|
contents | business | |||||||||
| Demand for Class A offices declining in St. Petersburg The independent real estates consultation group NAI apollo lights up this week in collaboration with the international NAI network the real estate location St. Petersburg. St. Petersburg is Russia's second most important economic, scientific and cultural center after Moscow. It's the fourth largest megalopolis of Europe, a major trade gateway, financial and industrial center of Russia specializing in oil and gas trade, shipbuilding yards, aerospace, radio and electronics, mining, software and computers. _ The demand for Class A and B offices has been growing significantly over 2008 due to many western companies coming to this market. Rental rates are rising, but remain behind the level seen in Moscow. The Class A market still is structurally under-supplied and many new business center developments are expected over the coming years. _ With many new projects in the pipeline, the industrial market is destrined to be over-supplied soon for the first time in many years. The liquidity crisis led to many projects being frozen, and will counterbalance this effect over the next months. Vacancy rates around 7-10 per cent are much higher than in Moscow (lower than 2 per cent) and rental rates are declining for the first time in many years. _ Demand for high-quality retail space continues to increase due to many international and large Russian retailers moving to the St. Petersburg region. The total inventory of retail space is approximately 35 million SF, (second only to Moscow) and the tendency is to build larger malls (400,000 to 850,000 SF). The retail market in St Petersburg is attracting an increasing number of foreign investors looking for higher capitalization rates than in Moscow, with similar expected risk. _ St. Petersburg remains the second most attractive market for foreign investors after Moscow. Yields generally are 1-1.5 per cent higher than in Moscow for comparable assets, and sometimes lower risks. Office and retail markets still are largely undersupplied, but we expect the market to be saturated within five to ten years, depending on how the liquidity crisis impacts current and future projects. write your comments about the article :: © 2009 Construction News :: home page |