Moscow office completions slump to 10-year low

Office property completions in Moscow slumped to a 10-year low in 2012, according to Jones Lang LaSalle.

About 162,500 m2 of new supply was launched on the market in the fourth quarter, the property adviser said.

This represents a 9% decline on a quarter-on-quarter basis with the annual cumulative figure amounting to 557,000 m2, which was down 33% on a year-on-year basis.

Jones Lang LaSalle said that new completions recorded their lowest level in 2012 during the last 10 years and was four times lower than the 2.1m sq m peak in 2008

The CBD submarket received only 18% of this new supply, reaffirming once again the decentralization on the Moscow office market.

Take-up in the fourth quarter amounted to 605,000 m2 (23% growth compared with Q4 2011), with the year-to-date figure aggregating to 1.5m m2 . Some 90% of the executed deals were for Class A and B+ space.

JL said the record low new supply alongside stable high demand pushed the vacancy rate downward in Moscow to an overage figure of 13.5%.