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​Moscow

Regional Investment Share is Increasing: Shopping Centers and Hotels are the Priority

Jones Lang LaSalle announces H1 2013 real estate investment market results


​Moscow, 4 July 2013 – In H1 2013 Russian real estate investment market increased by 31% compared to the same period of 2012, with total investment volumes at USD3.7bn, according to Jones Lang LaSalle analysts’ calculations. This included Q2 investment volumes of USD1.7bn, down 8% YoY.

Olesya Dzuba, Head of Capital Markets Research, Jones Lang LaSalle, Russia & CIS: “Despite the slowdown of Russian economic growth and depreciation of rouble in the first half of the year, Russian real estate market continues to show positive dynamics and to attract investors. Moreover, regional market (which excludes Moscow and St. Petersburg) demonstrated growth in the second quarter of 2013: investment volumes amounted to USD232m (13% of the total investment volumes of Q2 2013).

Retail and hotel investment properties were traded in such big regional cities as Omsk, Nizhniy Novgorod and Kaliningrad. The closure of one more big regional deal (Aura SC in Novosibirsk) is expected in the nearest future. If this deal is closed, it will be the biggest transaction in the regional real estate investment market. It confirms demand for high quality product outside Moscow.”

In St. Petersburg we recorded growth as well, the investment into real estate in Q2 2013 accounted to USD83m (4.8% of total volume for the period) vs.USD5m (0.2% of total volume) Q2 2012.

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

In H1 2013 investors’ interest was still focused on office and retail segments with 49% and 39% of the total investment volumes respectively. The selling of Gostinitsy Alrosa CJSC (USD67m) and Renaissance Moscow Olympic Hotel (USD120-150m) provided an increase of hotel sector share from 4.0% in H1 2012 to 6.4% in H1 2013.

Also several owners of warehouse properties put up their assets for sale, so we expect a growth of industrial sector share in the total investment volume of 2013.

Total investments by real estate sector

Total investments by real estate sector.png

Source: Jones Lang LaSalle

We maintain our Russian real estate investment volume forecast for this year at USD7.5bn.

Despite continued high investor interest to Moscow, with 89% share of deals, we saw an increase of investments into regional real estate, with 7% of deals in H1 2013 vs 4% in the same period of 2012. Several large deals with international capital participation accounted for 53% in first half of 2013 compared to 33% for the same period of 2012.

Tim Millard, Head of Advisory Group, Jones Lang LaSalle, Russia & CIS: “It is worth mentioning the growth of deal size on the Russian market helped by the financing availability. In H1 2013 the number of deals over USD300m accounted for 12% of total number (61% of total investment volume for the period). To compare, deals of the same size accounted for 6% in H1 2012 (32% of total volume). The willingness of investors to enter into large transactions is a very good indicator of the attractiveness of the market and points to future growth.”


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 meters and completed $63 billion in sales, acquisitions and finance transactions in 2012. Its investment management business, LaSalle Investment Management, has $47.7 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, 2012 and 2013 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