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News Release

Moscow

The Russian Real Estate Investment Market Reached USD8.1bn

Jones Lang LaSalle presents 2013 preliminary results


Moscow, 25 December 2013 – Although the 2013 was not a record year, it is another successful period for the Russian real estate investment market. According to preliminary calculations of Jones Lang LaSalle analysts, investment into Russian real estate reached USD8.1bn in 2013, which is close to results of previous two years and down a mere of 7.5% YoY.

The significant input into 2012 record has been made by residential real estate deals (excluding direct residential sales to end-users), and investments into commercial real estate in 2013 of is comparable to the result of the previous year.

Olesya Dzuba, Deputy Head of Research, Jones Lang LaSalle, Russia and CIS, commented: “Russian real estate investment market has undergone significant changes over the past few years. Today it exceeds pre-crisis levels, despite the sluggish economic growth. Transaction volume remains stable at around USD8bn for the last 3 years compared to USD4-5bn in 2006-2008. These results become possible because of large transactions (over USD300m), which have increased their share from 20-25% in 2007-2008 to 40-50% in 2010-2013, with ‘billion’ deals closing each year (Galeria SEC, White Square BC, Metropolis SEC).”

Investment volume dynamics, USD bn*
Investment volume dynamics, USD bn_25122013.png
* Investment deals, excluding land acquisitions, JVs, direct residential sales to end-users

Source: Jones Lang LaSalle

Investment by deal size (volume)
Investment by deal size (volume)_25122013.png
Source: Jones Lang LaSalle

Moscow’s market is still the priority for investors accounting for around 84% of the total real estate investment volume in 2013 compared to 88% in 2012. St. Petersburg’s share also decreased from 10% in 2012 to 6% in 2013 due to increased investment volumes to regional cities.

Investors are still focused on office and retail market segments, their shares accounted to 37% in 2013 respectively. Increased investment volume into retail sector (compared to 21% in 2012) is the result of the sale of Metropolis shopping centre. It’s worth noting that investments into warehouses reached 14% compared to 7% in 2012, this became possible thanks to MLP transaction and several built-to-suit deals.

 
Russian Investment Volume Breakdown by Sector
Russian Investment Volume Breakdown by Sector_25122013.png

Source: Jones Lang LaSalle
 

“Investment volumes in recent years were implied by “maturity” of the market and development of high quality assets, which made ‘billion’ deals possible, – Olesya Dzuba noted. – Apart from that, financing has become more available on the market in recent years.”

 

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 $46.7 billion of real estate 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, 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