15.07.2019

A report from JLL reveals that the level of investment into Russia’s real estate was up by almost a quarter (24%) year-on-year in the first half of 2019 to $1.6 billion.

“Growth in the first half of this year can be explained by the closure of several large transactions. Increased stability in the financial markets and the CBR easing monetary policy are helping the recovery of real estate investment market activity,” said Natalia Tischendorf, head of capital markets at JLL Russia & CIS. “Additionally, investor attention is attracted by the positive spread between current prime yields and bank financing costs in rubles, which appeared approximately one year ago for the first time in Russia real estate market. It is expected that the key rate will be cut further this year, which will result in a further decline of interest rates for senior debt. This will positively affect the investment market.”

The office sector received the most investor attention in the first half of this year, taking a third (35%) of the total investements. The largest office deals in the second quarter were the sales of building 3 in the office complex Aquamarine and the purchase of an asset portfolio in Moscow by Avangard Bank.

The share of Moscow increased from 56% in the 1st half of 2018 to 72% in the 1st half of 2019, while the share of St. Petersburg remained at the level of the 1st quarter of 2019. 

The share of transactions involving foreign capital in Russia decreased (12% compared with 28% a year earlier), which reflects the global downward trend  in foreign investment.

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