Experts told us what changes to expect in the real estate market and what kind of housing Muscovites will buy

Photo: Vasily Kuzmichenok/TASS

Traditionally, autumn in the real estate market is a time of business activity after the summer lull and the holiday season. However, this year’s summer was “hot”: legislative changes regarding shared-equity construction came into force, mortgages broke record after record in terms of loan issuance volumes, new projects poured into the new buildings market, and the secondary market also revived after a long period of lack of demand. Positive sentiments are somewhat overshadowed by talk of new sanctions, a possible stop to the reduction of mortgage rates, as well as a real lack of growth in incomes of Russians.

RBC Real Estate asked market participants about what is happening in the capital's real estate market today and what changes to expect in the fall.

“Resale”: growing demand and washing away cheap apartments

The secondary real estate market in Moscow has seen an increase in demand for apartments since the beginning of the year. Experts attribute this to the realization of pent-up demand that has accumulated over several years, a decrease in mortgage rates, and the return of investors who consider real estate as a tool for converting savings into square meters (against the backdrop of declining returns on bank deposits). The level of demand for secondary housing was also influenced by recent events in the new buildings market. Legislative changes in the field of shared-equity construction and the recent collapse of one of the largest developers near Moscow (Urban Group company) have made buyers somewhat wary.

“Given the difference in the cost of “​resale” and new buildings, many chose to overpay a little, but buy real existing housing,” says Irina Pesic, managing director of the brokerage department of Miel-Network of Real Estate Offices.

The growth in demand quite quickly began to wash out the most budget offers worth up to 5 million rubles from the market. According to Inkom-Real Estate, at the end of 2016 the share of cheap lots in the exhibition was 7% (this is the highest value in the previous four years), now it has decreased to 3%, and in absolute numbers it has more than doubled. Experts explain this by the fact that at the end of 2016, due to low demand, many cheap properties accumulated on the secondary market. The reduction in prices for such apartments also played a role then - the owners, fearing a further reduction in price, rushed to put the housing up for sale. Now the demand for budget apartments has increased by 50%, and their prices have already stopped falling. Sellers are bargaining less and less willingly, realtors say. At the end of 2016, more than 90% of inexpensive properties were sold at a discount, and the average discount was 15%, but now these are isolated cases.

“However, all this does not lead to a real increase in the cost of apartments,” notes Irina Pesic. — The average price is growing slightly, but only due to the fact that liquid offers are quickly sold, and those that are more expensive remain. Buyers still don’t want to buy overvalued properties - there is no growth in real incomes among the population and is not expected.”

According to the Inkom-Real Estate company, buyer activity began to decline in July. And this is largely due to news about planned new anti-Russian sanctions, as well as the weakening of the ruble against the backdrop of negative forecasts.

The peak of the mortgage boom in the secondary market has passed, says Mikhail Kulikov, director of the secondary market department at Inkom-Real Estate, and this has also affected the decline in demand. “If in May the share of mortgage transactions reached a record 38.2% for this segment, then by now it has decreased to 33.3%,” he said. “The reason is that the majority of buyers who previously postponed the purchase of real estate, waiting for rates to decrease to psychologically comfortable values ​​for them, have already entered the market.”

New buildings market: construction and mortgage boom

One of the main trends in the primary real estate market is the increase in the activity of developers against the backdrop of changes in legislation. There has been an avalanche of issuing construction permits, under which developers can still work according to the old rules. According to the Metrium company, in July in Moscow, sales of eight new buildings started in the mass segment alone, while in the entire first half of 2017, only seven residential complexes went on sale. In June, 132 building permits were issued in the capital, although since the beginning of the year 10-15 documents have been issued per month.

“Developers rushed to launch new projects before the next innovations came into force on July 1, 2018, so it is not surprising that since the beginning of the year, about 1.5 million square meters have gone on sale. m of real estate,” explained Natalia Kuznetsova, general director of the Bon Ton real estate agency. — The trend continues to develop: in July alone, sales started in 28 new buildings in Moscow. In addition, several large-scale projects have been launched in the Moscow region.”

Since the beginning of the year, the new buildings market has shown an increase not only in supply volumes, but also in demand for new buildings, experts note. At the end of the first half of the year, the number of registered kindergartens in Moscow increased by almost 45% compared to the same period last year. “This is due, first of all, to an increase in the availability of mortgages and a decrease in the purchase budget,” explains Irina Dobrokhotova, chairman of the board of directors of Best-Novostroy. — After all, if in 2014 the minimum prices in new buildings in the capital started from 4.1-4.3 million rubles, now you can keep within 3.1-3.8 million rubles. This was partly possible due to an increase in the overall supply of compact apartments and studios, that is, due to a general decrease in lot area.”

Such a “counter” movement of supply and demand has not been observed in the capital’s market of new buildings for a long time, and in general this is a positive signal, says Roman Sychev, general director of the development company Tekta Group. He notes that demand continues to grow against the backdrop of widespread price increases (for fuel, housing and communal services, etc.) and fluctuations in the ruble exchange rate relative to world currencies. “Naturally, new buildings acquire the characteristics of a conservation tool, and for successful projects, an increase in money,” says the expert.

Developers, despite the summer period, have already begun to raise prices. As Maria Litinetskaya, managing partner of the Metrium company, said, in the mass market of new buildings in Moscow, the price of a “square” increased in June by 1.7%, in July - 1.6%. In August, individual projects also recorded price increases caused by stable demand. “This year there is practically no seasonality factor,” she adds. — In July, the number of transactions in the mass segment increased by 12%, and compared to the same period in 2017 — by 45%. In the first two weeks of August, 37% more transactions were closed than in the first two weeks of July. In my opinion, this is due to the continued decline in mortgage rates."

Secondary market: forecasts for autumn

We should not expect a decrease in activity either on the primary or secondary markets in the coming months, says Irina Dobrokhotova. Rather, on the contrary, with the beginning of the business season, demand growth in both segments is possible. “And this will be determined not only by the implementation of purchases planned for the current year, but also by fluctuations in the ruble, which are often a decisive factor for undecided buyers,” she explains. - Rumors about increasing mortgage rates may also contribute to this. But a rush of activity is not expected.”

In the secondary housing market, supply continues to significantly exceed demand, and this imbalance will continue in the fall. Although Inkom-Real Estate does not rule out some outflow of buyers from the market of new buildings to the secondary market, since the situation in the primary market has worsened due to the bankruptcy of a number of developers, as well as due to emerging news about delays in the commissioning of objects. “All this creates a negative background, and potential buyers will now think a hundred times about which segment to choose,” says Mikhail Kulikov. “Especially if they manage to find a secondary property that is suitable in cost and quality not far from their previous place of residence.”

The average purchase budget on the secondary housing market in Moscow last year was 7.5 million rubles, now it is 7.7 million rubles. The change in average prices for secondary apartments occurs extremely slowly, so no major price changes are expected by the fall. But it is possible that prices will go down if the economic situation in the country worsens and demand falls, experts say.

New buildings: forecasts for autumn

A large number of new projects are expected to appear on the new buildings market. “According to various estimates, the capital’s developers have construction permits in their hands, according to which it is possible to build over 10 million square meters. m of housing,” said Kirill Ignakhin, CEO of the development company Level Group. — This is about four to five annual housing commissioning in the capital. There is reason to believe that in the coming year all permits will turn into real projects that will go on sale.”

The expert does not rule out that developers will start selling new residential complexes at very attractive prices due to intensifying competition. However, projects already on sale are likely to rise in price.

“The websites of many developers contain information that from September 1, prices will increase or discounts will no longer apply,” says Natalya Shatalina, general director of the Miel-Novostroiki company. — Most likely, in the fall we will actually see some rise in prices. But it will not become significant, since purchasing power is currently limited by the lack of income growth.” At the same time, the start of sales of new projects at relatively low prices will be a deterrent, analysts say.

The number of mortgage transactions is also expected to increase this fall. The conditions for buyers to apply for loans more often are created by a lack of income growth and a constant decrease in mortgage rates. However, the head of the Inkom-Real Estate analytical center, Dmitry Taganov, is skeptical. He believes that citizens are waiting in vain for a further reduction in rates: given the sanctions newly initiated by the United States, we can expect that the key rate of the Central Bank will not only not decrease, but most likely will increase, and mortgage interest rates will not decrease.

Today, more and more new ghost towns are appearing in Russia. This happens for a variety of reasons, but the main one is traditional and simple - the lack of a production center that would give life to the city. The lack of jobs leads to the fact that thousands of people, especially young people, are forced to leave such settlements in search of a better life.

1. Spirituality

The history of this city began with a monastery, which appeared in these places back in the 13th century. The city is still known today for its bakery and forestry industries. Despite two fairly large enterprises, its population is declining. Currently about 4,100 people live here.

2. Novorzhev

The city is 140 km from Pskov. Today about 3,250 people live here. The settlement was founded in 1777. Once upon a time, there were several enterprises on the territory of Novorzhev, including a clothing factory and a flax mill. Today, only a bakery and a wire factory are functioning.

3. Susuman

A city in the Magadan region with a population of 4,700 people. Local enterprises specialize in mining, including gold mining. Surprisingly, the city is depressed and dying out.

4. Meshchovsk

City in Kaluga region. It is home to about 4 thousand people. The first settlement was founded here back in 1238. The city's population is slowly declining due to natural factors and migration.

5. Pevek

The northernmost city of the vast Motherland. Located in the Chukotka Autonomous Okrug. As of 2018, the city's population is about 4,300 people. Until 1967, this settlement was not even always indicated on geographical maps. There are several enterprises here, one of which is engaged in geology.

6. Mezen

The city is 390 km from Arkhangelsk. Today about 3,280 people live here. The settlement was founded back in the 16th century. Today, most of the population of this town is engaged in folk crafts. The settlement is slowly dying out due to the outflow of people under the influence of natural factors and migration.

7. Spas-Klepiki

The settlement was founded back in the 16th century, but it was only given city status in 1920. Today just over 5,400 people live here. Almost the entire local population is employed in enterprises related to the production of clothing and footwear. Year by year there are fewer and fewer people in the settlement.

8. Kologriv

City in Kostroma region. Today, about 3,000 people live here, and the population continues to decline. The remaining residents work mainly in the woodworking industry. There are several functioning enterprises here.

9. Novosil

A city in the Oryol region with a population of 3 thousand people. In the early 90s, all major industrial production closed here. Since then, the settlement has been slowly dying, mainly due to migration of residents.

Selling real estate is a fairly serious transaction, which is accompanied not only by making a profit, but also by additional hassle. Since such real estate transactions are not an everyday occurrence for citizens, preparation for the transaction must be done quite carefully.

To begin with, you need to calculate all the expenses that will definitely appear when completing a purchase and sale transaction. After all, in order to obtain all the necessary certificates, sign documents with a notary and pay taxes, you will have to spend a decent amount. Consequently, the profit from the transaction will be less than planned by the seller.

The most serious blow to your wallet in this case will be paying income tax when selling real estate. The main nuances of this taxation, taking into account the current changes in 2018, will be discussed in this article.

Tax on the sale of real estate in 2018 for individuals

The sale of real estate on the territory of the Russian Federation is taken into account by tax legislation as income that must be subject to taxation. The seller of the apartment is obliged, after concluding a purchase and sale transaction, to submit a 3-NDFL declaration to the local authorities of the Federal Tax Service, and then pay the tax by July 15 of the year following the transaction.

Calculating the amount of personal income tax is the responsibility of citizens, not employees of the Federal Tax Service, but the tax service can identify a special undervaluation. Therefore, when filling out the declaration, it is worth remembering that now the price of an apartment is checked through the cadastral service, and therefore cannot be less than 70% of the estimated cadastral value. Otherwise, a re-inspection and recalculation will be carried out with a fine.

However, not everyone is required to pay this fee. The law has several nuances, thanks to which you can avoid additional costs. The main criterion is the period of ownership of the property. If before 2016, in order to sell without paying personal income tax, it was enough to own the property for 3 years, but now the period of ownership of the property has been increased to 5 years. But this change does not apply to those who registered their property before January 1, 2016. Therefore, citizens who have a three-year period of ownership of property in 2018 can safely sell it without reporting to the Federal Tax Service.

Also, having the right of ownership for 3 years is sufficient for citizens who have received property by inheritance. But, if the heir decides to sell the apartment earlier, he will be required to pay income tax at a rate of 13%. If personal income tax still needs to be paid, you can use one of two deductions that reduce the payment amount:

1. You can adjust the amount of income received, taking into account the costs of purchasing property. Thus, an expense will be deducted from the proceeds, and the difference will be taxable.
2. Apply for a property tax deduction equal to 1 million rubles. This benefit does not depend on expenses or type of real estate; it can be distributed among several objects of sale, but provided that the total annual deduction does not exceed 1 million rubles.

By the way, if the value of the property upon sale does not exceed 1 million rubles, no tax is charged. The Express-Novosti news agency draws the reader's attention to the fact that all of the above deductions and periods of ownership of property apply only to residents of Russia.

Real estate tax for residents and non-residents of the Russian Federation

• Resident of Russia

If a person who decides to sell real estate in Russia is a resident of this country, then he is subject to the standard tax rate for the sale of real estate, which is 13%. Consequently, after concluding a purchase and sale transaction, a citizen submits a 3-NDFL declaration in the standard form.

For residents, all the above benefits apply for the period of ownership of property, which are exempt from paying tax. But only citizens who regularly pay income tax can receive preferential tax deductions.

• Non-resident of Russia

For non-residents, the issue of sale becomes much more complicated, although no difficulties are expected when completing the paperwork. But the personal income tax itself will have to be paid in a much larger amount. Thus, for non-residents there is a tax rate of 30% of the value of the property being sold.

In addition to the rate, other conditions also change for a non-resident. For example, there is no opportunity to receive preferential deductions or take into account the period of ownership of property. In other words, in this case, none of the methods of reducing the tax payment applies.

It is worth considering that ignorance of these nuances does not exempt foreign citizens from responsibility. If, after the sale of real estate, a non-resident leaves Russia without paying personal income tax on time, then the next visit to this country may be accompanied by fines and a summons to court.

In certain cases, depending on the amount of debt, a foreign citizen may be subject to criminal liability for tax evasion.

Property tax for retirees in 2018

The issue of property taxes is especially acute for people of retirement age, since the size of the pension does not correspond to the necessary monthly expenses. This applies not only to utility bills or the purchase of medicines, but also to taxes, from which pensioners are not exempt. One such payment is property tax.

According to the law, a pensioner is required to pay a property tax if he owns several properties, as well as if the property is used for commercial purposes. But, since there are benefits for pensioners that exempt them from tax on one of the properties, the question arises: do you need to pay tax when selling real estate?

In this case, the pensioners will not be happy with the answer. The thing is that when selling, personal income tax applies, from which pensioners are not exempt, so you will have to report to the Federal Tax Service for the sale of real estate.

However, pensioners, like all residents of the Russian Federation, have the right to reduce the amount of tax. Of course, this does not include artificially lowering real estate prices, because the cadastral value will be taken into account in the calculation. But you can apply a preferential deduction equal to 1 million rubles, or use a deduction taking into account the costs of purchasing housing.

Moreover, the last point includes not only the costs associated with the purchase of housing for sale. Now citizens have the right to apply for a deduction when purchasing other real estate during the year in which the purchase and sale transaction took place. For older people, all periods of ownership of property, which are taken into account for taxation, are also preserved.

Let us remind you that the three-year period is valid not only for property registered in ownership before January 1, 2016, but also for objects received by inheritance or by gift from close relatives. This list also includes property transferred under an annuity agreement with lifelong maintenance of a dependent.

Please note that the deed of gift is not taxed only if received from close relatives, and the period of ownership of the inheritance is considered not after the registration of the inheritance certificate, but from the day the inheritance is opened, that is, immediately after the death of the testator.

Procedure for paying tax on the sale of real estate in 2018

According to the law, when selling real estate, citizens are required to pay 13% on an amount that exceeds 1 million rubles. Consequently, the tax is not calculated on the entire cost of the object being sold. In this case, the difference between the value of the property and 1 million rubles is subject to taxation. This calculation system is valid only for residents of the country; non-residents will be required to pay 30% of the value of the property being sold.

Further, Russian citizens have the right not to pay tax if they have been owners for more than 3 or 5 years (depending on the date of registration of property). However, even in case of tax exemption, it is still worth drawing up a declaration for the Federal Tax Service.

The declaration must be submitted no later than April 30 of the year following the execution of the purchase and sale transaction. It is worth remembering that tax officials check the period of ownership of the property according to the date indicated in the certificate of ownership. The tax itself must be paid no later than July 15 of the following year.

It is also worth remembering some nuances related to personal income tax payment:

1. If the apartment was received after registration of inheritance, gift or privatization, then the citizen will not be able to use the tax deduction related to the costs of purchasing housing.
2. Using a purchase and sale transaction to exchange apartments does not exempt you from personal income tax. However, if the purchase of a new home took place in the same year when the purchase and sale agreement was concluded, then the expenses can be used as a tax deduction. If an amount equal to the amount received from the purchase and sale transaction is spent on new real estate, then an offset can be arranged with the tax service.
3. When selling an apartment that is in shared ownership, the tax calculation will depend on the value of each share. If the price of a share does not exceed 1 million rubles, no tax is paid for it, otherwise the payment is calculated separately for each owner.

So, selling apartments entails not only profit, but also costs. One of the main expense items is personal income tax, which all citizens are required to pay, and benefits for this payment apply only to residents of Russia. But non-residents should be careful and study the tax legislation of this country before selling, so as not to incur administrative or criminal liability.

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At the end of 2015, Moscow apartments became cheaper by up to 15 percent. The forecast for the real estate market in Moscow for 2016 continues the trend of cheaper square meters in the capital. When the solvency of the townspeople has dropped to a minimum, and the supply on the market has increased, and even a barrel of oil is about thirty dollars, then there is no need to expect any other development. But, according to experts, you should not expect strong discounts; a square in Moscow will not become “penny”.

The dynamics of the real estate market development completely depend on the economic situation in the country, so there is no need to talk about major changes in 2016.

The economic crisis was a shock to the real estate market, so in 2015 the demand for it fell by 30-40% compared to the previous year. These are the consequences of record demand in 2014 (after all, many citizens tried to make reliable investments by purchasing real estate in order to protect their savings), a reduction in income, devaluation of the ruble, and rising lending rates.

Subsidizing mortgage rates on the primary real estate market, extended until May 2016, will become one of the most important points in reviving the construction industry. It was the introduction of this anti-crisis program that prevented the new construction market from collapsing in 2015, maintaining the demand for new construction in the mass segment.

It is worth noting that such “targeted” actions will bring only short-term effects; a general improvement in the construction sector is possible only after stabilization of the economic and political spheres of the country.

Real estate market in the first half of 2016

In the first half of 2016, the upward trend in housing supply will continue, as construction companies continue to bring properties already under construction to the market. And, in order not to violate deadlines and obligations to the city authorities and participants in “long-term” construction, including the reconstruction of industrial zones.

It is easier for developers to reconsider rates per square footage and redevelop objects, in order to divide elite housing into the more popular economy class, to reduce the cost of apartments, and rent it out, than to be left with “nothing.” Thus, many new buildings positioned as business class are actually comfort class. The decrease in supply will begin towards the end of the year.

Solvency will continue to fall in 2016, because economic forecasts for Russia for 2016 show a downward trend. As household incomes fall and expenses rise, people also begin to spend their savings.

Also, city residents, accustomed to such prices, will delay purchasing housing in the early stages of construction, which will further reduce demand, by about 10%. And, given the end of the program to subsidize mortgage rates by the state in 2016, the drop in demand could approach thirty percent compared to 2015.

What will happen after 2016

At the end of this year, the supply of residential square meters may accumulate for 3–4 years of its implementation. Thus, looking at the growing volume of proposals in the capital of the Third Transport Ring Road and the Moscow Ring Road, we can expect a growing trend towards an increase in the number of affordable housing in Moscow. After all, the bulk of apartments that will hit the market in 2016 will be presented in economy and comfort class.

Business class apartments, in the total supply of the real estate market, will decrease by approximately 10-15 percent. Thus, the price tag for each square meter of housing in the capital, in previous years, varied around 180 - 200 thousand rubles, but according to the forecast for 2016 for the real estate market in Moscow, now this figure has gone down and will be around 170 thousand.

Supply volumes are also increasing in the secondary housing market, in conditions of a large shortage of consumer demand. Demand for secondary goods remained at only twenty percent. Since only a small number of sellers are ready to auction off apartments, taking into account the current price and economic realities.

Also, the introduction of a new market tax on real estate and rising prices for utilities makes it extremely difficult to maintain several apartments, even for wealthy citizens. Therefore, we should expect a wave of offers of investment apartments on the real estate market. Although, few investors are ready to sell apartments at current prices and will hope until the last moment that the situation will stabilize and the previous prices will return.

Also, the demand for secondary housing is falling due to the luring of buyers by companies introducing new buildings to the market, due to favorable mortgage lending conditions and long-term installments.

Another factor of pressure on the secondary market of already dilapidated houses will be a large number of offers of apartments in new buildings that have already been commissioned, and even with renovations inside. After all, previously the main advantage of a “resale” was a significantly lower price and the possibility of instant occupancy.

If the supply of housing on the market fell, prices would go up. But, for about half a year, developers will be introducing onto the market projects that were started in previous years, which, naturally, will not allow this. Within the boundaries of the Moscow Ring Road, offers appeared for 100 thousand rubles per square, a couple of years ago such a price tag could only be found in the Moscow region, and even not in its closest parts. By the way, there and in the “new Moscow”, there has also been a tendency towards a decrease in the activity of developers, due to the insolvency of citizens.

Thus, the greatest demand will be for properties inside the Moscow Ring Road, with cubic capacity and pricing policy aimed at middle-class buyers. Dachas, town houses, cottages and all housing remote from civilization will suffer the most, prices will drop to about 35%. In general, the most in demand will be housing with excellent transport links and walking distance to all city amenities and a small cubic capacity.

And the biggest losses will be suffered by office real estate, due to the reduction and closure of small and medium-sized businesses due to unfavorable economic conditions. The decline in prices is also facilitated by the removal of the monopoly on the provision of mortgages from the banking sector. Now various public and private funds will be able to issue mortgages, which can reduce its cost.

In summary, the forecast for the Moscow real estate market for 2016 is very positive for a potential buyer, since now he can expect a huge selection, more affordable prices and very attractive terms of installments and loans. It's time to buy a home! As for sellers and developers, the year will become even less profitable due to sales at even lower prices and a reduction in new construction projects. You can only hope for the end of the crisis, the lifting of sanctions and the general stabilization of the economic and political situation in the country.

The results of the current year and the main trends in the office, warehouse, retail and hotel real estate markets were analyzed by the leading international real estate consulting company CBRE. The company’s specialists also determined the prospects for the commercial real estate market in the coming 2017.

2016 will be remembered for the stabilization of the real estate market, increased investor activity, albeit with a limited number of market investment transactions, and a change in the mood of tenants - from revisions of lease terms to the conclusion of new transactions in all segments starting from the second half of the year.

According to expert forecasts, the Russian economy will show slight growth in 2017 - from 0.5% to 2%. The base scenario forecast of the Ministry of Economic Development (MED) assumes economic growth of 0.8% in 2017.

Against the backdrop of expectations for a gradual economic recovery, the main driver of growth in the commercial real estate market will be continued stability and the beginning of a new cycle, within which investors have good profitability potential

Despite the reduction of the key rate by the Bank of Russia, the cost of bank financing still does not allow developers to start new projects. At the same time, they are effectively using the pause that has arisen: they are looking at sites, agreeing on the parameters of new projects and obtaining permits. This will allow them to take advantage of the improvement in debt market conditions expected next year.

Commercial real estate market trends in 2016

In 2016, there was a continued decline in the new supply of commercial real estate, especially in the warehouse and office markets, while the volumes of retail real estate commissioning remained high due to inertia. There was a reduction in the share of vacant space in the office segment due to the activity of government agencies and companies that, taking advantage of the situation, bought or rented large volumes of office space.

The market finally stabilized in 2016, and in the second half of the year, tenant activity increased significantly. This year, the prerequisites for the start of a gradual recovery of the commercial real estate market in 2017 have finally formed

Rental rates for commercial real estate are firmly established in the ruble zone (with rare exceptions), reached the bottom and stabilized in all segments. The volume of transactions for renewals of existing lease agreements, as well as revisions of their terms, decreased by a third. At the same time, since the middle of the year, there has been an increase in activity in concluding new lease transactions on market conditions.

For Moscow, 2016 was a breakthrough year in terms of infrastructure development: the Rumyantsevo and Salaryevo metro stations in New Moscow were opened, the Moscow Central Circle was launched, and by the end of the year it is planned to commission the first section of the Third Interchange Circuit.

CBRE analysts believe that the commercial real estate market experienced a final stabilization in 2016, and in the second half of the year, tenant activity increased significantly. This year, the prerequisites for the start of a gradual recovery of the commercial real estate market in 2017 were finally formed.

Investments in commercial real estate

According to Irina Ushakova, senior director, head of the capital markets and investment department at CBRE, the volume of investments in 2016 will increase by 29% and amount to $4.5 billion (or about 300 billion rubles). At the same time, 40% of this volume was formed by transactions concluded by government agencies and state-owned companies, while last year there were no such transactions.

Russian capital dominated in 2016, accounting for 96% of the total transaction volume. The share of foreign capital in the volume of investment transactions decreased to 4% from 15% last year. However, we see high investment activity of foreign funds already represented on the Russian market, as well as additional capital inflow. A landmark deal involving foreign capital was the acquisition by the Arab fund Mubadala, together with RDIF, of warehouse buildings in two projects PNK Sheremetyevo and PNK Chekhov 3.

The leaders in terms of investment volume at the end of the year will be the office segment (44%) and hotels (17%). Moreover, the share of hotels this year is a record high over the past 10 years. Also in 2016, a high share of the residential segment was recorded (11%) - developers were actively buying sites for housing construction. The share of retail and warehouse real estate will be 18% and 4%, respectively.

The number of market investment transactions continues to be limited by the significant difference in price expectations between buyers and sellers, which constrains the closing of transactions

According to experts, the amount of equity capital available for investing in commercial real estate is about $3.5 billion (more than 50% of which is money from foreign investors), and another about $1 billion for investing in housing. Including leverage, more than $10 billion is seeking real estate investment opportunities.

Against the backdrop of established stability and expectations of a gradual economic and market recovery, as well as an understanding of the available capital in the market in 2017, the volume of investment, according to CBRE forecasts, may increase to US$5 billion. The main driver of growth in this case will be continued stability and the beginning of a new cycle, within which investors have good profitability potential.

Office real estate

Elena Denisova, senior director, head of the office premises department at CBRE, believes that the first half of 2016 was influenced by trends formed in 2015: the demand for office real estate was supported by large transactions carried out by government agencies or companies with state participation, often of a non-market nature and were related to the settlement of debt obligations. Such transactions include the transition of the Eurasia Tower to VTB, the President Plaza Business Center to Sberbank.

Since the second half of 2016, indicators of the state of demand for commercial real estate have improved - there has been a tendency to increase the volume of new transactions concluded on market conditions

Another positive and significant moment for the office real estate market in 2016 was the decrease in vacancy rates. The share of vacant premises decreased most noticeably in the class A office segment: at the end of 2015, the vacancy rate here was 26%; at the end of this year, according to analysts, it will drop to 19.8%. In 2017, experts predict stability of vacancies in this class, since a number of large business centers are planned for commissioning. In class B, a more significant reduction in the share of vacant space is possible - from 15.2% at the end of 2016 to 14% in 2017.

According to CBRE estimates, the volume of new space commissioned at the end of 2016 will be 355,000 sq. m. m, which is two times lower than last year’s figure. In 2017, according to announced announcements, 440,000 sq. m. will be commissioned. m of new office offer. It is noteworthy that the main volume will be in Moscow City (210,000 sq. m) and the Central Business District of the capital (100,000 sq. m). The limited introduction of new high-quality facilities contributes to the further “washing out” of high-quality products from the market for large users.

Rental rates for office real estate are stable, and at the end of 2016 they will remain in the following ranges: for class A Prime - $800 - 900 per sq. m. m per year, for class A - 18,000 - 35,000 rubles. per sq. m per year, for class B - 13,000 - 28,000 rubles. per sq. m per year (all rates are excluding operating expenses and VAT).

In 2017, the nomination of requested rental rates will remain predominantly in rubles, and with the gradual normalization of the external background, an increase in rates in ruble terms by 5-10% is possible.

Warehouse real estate

According to Anton Alyabyev, director of the industrial and warehouse real estate department at CBRE, 2016 was a transitional year for warehouse real estate - from a slowdown phase to a phase of further stabilization of the market.

Economic fluctuations at the beginning of the year caused the implementation of a number of transactions to be postponed to a later date, which was reflected in low demand volumes in the second and third quarters of 2016. However, towards the end of the year there was a recovery in business activity: the volume of transactions with warehouses in the fourth quarter could reach 300,000 sq. m. m, which is the highest figure for the year.

In parallel with fluctuations in demand, there was a change in the trend in the movement of key market indicators - the share of free warehouse space and rental rates. The increase in vacancies at the beginning of the second quarter, which occurred due to the entry of end-user warehouse facilities into the market, quickly faded away. The share of free warehouses has remained stable over the past 6 months. At the same time, rental rates for warehouse space have remained at the same level for three quarters.

In 2016, CBRE analysts saw the emergence of new trends in the structure of supply and demand. Business activity is increasingly stimulated by new drivers - the move from old warehouse facilities to better ones, the transition from the premises of logistics operators to direct lease and the consolidation of warehouse capacity in large distribution centers.

These changes in the nature of demand, in turn, stimulated differentiation of supply. Developers offer different solutions for different categories of clients. These could be high-tech built-to-suit warehouses designed for the needs of large businesses that continue to grow. For companies that would like to move to a new quality building, but are more limited in financial resources, standardized Class A warehouses with a basic set of specifications are offered.

In 2017, the market will continue to operate in the current environment. The volume of commissioning will be further reduced, and new buildings will mainly be built for the client. The annual rate of new supply is expected to be 500-600 thousand sq. m. m.

The projected volume of transactions in the warehouse market in 2017 may be at least 800,000 sq. m. m. The market stabilization that has occurred creates the preconditions for a gradual increase in business activity. In the second half of the year, we may see positive changes in market dynamics in the form of a gradual decrease in vacancy and an increase in rental rates for warehouses.

Retail premises, Moscow

Marina Malakhatko, director of the retail space department at CBRE in Moscow, believes that the volume of retail space commissioned in Moscow in 2016 will be about 427,000 sq. m. m, which is 3% less than in 2015. This volume is significant for the market, and the commissioning of 7 new properties caused a short-term increase in vacancies in the retail real estate market during the year, which increased to 11.4% by the third quarter. But by the end of this year, it is expected to decrease systematically, and, thanks to the reduction in input volume, to reach 10% in the first half of 2017.

The total supply of quality shopping centers in Moscow by the end of the year will be 5.6 million sq. m. m, and the provision of retail space is 456 sq. m. m per 1000 people.

New retail properties opened with a good occupancy level: in shopping centers in 2016, the vacancy level varied from 20-40%, while last year facilities opened with 50-80% vacancy. The number of retailers leaving the Russian market has decreased significantly: 2 brands in 2016 versus 11 in 2015

In 2017, a further decrease in the pace of commissioning of retail space is expected: about 273,000 sq. m. are announced for opening. m, which is 36% less than the volume of 2016. At the same time, one of the objects for next year - Butovo Mall (54,000 sq. m GLA), was originally announced for opening in 2016.

Among the largest shopping centers in 2016, it is worth noting Riviera (91,200 sq. m GLA), Oceania (60,000 sq. m GLA) and Good! (53,000 sq. m), Metropolis phase 2 (38,000 sq. m GLA). Vacancy rates at opening for new properties vary greatly depending on location and concept. On average, new retail properties opened with a good occupancy level: in shopping centers in 2016, the vacancy level varied from 20-40%, while last year facilities opened with 50-80% vacancy.

Over the 11 months of 2016, 32 international brands entered the Moscow market, and another 5 are planning to open their first stores in the capital by the end of the year. This is comparable to the figure for 2015, when 40 international brands entered the Moscow market. It is worth noting that the number of retailers leaving the market has decreased significantly: 2 brands in 2016 versus 11 in 2015.

The prime rental rate for retail space in Moscow was 100,000 rubles per sq. m. m per year, practically unchanged compared to 2015. In 2017, CBRE experts predict that rates will remain stable due to the relatively high vacancy rate of retail space.

Rental rates in shopping centers are finally denominated in rubles, or an exchange rate corridor is fixed. The owners are ready to provide discounts for the first year of rent, with a gradual increase in the rate in subsequent years. The form of interaction with the owner of a retail facility in the format of a percentage of turnover is an increasingly common and more comfortable practice for retailers, and is no longer used only for anchors, but also for medium-sized tenants of all profiles. A variety of schemes for structuring rental rates allow owners and tenants to find a compromise by choosing an acceptable option for commercial conditions within the framework of emerging market practice. The latter, in turn, is strongly tied to the turnover of retailers.

At the end of 2016, the turnover of luxury and economy class retailers in Moscow increased, in some cases the growth reached 30%. Mid-level retailers showed minimal growth in turnover at the end of the year

Retail premises in Russian regions

According to Mikhail Rogozhin, director of the regional retail space department at CBRE, at the end of 2016, the increase in retail space in Russia will be about 1.2 million square meters. m, of which 58% (719,000 sq. m) were introduced in regional cities, excluding St. Petersburg. The total volume of retail space commissioned in Russia decreased by 28% compared to the previous year, and in the regions - by 40%. Among the largest new regional centers in 2016, it is worth noting MegaGrinn in Kursk (129,000 sq. m GLA), Maxi in Arkhangelsk (49,200 sq. m GLA), Sedanka City in Vladivostok (45,000 sq. m GLA).

The share of vacant retail space in Russian regions varies greatly from city to city. The average vacancy rate for million-plus cities today is 8-10%. But, as a rule, in every city there are projects with a good location and a strong tenant mix, in which the occupancy rate is close to 100%

In 2017, regional cities are expected to further reduce the volume of new retail space commissioned - to 637,000 sq. m. m, which is 11% less than in 2016. At the same time, some objects of 2017 were initially announced for commissioning in 2016, but subsequently the dates were postponed.

In general, it is worth noting the high potential for the development of the retail real estate market in cities with a low supply of quality retail facilities in the presence of good purchasing power of the population. Such cities today include Khabarovsk, Chita, Stavropol, Makhachkala, Noyabrsk and others.

The share of vacant retail space in the regions of the Russian Federation varies greatly from city to city and depending on the quality and location of the property. The average vacancy rate for cities with a population of over a million today is 8-10%, which is slightly higher than the vacancy level in 2015 of 7-8%. But, as a rule, in every city there are projects with a good location and a strong tenant mix, in which the occupancy rate is close to 100%.

Among the retailers represented in the regions, the most active in 2016 were the Lenta, X5 Retail, and Magnit grocery chains. At the beginning of the year, they announced ambitious plans for development in Moscow and the regions: Lenta - 40 hypermarkets, Pyaterochka - 1000 stores, Magnit - 950 stores and 80 hypermarkets. The current state of the market has allowed the networks to successfully implement their announced expansion plans. DIY retailers Leroy Merlin and OBI, electronics stores M.Video and Eldorado, and children's goods store chains Detsky Mir and Dochki-Synochki are also developing quite actively in regional cities.

Hotels

Stanislav Ivashkevich, Deputy Director for Development, Hospitality Industry, CBRE, believes that the main factor influencing the Moscow hotel market in 2016 was the growth of tourist traffic. According to preliminary data, by the end of the year the number of tourists in Moscow alone will be about 17.5 million people, the share of tourism consumption in the capital’s GRP will exceed 4% and could reach 470 billion rubles. Thus, of this volume, the share of hotel revenues could be about 60 billion rubles by the end of the year.

During 2016, the number of hotels managed by international chains increased by 3,772 rooms. The largest new hotel this year in Moscow was the Accor complex, which opened three hotels on Kievskaya Square: Ibis, Adagio, Novotel with a total of 701 rooms. Of the main regional openings, it is worth highlighting two large Marriott hotels in Krasnodar and Voronezh

Despite the fact that the overwhelming majority of tourists are Russians (70-75%), the increase in the flow of foreign tourists is now also really noticeable, as is the fact that it is happening primarily due to the Asian market in general and Chinese tourists in particular . According to Rostourism estimates, the increase in flow due to this group of tourists alone will be about 40% by the end of 2016.
Thus, in 2016, occupancy rates in Moscow hotels reached record levels, exceeding 70% in certain segments. The increase in occupancy, in turn, caused an increase in hotel rates, increasing the average ADR by 8% over 9 months of 2016.
The most strikingly positive dynamics of the average cost of a room was manifested in the segment of high-quality expensive hotels, where the most significant increase in ADR to the level of 20-22 thousand rubles was recorded in the group of leaders in this segment (for example, such premium hotels as Hyatt, Baltschug Kempinski, Four Seasons ).

At the same time, most hotels in the luxury segment are cautious and do not increase ADR, keeping it at the level of 12-15 thousand rubles. Thus, in the segment of the most expensive hotels, ADR now averages about 18 thousand rubles.
In the “average” and “below average” segments, there was no increase in accommodation rates in 2016. There are still strong dumping sentiments in the hotel market, and therefore many hoteliers have not raised prices, regardless of the growth in demand.

During 2016, the number of hotels managed by international chains increased by 3,772 rooms, of which 1,511 belonged to the Moscow region. The largest new hotel this year in Moscow was the Accor complex, which opened three hotels on Kievskaya Square: Ibis, Adagio, Novotel with a total of 701 rooms. Of the main regional openings, it is worth highlighting two large hotels of the Marriott chain in Krasnodar and Voronezh.

For 2017, 11 hotels have been announced in Russia under the management of international brands with a total room capacity of 2,566, of which 3 hotels are to be opened in Moscow: Four Points By Sheraton at Vnukovo Airport, Radisson Blu at the Novion MFC on Olimpiysky Prospekt and Hyatt Regency VTB Arena Petrovsky Park as part of the complex development of VTB Dynamo on Leningradsky Prospekt.

Review prepared by CBRE