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The majority of office supply in cities with a population over 1m comprises low quality stock
Moscow, 25 November 2013 – Jones Lang LaSalle provides a comparative analysis of office space supply in Millionniki cities in Russian regions. According to Jones Lang LaSalle research, markets of cities like Omsk, Ufa and Chelyabinsk on average lag the Moscow market by a factor of 20 in terms of existing supply.
“Usually demand and supply in the office real estate segment depends on the pace of economic development of the city, which in its turn affects the scale of a company’s presence in the market. Undoubtedly Moscow is a leader and the largest office market in Russia – current quality stock per 1 citizen is almost 1.3 sq m. However, there is a huge gap between the Moscow market and other cities. The cities with the closest office spaces provision to Moscow are St. Petersburg (almost 3 times behind Moscow), Yekaterinburg (3.5 times) and Novosibirsk (4.5 times),” - Olesya Dzuba, Deputy Head of Research of Jones Lang LaSalle, Russia and CIS says.
According to Jones Lang LaSalle, there is less than 0.5 sq m of office area per capita in St. Petersburg, 0.4 sq m in Yekaterinburg and 0.3 sq m in Novosibirsk. In less developed markets such as Omsk, Ufa and Chelyabinsk, this indicator is 20 times lower on average compared to Moscow. This considerable gap may be explained by the fact that the majority of office stock in these cities comprises premises on the ground floors of residential buildings, in academic institutes and in old administrative buildings, which cannot be considered as quality spaces. The majority of offices there are of Class C and D, according to the classification used in Moscow. As a result, Omsk has only 0.06 sq m of quality office space per capita and Chelyabinsk has only 0.1 sq m per capita.
Office stock in Millionniki cities, sq m per capitaSource: Jones Lang LaSalle
Natalia Kopeychenko, Head of PR
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