Moscow’s Real Estate 2013

Department for External Economic and International Relations of Moscow

Moscow Investment Presentation in New York City, October 28, 2013

Anatoly Valetov Deputy Head of Department

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General Overview (1)

 

First half of 2013 was a record high for the commercial real estate market. Total investment $3.81 billion, 88% of all investments are in the Moscow region. Primary volume of investments (1st half 2013) were in the retail and office segment – $3.4 billion.

Department for External Economic and International Relations of Moscow

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General Overview (2)

Segment Project Volume, $ million Seller Investor

Retail Metropolis 1,100-1,200 Capital Partners MSREI

Оffice Four Winds 360-380 Snegiri / AFID Millhouse

Оffice Olimpiya Park 340-360 O1 Properties Casperskay Lab

Оffice Hermintage Plaza 260-280 Forum Properties N/A

Retail Aura (Novosibirsk) 220-250 Renaissance

Construction RosEuroDevelop

ment

Оffice Aquamarine Phase III (50%) 220-240 Super

Passion Ltd AFI Development

Hotel Renaissance Moscow Olympic 100-130 N/A Azimut Hotels

Logistics Tomilino 80-90 GHP BIN Group

BIGGEST DEALS 1ST HALF 2013

Capitalization rates Cap. rate (A class) - 8.5% for office, 9.25% for retail, and 11.5% for logistics. 250-450 basis points higher than London and Paris. Commercial risks are closer to Europe and further from BRICS.

Department for External Economic and International Relations of Moscow

Retail (1)

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General Info: 1st half 2013 – 520,000 sq. m. have been built High attendance Positive outlook Retails and developers are positive

Department for External Economic and International Relations of Moscow

Retail (2)

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Trade operators: Segments «food», «everyday equipment», «clothing», «cinema» OUTLOOK

In 2013 103 Shopping malls with a total volume of 3,155,752 sq. m. in 58 cities in Russia. Largest markets are Moscow and Ekaterinburg (>1milllion) Novokuznetsk, Tyumen, Irkutsk (500,000 – 1 million)

Department for External Economic and International Relations of Moscow

Offices

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Lease rates are up 5%. New 388,000 sq. m. in 1st half 2013 Plans for 2nd half 2013 – 600,000 sq. m.

TOTAL STOCK MOSCOW / 13.44 million sq. m. VACANCY RATE / 13.15% AVERAGE RENTAL RATE, CLASS A / US$ 870 1Н 2013 DEMAND (TAKE-UP) / 868,063 sq. m 1Н 2013 NEW CONSTRUCTION / 341,041 sq. m

Department for External Economic and International Relations of Moscow

Warehouse Market

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Supply (class A, B):

Moscow – 7.2 million sq. m;

St. Petersburg – 2 million. sq. m.;

other cities – 2.6 million. sq. m . Most projects are in Moscow region – 61% and St. Petersburg region – 18%.

Department for External Economic and International Relations of Moscow

Hotel

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Hotel rooms: total 32,000 rooms (11,000 brands). Next 3 years the stake of brand hotels will grow up to 40%. Russia’s hotel industry capacity rate: 45-49%. Price for mid-scale segment is 110 USD/night, upscale segment – 160 USD.

Department for External Economic and International Relations of Moscow

INVEST IN MOSCOW

Department for External Economic Activity and International Relations Address: 13, Tverskaya St., Moscow, 125032 Tel.: +7 (495) 633-68-66 Fax: +7 (495) 633-68-65 www.dvms.mos.ru www.investinmoscow.ru E-mail: dms@dms.mos.ru