65
0,76
0,57
0,68
0,49
0,30
2007
2008
2009
2010
New construction
2011
Absorption
2012
2013
•
In 2013 absorption was larger than in the previous year and was 680,000 sq m. Class B offices made the largest input to
the absorption growth. New construction continues to exceed absorption.
•
According to Cushman & Wakefield Research, 1% growth of GDP creates an additional demand for 100,000 – 200,000 sq
m of office space. Ministry of Economic Development forecasts GDP growth below 2% in 2013 and less than 3% in 20142015.
* Net absorption represents the change in the occupied stock within a market during the period.
Calculation: X – Y = Net Absorption.
X = Current stock – current vacancy
Y = Previous stock (same quarter, previous year) – previous vacancy (same quarter, previous year)
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24. OFFICE STOCK
MARKETBEAT
Q4 2013
New construction is drawn towards suburbs
NEW CONSTRUCTION (’000 SQ M)
Q4 2013
2000
1500
Q3 2013
1000
Q2 2013
500
Q1 2013
0
2006
Class A
2007
2008
Class B (B+ and B-)
2009
2010
2011
Forecast, Class A
2012
2013
F2014
Forecast, Class B (B+ and B-)
0
50
100
Downtown Class A
Central Class A
OTA Class A
150
200
250
300
350
Downtown Class B
Central Class B
OTA Class B
•
By the end of 2013, Moscow had 13.85 mn sq m of quality office space. New construction of 0.89 mn sq m was the highest since
2010. 49 business centers were delivered to the market, among them are Mercury City Tower, White Gardens, 9 Acres, Park
Pobedy, Lotte Business Center and Newton Plaza.
•
Only 25% of new quality office space meet Class A requirement, most office space is classified as Class B. About half of new
delivery is located in the suburbs (outside the Third Transport Ring).
•
The new construction was mostly located outside the historical center – 49.2% of new construction was built outside the Third
Transport Ring in 2013.
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25. AVAILABILITY
MARKETBEAT
Q4 2013
Availability is growing in Class A, stable in Class B
21,5%
AVAILABILITY
24,3%
20,8%
18,9%
15,7%
12,1%
9,4%
11,1%
4,5%
4,2%
2,7%
4,1%
2006
2007
Q4:21,0%
14,4%
9,6%
10,3%
10,3%
mn sq m, office rentable
VACANCY RATE
3,0
2,5
1.29
2,0
1,5
1,0
10,9%
Q4: 10,25%
6,0%
1.45
0,5
0,0
2008
2009
2010
Vacancy rate Class A
2011
2012
2013
Vacancy rate Class B
F2014
2006
2007
2008
2009
2010
2011
2012
2013
Availability in existing buildings (EOP)
Available future supply (within 1 year) (EOP)
•
Altogether there is 1.45 mn sq m of available office premises in 464 existing buildings and 1.8 mn sq m is in buildings under
construction.
•
Class B vacancy rate was stable during the last 6 years, since 2011 it increased by less then 1%.
•
In 2013 Class A vacancy rate increased from 16.4% (December 2012) to 21.2% (December 2013), and the average is 18.9%.
The tendency of on increase in the Class A vacancy rate in Moscow will continue in 2014.
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26. RENTAL RATE
MARKETBEAT
Q4 2013
Rental rates remain unchanged in 2013
AVARAGE RENTAL RATES
1088
935
Q4: $880
731
711
734
645
807
796
850
870
Q4: $570
646
529
2006
509
2007
2008
2009
Class A
414
444
466
2010
2011
2012
530
500
2013
F2014
Class B (B+and B-)
•
At the end of 2012 and the beginning of 2013 market players were expecting positive dynamics and the result was rental rates
growth of 15% growth. But later rents were adjusted, as a result the average rental rate increase fell to 7-12% depending on the
class of the building and location. In the centre of Moscow (inside the Garden Ring, Novoslobodskiy district) and in Moscow-City
average class A rental rate grew most of all. Average class B+ rental rate grew most of all at the suburbs of Moscow.
•
In Class A, the average asking rental rate is $870.
•
In Class B, the average asking rental rate is stable at $530 (Class B+ $560).
•
Prime rents remain at $1,200 per sq m (triple net) per annum for the best office “trophy” premises in the Moscow market.
* Base asking rental rates, USD per sq m per annum, weitghted average for deals closed within the period, triple net
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27. WAREHOUSE & INDUSTRIAL
2013 SUMMURY
NEW CONSTRUCTION IN MOSCOW 850,000 sq m
NEW CONSTRUCTION IN REGIONS
310,000 sq m
PRIME RENTAL RATE INDICATOR
135 USD per sq m per annum, triple net
28. MOSCOW SUPPLY
MARKETBEAT
Q4 2013
New construction of quality warehouses (Classes A and B)
1600
1400
1200
2013
1000
New construction 850,000
sq m
Vacancy rate (class A) 1.5%
800
600
400
2014
200
Total pipeline 1,200,000
sq m
0
2007
2008
2009
2010
2011
2012
2013
2014F
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29. RUSSIA SUPPLY
MARKETBEAT
Q4 2013
New construction of quality warehouses (Class A)
Other; 1.40%
Krasnodar; 0.78%
Voronezh; 1.40%
Rostov-on-Don;1.40%
N. Novgorod; 1.40%
Samara; 1.63%
Kazan; 2.51%
Novosibirsk; 2.88%
Ekaterinburg; 4.64%
St. Peterburg; 13.73%
10 000
8 000
6 000
2013
New construction
3,100,000 sq m
4 000
Moscow; 67.52%
2 000
0
2012
2013
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30. RUSSIA
MARKETBEAT
Q4 2013
Rental rates, USD per sq m per annum, triple net
$160
City
$140
$120
$100
$80
$60
$40
2008
St. Petersburg
2009
2010
Ekaterinburg
2011
Rostov-On-Don
2012
Moscow
2013
2014F
Moscow
St. Petersburg
Ekaterinburg
Nizhnyi Novgorod
Samara
Kazan
Rostov-On-Don
Krasnodar
Novosibirsk
Ufa
Avg base rental rates,
USD / annum
130-140
130-135
130-135
120-125
110-115
90-100
120-125
120-125
110-125
120-125
Avg leased area,
sq m
10,000-15,000
2,000-10,000
5,000-10,000
3,000-5,000
3,000-5,000
3,000-5,000
3,000-5,000
3,000-5,000
2,000-5,000
3,000-5,000
Novosibirsk
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32. DEMAND STRUCTURE
MARKETBEAT
Q4 2013
DEMAND STRUCTURE, MOSCOW REGION
DEMAND STRUCTURE, OTHER REGIONS
13%
19% Distributor
22%
32%
16% Logistic
22%
10% Other
14%
12% Logistic
1%
Other
15% Producer
5%
2%
25% Producer
3%
Distributor
31%
59% Retailer
39%
2012
30% Retailer
2013
29%
2012
2013
• The majority of transactions in W&I segment in Moscow region are carried out by retail companies, which are
also the market leaders in terms of leased sq m.
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