According to the latest data from Jones Lang La Salle, Russia has come back to life in terms of investor demand, sentiment and, most importantly investment. The firm has just revealed its figures on real estate investment in the country for last year showing a total transaction volume of $8.6 billion, which is 1.3% more than 2011. The evidence indicates residential to be the leading sector, as commercial investment transaction volume was down 4.8% compared to last year at $7.9 billion.
The strong performance is owed to a last-quarter surge, according to the report $3.5 billion was invested in Q4, a year on year growth of 42%. The firm predicts this year's volume will be around $7.5 billion.
Olesya Dzuba, Head of Capital Markets Research, Jones Lang LaSalle, Russia & CIS, comments: "For the last two years the Russian real estate investment market has demonstrated a positive trend with higher levels of annual investment volumes compared to pre-crisis results. Additionally, stable macroeconomic indicators, an improved overall investment climate, and relatively easy access to financing continue to attract investors to the Russian real estate market. Comparatively higher prime yields in Moscow are clearly offering a significant premium relative to other European markets. Investor interest continues to be focused on high quality core assets. In 2012 notable investment deals included assets such as Ducat Place III and Silver City business centres by O1 Properties."
Unsurprisingly Moscow remains the top market, accounting for 88% of the total investment volume, up from 69% last year, but that doesn't tell the full story... In the office sector 97% of all investment in Russia went into Moscow.
JLLS also recorded an increase in investment from Russians who accounted for 78% of total investment, up from 59% last year. But the firm said that foreign demand is not falling, rather it is an increase in activity from Russian's who are often quicker off the mark and have better access to financing in the country.
- Monday 21 January 2013