CBRE Group, Inc. (NYSE:CBG), an S&P 500 and FORTUNE 500 company, is the world’s largest commercial real estate services firm.
CBRE Russia: company information
Bringing together unmatched international expertise and thorough understanding of local business needs, we carry out ambitious projects with regards to changing market conditions and support the highest quality standards of our services.
Our historical roots go back to 1773. We are now the leading professional consulting firm in commercial real estate in the world with more than 75,000 employees in more than 450 offices worldwide (excluding affiliate and partner offices). CBRE Group, Inc. (NYSE:CBG) is headquartered in Los Angeles.
CBRE has been operating in Russia for already 23 years since 1994. We have established offices in Moscow and St. Petersburg.
CBRE global platform is reflected in the most comprehensive portfolio of integrated services:
Russian real estate investment market with a total of $4.9 bln in 2017 has recorded a 3-year maximum with a 9% growth Y-O-Y. To compare, 2016 investment volume totaled $4.6 bln, 2015 - $3.3 bln.
Due to a number of large transactions closed in 2017 retail segment is responsible for a prevailing 32% share in the total investment volume, first time since 2013. Retail segment has experienced the largest in 2017, as well as one of the largest in Russian market transaction on the purchase of Immofinanz shopping centres portfolio. Office real estate segment was second in terms of investment share with 29% in the total investment volume. Industrial and hotel segments were responsible for 10% and 6% respectively.
The volume of overseas investments has reached $785 million in 2017 which is 16% in the total investment volume. Foreign investments has recorded a 4.4 times volume growth and 12 percentage points increase compared to the 2016 historically the lowest result in terms of foreign investors activity.
New construction grew 4 times compared to its Q2 value and amounted to 278,000 sq m. More than 80% of new space was leased before commissioning. 62% of new supply represents built-to-suit buildings.
161,000 sq m of warehouse space was taken-up in Q3 2017, which is 2.9 times higher compared to Q2. In Q1-Q3 2017 business activity of retailers continued to be a key driver for demand growth. FMCG & Food prevailed in take-up structure by goods type.
Total vacant space decreased to 450,000 sq m, accounting for only 7.1% of total stock.
Weighted average gross rental rate for A class warehouse reached 5,100 RUB/sq m/year exceeding its 2016 value by 4%.
In Q3 2017, 74,600 sq m were commissioned on the Moscow office market. This volume is the largest quarterly increase since the beginning of the year, however it is 9% lower than the value was in the same period of 2016.
The low new supply volume contributes to the continuing overall vacancy rate reduction. In Q3 2017 this indicator decreased by 0.8 ppts from 15.4% at the end of H1 2017 to 14.6%.
In Q3 2017, take-up is amounted to 255,000 sq m, which is 11% above the value in Q3 2016 and 21% higher than the volume in Q3 2015.
Ranges of asking rental rates remained stable in Q3 2017, but vacancy rate decrease and gradual equalization of the supply and demand balance in the Moscow office market will begin to influence the level of rates that may increase by 3-5% by the end of the year.
In Q1-Q3 2017 real estate investment volume amounted to $ 2.5 billion 35% of which accounted for Q3 2017. Thus, this indicator decreased by 27% compared to Q1-Q3 2016.
Foreign investors activity is increasing on the Russian market. In Q1-Q3 2017, the volume of investment transactions involving foreign capital increased 4.8 times compared to the same period of last year and leveled at $562 million that is 24% in the structure of investments, against 3.4% in January-September 2016.
Investment activity beyond the Moscow region was formed primarily by investment acquisition in St. Petersburg real estate market. Despite the much lower investment volumes compared to the Moscow region, in Q1-Q3 2017 the share of St. Petersburg and the Leningrad Region in investments structure increased up to 24% compared to 10% in the same period of 2016.
Capitalization rates in all segments of commercial real estate have adjusted compared to the beginning of 2017. The compression occurred due to Central Bank key rate reduction and real estate rental flows stabilization.