The Russian investment market in 2010 grew 128% above the level reached in 2009 to EUR 2.2 bn, according to the latest research by CB Richard Ellis. The stabilisation of the Russian economy in 2010, with growth of 4%, saw a level of confidence return to the real estate investment market.
The Russian investment market in 2010 grew 128% above the level reached in 2009 to EUR 2.2 bn, according to the latest research by CB Richard Ellis. The stabilisation of the Russian economy in 2010, with growth of 4%, saw a level of confidence return to the real estate investment market.
Domestic investors continued to pre-dominate. The volume of transactions was still low in 2010 compared with the pre-crisis years 2008. There were 27 investment deals in 2010, compared with 50 in 2008.The average deal size was about EUR 80 mln. This compares with an average deal size of EUR 71 mln in 2008.
The largest deal in 2010, as in 2009, was a portfolio investment involving the sale of five office properties in Moscow by HorusCapital, a Russian developer, to Lenmar Capital (controlled by Otkrytie, a Russian financial corporation), for an estimated EUR 691 mln.
According to CB Richard Ellis, office and retail will remain the most attractive sub-sectors in Russian investment market in 2011.
Foreign investors are still less confident in Russia than their domestic counterparts. The most notable large-scale deal involving foreign investment was the purchase of Greenwood Business Park, totalling 130,000 m2 by the Chinese Centre for the Development of Trade and Management of Investment into Europe for EUR 285 mln. It was the first transaction by Chinese investors in Russian real estate.
Compared with other markets in Central and Eastern Europe, Russia attracted the largest amount of real estate investment. Poland attracted EUR 1.8 bn, the Czech Republic EUR 613 mln and Hungary EUR 177 mln.
However, Moscow remains extremely undersupplied with international investment grade objects, a situation exacerbated by the economic crisis which led to a freeze on new developments, thus reducing the amount of new stock which will come online in 2011 - 2012. Nevertheless, CBRE expects that the investment volume will continue to rise in 2011, though domestic investors will once again predominate.
