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Moscow

Moscow is in Top Global Capitals by the Real Estate Investment Volume

Russian total performance is 6 times behind the European one


Moscow, 11 April 2013 – In the end of 2012 Russian capital debuted in the top 10 global cities in terms of real estate investment volume, according to Jones Lang LaSalle data presented at the Webinar, Moscow real estate on the global investment map. With USD3bn volume of transactions in Q4 2012 Moscow caught up Washington, and now two cities are sharing 8th and 9th ranks.

The biggest global cities by the real estate investment volume* (Q4 2012)
The biggest global cities by the real estate investment volume (Q4 2012).png
*The investment volume does not consider transactions with properties under construction

Source: Jones Lang LaSalle

Tom Devonshire-Griffin, Regional Director, Head of Capital Markets, commented during the webinar: “Last year was very successful with the total investment volume of USD8.7bn. Q1 2013 also turned out to be quite dynamic due to a record transaction, and therefore Moscow can expect to get high rank position again. However, the overall result of the current year may be lower, around USD7.5bn. The rationale behind that is not about the investor interest, it is really about the product. Record figures are due to large deals, and the market does not forecast any similar ones in the near future.”

Russian record performance of USD7-8bn is not so impressive compared to other European countries. Thus, in the past year the transactions totaling USD52bn were closed in UK that is 6 times above the Russian result, in Germany – USD31bn (3.6 times), in France – USD21bn (2.4 times). At the same time the investors’ interest in Russia is particularly concentrated in the capital – Moscow share in the total investment volume often exceeds 90%. For example, in Poland 57% of all deals are closed in Warsaw, in UK – 59% are done in London.

Investment volume: European comparison
Investment volume - European comparison.png
Source: Jones Lang LaSalle

During the webinar Tom Devonshire-Griffin said: “At present Russian real estate investments account for only 0.4% of GDP while in the UK – 2.1%. Thereby, Russian market has a significant growth potential. We consider the opportunity of the total increase in investment volume due to two market segments – logistics and regional retail. At the moment industrial assets have a 6% share in the total real estate investment volume while globally this comes up to 13%. The investment share in the Russian retail market approximately corresponds global analogues, however the main volume is concentrated in Moscow. With the introduction of new high-quality and attractive for investors shopping centres in the regions, the total investment volume in this segment will be increasing. As a result, not only the overall real estate investments will grow, but the ratio of capital to regional deals will approach the European performance as well.”

Investment volume breakdown by sector, 2012 – Q1 2013*
Investment volume breakdown by sector, 2012 – Q1 2013.png

 

*Russia – inside pie, Global – outside pie

Source: Jones Lang LaSalle


About Jones Lang LaSalle
Jones Lang LaSalle (NYSE:JLL) is a professional services and investment management firm offering specialized real estate services to clients seeking increased value by owning, occupying and investing in real estate. With annual revenue of $3.9 billion, Jones Lang LaSalle operates in 70 countries from more than 1,000 locations worldwide. On behalf of its clients, the firm provides management and real estate outsourcing services to a property portfolio of 242 million square meters. Its investment management business, LaSalle Investment Management, has $47.0 billion of real estate assets under management.
In Russia and CIS Jones Lang LaSalle have offices in Moscow, St. Petersburg, Kiev and Aktau. Jones Lang LaSalle, Russia was voted Consultant of the Year in 2004, 2006, 2007, 2008, 2009, 2010, 2011 and 2012 at the Commercial Real Estate Awards, Moscow and Consultant of the Year at the Commercial Real Estate Awards 2009, St. Petersburg. For further information, please visit www.jll.ru