Signs of economic diversity beyond oil and gas resources are appearing in Russia which should help drive occupational growth in its main office markets.

Signs of economic diversity beyond oil and gas resources are appearing in Russia which should help drive occupational growth in its main office markets.

Growth in the banking, finance, IT and telecommunications industries is helping to fuel demand for office space in Moscow and St Petersburg, according to research from Colliers International which was presented at PropertyEU’s Russia Investment Briefing in London earlier this month.

A deal in 2013 for 50,000 m2 of Moscow office space by Yandex, the country’s largest internet and telecoms operator, is a prime example.

The expansion of non-energy-related sectors should help stem the slowdown in Russia’s economic growth rate - to between 1.5 and 2% - which has set in as a result of lower oil prices and higher domestic supply in the US, the briefing heard.

The economic slowdown has affected rental conditions, particularly in the major cities. The office markets in Moscow and St Petersburg are showing signs of stagnation with demand falling and vacancy rising, according to Colliers’ analysis.

Investing through a fund or through public companies with local activity is the best way to get into the Russian market for the majority of foreign investors, according to Gordon Black, co-head of Europe at Heitman.