According to JLL analysts’ calculations, Q3 was the strongest quarter of the year with investment volumes reaching USD1.4bn, down only 10% YoY. Moreover Q3 volumes are equal to the total investment volume over H1 2014. Through Q1-Q3 2014 Russian real estate investment volumes amounted to USD2.8bn, which reflects a decline of 43% YoY.
“A pick up in business activity (compared to the first half of the year) and comparatively large deals (such as the purchase of the Pokrovsky Hills residential complex and the Novinskiy Passage business and retail centre) are encouraging signs for the market”, – Tom Mundy, Head of Research, JLL, Russia and CIS, commented. – “However, tension between Russia and the West, the slowdown in the Russian economy as well as continued exchange rate volatility still reflect considerable risks for investors (especially for foreign ones). So we would be reluctant to say that these results indicate a recovery of the market.”
Capitalization rates have also reacted to the current market situation. In Moscow, for offices and shopping centres rates increased by 50bps to 9.50% and 9.75% respectively. For warehouses rates increased by 25bps to 11.25%.
