commercial real estate investments in Russia

Investments in commercial real estate in Russia and mortgage market conditions

At the end of 2018, investment in commercial real estate in Russia amounted to 248.1 billion rubles, which is 1.5 billion rubles less than in 2017. In addition to a slight decrease in the financial flow, experts are seeing a change in the vector of interest of investors from commercial to office real estate. Thus, offices received 47% of all investments, and retail space – 30%. It is noteworthy that over the past year the share of foreign investment in Russian real estate has increased – by 11 points, up to 24% of all investments. These are the highest figures since 2014, when the share of Western capital was 39%. And, importantly, all this is happening despite the sanctions of the U.S. and Europe, when foreign capital seemed to have had to reverse the outflow. Investors from Kirghizia invested the most in domestic offices, participated in the acquisition of RC “Riviera”. In addition, the UAE, the Czech Republic, France, Finland and even America made a great contribution to the economy of our country.
As for the structure of financial investments by region, the Moscow Region is without doubt the leader with 74% of all investments. St. Petersburg took 21%, and the remaining 5% went to other regions.
In 2017 among investors in office real estate profile companies with a share of 32 % were in the lead, now banks with 33 % came out in leaders. Analysts explain that the reason for such changes was several major deals conducted with the help of VEB, Sberbank and Otkrytiya. However, private investors became less active and invested only 2% this year. In the new year, experts expect a slight increase in the volume of commercial investment in Russia – by about 10%, to 280 billion rubles.

Investments in Commercial Real Estate in Russia and Residential Market

During the first half of 2018, the whole country was happy to observe the drop in mortgage rates, and during the second half of the year – was terrified of a sharp increase. Analysts have calculated that the volume of mortgage loans has been growing over the past year. The growth amounted to about 50% by the end of 2017 – in just 10 months of 2018, 1.17 million mortgages worth almost 2.5 trillion rubles were issued. Back in 2017, mortgage loans grew by 30% and experts started talking about the “bubble” – and continue to talk now, although most participants in this market still hope for the best.

It is interesting that buyers are trying to reduce the budget for the purchase of real estate, and almost do not use the accumulated money – they literally do not have it. Increasingly used money from maternity capital, which confirms the hypothesis that citizens do not have “live” money. In the market there is the implementation of deferred demand, and more and more people are choosing mortgage programs without a down payment, as well as programs where you do not need to provide income certificates and proof of official employment.