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News Release

Moscow

Beating the record

Russian real estate investment volume in Q1-Q3 2011 is up 80%


Moscow, 18 October 2011 – Jones Lang LaSalle is announcing Q3 2011 Russian real estate investment market results. This year investment volume in Russia will be record high. The total volume of Q1-Q3 2011 investment in Russia is up 80% YoY, to $5.25 bn.

Commercial real estate investments increased 134% YoY in Q1-Q3 2011, to $5.14 bn compared to $2.2 bn in Q1-Q3 2010. We expect a further increase in real estate investment volumes in 2011, with the annual volume reaching $7.0 bn, moreover, if all the deals currently under active marketing are closed, volumes could possibly increase to even $8.5 bn.

Q1-Q3 2011 in Russia was marked by the real closures of deals that included foreign capital components. Foreign investor activity increased remarkably in Q1-Q3 2011, comprising 44% of the total Q1-Q3 2011 investment volume, compared with 14% in 2010. At the same time local investors continued to demonstrate significant activity, accounting for 56% of the total Q1-Q3 2011 investment volume.

Sector wise, investments were much diversified. Retail and office segments attracted the bulk of investments – 40% of Q1-Q3 2011 total investment volume each. Moreover, deals’ size increased this year: in Q1-Q3 2011 the number of deals of size exceeding $100 mn increased to 33% of total number of deals vs. 23% in 2010.

Investors are still mostly focused on prime standing assets, their share accounted for 85% of all completed deals in Q1-Q3 2011, including purchases for own occupation.

Sector yields stabilized at the same levels as in Q2 2011. Moscow office and retail yields comprised 9.0% for both sectors in Q3 2011. Warehouse yields remained at 11.0%. Prime yields for office and shopping centers in St. Petersburg comprised 10.0% for both sectors. St. Petersburg warehouse yields remained at 13.5%.

Olesya Cherdantseva, Head of Retail and Capital Markets Research, Jones Lang LaSalle, Russia and CIS, added: “We expect record investment volumes as there is a list of deals, that are currently under active marketing or closing, with the total volume exceeding $3 bn. Slight decrease to $6 bn, that we expect in the following year, represents real market’s size: most of institutional assets are changing their owners this year, thus, despite a decline, such investment volume dynamics is positive compared to 2010 and after extraordinary 2011.”


About Jones Lang LaSalle
Jones Lang LaSalle (NYSE:JLL) is a financial and professional services firm specializing in real estate. The firm offers integrated services delivered by expert teams worldwide to clients seeking increased value by owning, occupying or investing in real estate. With 2010 global revenue of more than $2.9 billion, Jones Lang LaSalle serves clients in 70 countries from more than 1,000 locations worldwide, including 200 corporate offices.  The firm is an industry leader in property and corporate facility management services, with a portfolio of approximately 1.8 billion square feet worldwide. LaSalle Investment Management, the company’s investment management business, is one of the world’s largest and most diverse in real estate with $45.3 billion of assets under management.
In Russia and CIS Jones Lang LaSalle have offices in Moscow, St. Petersburg and Kiev. Jones Lang LaSalle, Russia was voted Consultant of the Year in 2004, 2006, 2007, 2008, 2009, 2010 and 2011 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 our web site www.joneslanglasalle.ru