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News Release

Moscow

Investment into Retail Real Estate Dominated Q1 2013 in Russia

Jones Lang LaSalle announces Q1 2013 results


Moscow, 10 April 2013 – Total investment volume in Russia reached USD2.1bn in Q1 2013, up 116% compared with Q1 2012, according to Jones Lang LaSalle analysts. As a result, a record high volume has been registered in Q1 2013 compared to the first quarters of previous years. This was mainly a result of Metropolis shopping centre deal closure.

Olesya Dzuba, Head of Capital Markets Research, Jones Lang LaSalle, Russia & CIS, added: “Several large deals, which were postponed from Q4 2012, were allowed a good start and abled us to set a new record. The closure of some more large deals closure is expected this year. Diversification among sectors is still the rule and every sector has deals under active marketing or negotiation.”

Russian Real Estate Investment Volume Dynamics, USD bn*
Russian Real Estate Investment Volume Dynamics, USD bn.png
* Investment deals, excluding land purchases, JVs, direct residential sales to end-users

Source: Jones Lang LaSalle

The sale of Metropolis shopping centre has significantly changed the overall characteristics of the market.

Historically investment into offices dominated the market. The situation has changed in Q1 2013 – real estate investments were concentrated in retail, accounting for 60%, compared to 37% in Q1 2012. While office investment accounted for 35% compared to 43% in Q1 2012. 

Total investments by real estate sectorTotal investments by real estate sector Q1 2012.png

Thus, Russian investments were even more concentrated in Moscow in Q1 2013, accounting for 96% of total deal volume vs 87% in Q1 2012. Traditional domestic capital domination changed to foreign, with their share being at 82% compared to 6% in Q1 2012.

Olesya Dzuba added: “Cyprus’s financial issues has been one of the most significant events recently. We saw that some companies already began shifting into other offshore territories. However, current legislation changes do not foresee any changes in the double tax treaty, thus many will prefer to stay in Cyprus to avoid costs of transferring to other territories, as well as continuing in a well-known legal and deal structure. We believe, this situation will not have negative effect on the investment market and confirm our previous forecast for this year at USD7.5bn.”


About Jones Lang LaSalle
Jones Lang LaSalle (NYSE:JLL) is a professional services and investment management firm offering specialized real estate services to clients seeking increased value by owning, occupying and investing in real estate. With annual revenue of $3.9 billion, Jones Lang LaSalle operates in 70 countries from more than 1,000 locations worldwide. On behalf of its clients, the firm provides management and real estate outsourcing services to a property portfolio of 242 million square metres. Its investment management business, LaSalle Investment Management, has $47.0 billion of real estate assets under management.
In Russia and CIS Jones Lang LaSalle have offices in Moscow, St. Petersburg, Kiev and Aktau. Jones Lang LaSalle, Russia was voted Consultant of the Year in 2004, 2006, 2007, 2008, 2009, 2010, 2011 and 2012 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 www.jll.ru