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News Release

Moscow

Real Estate Investment market in Russia: 2011 Results and 2012 Outlook


Moscow, 15 February 2012 – Jones Lang LaSalle announces 2011 results and outlook for 2012 in Russian real estate investment market. Investment volume into real estate was record high in Russia, with the total volume of closed deals up 73% YoY in 2011, to USD8.4 bn. Commercial real estate investments doubled in 2011 vs 2010, to USD8.3 bn.

We expect slightly lower real estate investment volume this year, at USD6.5 bn. Anyway, it will be higher than pre-crisis annual volumes.

Last year in Russia was marked by the real closures of deals that included foreign capital, with the latter accounting for 41% of the total 2011 volume, compared with 14% in 2010. At the same time, local investors accounted for 58% of the total 2011 investment volume. The activity of foreign investors is likely to decrease this year, and Russians will again dominate in the market. The latter will be mainly represented by high net worth individuals and equity purchasers.

Deal size increased in 2011 compared to 2010, with 32% of transactions’ number were over USD100 mn vs 23% in 2010. Investors are still mostly focused on income producing standing assets, their share accounted for 82% of all completed deals in 2011, including purchases for own occupation.

Sector wise, investments were bilaterally diversified in 2011. Retail and office segments attracted the bulk of investments – 40% of 2011 total investment volume each. At the same time, several large investment deals were closed in warehouse and hotel sectors to result at 5.4% and 9.7% shares respectively. We expect offices and warehouses to be the investor points of interest in 2012. And this is explained by availability of quality office product in the market and several warehouse deals in the pipeline.

Global economy, and especially debt crisis in Europe will be the driving force of the investment market this year. International investors will apply wait-and-see attitude, with a closer look at European situation and global economy performance, which will spread to Russia and not only from internationals, but from Russians as well.

Olesya Cherdantseva, Head of Retail and Capital Markets Research, Jones Lang LaSalle, Russia and CIS, added: “After previous year of positive market with high leasing activity, available bank financing, internationals closing real deals, we will have slightly tighter year. Although leasing activity is keeping the pace, financing is becoming more expensive and less available that will pressure the real estate yields”.


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