Demand for office properties in Russia slowed down significantly over the last two months and vacant space has increased by 50%, according to the latest Market View research report released by Cushman & Wakefield's Russian office. The volume of vacant premises in existing buildings grew from 1 million m[sup]2[/sup] in mid-September to about 1.5 million m[sup]2[/sup] in mid-November, the property advisor said.
Demand for office properties in Russia slowed down significantly over the last two months and vacant space has increased by 50%, according to the latest Market View research report released by Cushman & Wakefield's Russian office. The volume of vacant premises in existing buildings grew from 1 million m2 in mid-September to about 1.5 million m2 in mid-November, the property advisor said.
'If two weeks ago we only just started anticipating decreases in rents, now this trend is apparent with rental rates and prices falling rapidly,' C&W Stiles & Riabokobylko said.
Rental rates decreased on average by 20% in the month of November, as demand for office space experienced a sharp fall in the country. Additionally, C&W said a number of real estate companies are looking to offload their real estate to improve their financial position.
Macromir, a Russian retail developer and investor, recently halted its development activities and is planning to sell its development portfolio in the country worth some $ 1 bn. Enka, a Turkish developer, is putting 18 Ramstore supermarkets up for sale for $110-110 mln. The Bank Societe General Vostok (BSGV) was hired to carry out the sale process.
RTM, a Russian residential and commercial property developer founded in 2006, has also announced plans to sell part of its real estate portfolio. The company is putting around 16% of its total portfolio on the market in a move aimed at shoring up its finances. The firm owns 56 assets and projects with a total of 558,000 m2 of space in Russia. It hopes to fetch up to $ 300 mln for the 90,000 m2 up for sale, which will be used to refinance its debt. RTM, with net debt of $482 mln, is also freezing most of its development projects and launching a substantial cost reduction programme. The company said it is negotiating with a number of creditors regarding their participation in particular projects as co-investors.
Russian Land confirmed last week that it has halted work on its flagship Russia Tower project and put other developments on hold due to the credit crisis. The 612-metre Russia Tower designed by Norman Foster would be the tallest building in Europe if and when completed.
