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News Release

​Moscow

Q1 2016 Russia real estate investment volumes reached about USD1bn


Moscow, 06 April, 2016 – In Q1 2016, Russia’s real estate investment volume reached USD982mn, nearly doubling the volume in the same period in 2015 (USD499mn), according to JLL calculations.

Taking into account current active negotiations and due diligence activities, we project the annual investment volume to approach USD4bn (a 74% rise from 2015). However, high volatility of oil prices, which remain the key factor for the Russian economy, creates downside risks to our forecast.

Vladimir Pantyushin, Head of Research JLL, Russia & CIS, commented: “Russian assets became more attractive due to the ruble devaluation. Investors still face hurdles from the high exchange rate volatility and uncertainties in different market segments. In this context, an increase in investment volumes in Q1 2016 serves as a sign that the market has likely bottomed out.”

Russia Real Estate Investment Volume Dynamics, USD bn*
Russia Real Estate Investment Volume Dynamics, USD bn_06042016.png
* Investment deals, excluding land acquisitions, JVs, direct residential sales to end-users

Source: JLL

Investors continued to focus on assets in Moscow, which accounted for 93% of all investments in Q1 2016 compared to 98% a year ago. Investments in St. Petersburg real estate market reached USD61m in Q1 2016, raising its share to 6% versus no deals in Q1 2015.

Saydam Salaheddin, Regional Director, Head of Capital Markets, JLL, Russia & CIS, noted: “The share of foreign investments came to 12%. I would like to highlight the sale of logistic centres PNK-Chekhov-3 and PNK-Severnoye Sheremetyevo to a consortium including the RDIF and Mubadala, a UAE sovereign wealth fund, which closed its first deal on the Russian real estate market. This illustrates the attractiveness of Russian assets to foreign investors”.

Market yields remain unchanged from the previous quarter. In Q1 2016, JLL estimates prime yields in Moscow at 10.5% and 10.75% for offices and shopping centres respectively, and 12.0% for warehouses.  

Prime Yield Dynamics in Moscow
Prime Yield Dynamics in Moscow_06042016.png

Source: JLL


About JLL

JLL (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. A Fortune 500 company with annual fee revenue of $5.2 billion and gross revenue of $6.0 billion, JLL has more than 230 corporate offices, operates in more than 80 countries and has a global workforce of more than 60,000. On behalf of its clients, the firm provides management and real estate outsourcing services for a property portfolio of 4.0 billion square feet, or 372 million square meters, and completed $138 billion in sales, acquisitions and finance transactions in 2015. Its investment management business, LaSalle Investment Management, has $56.4 billion of real estate assets under management. JLL is the brand name, and a registered trademark, of Jones Lang LaSalle Incorporated.

In Russia and CIS JLL has offices in Moscow, St. Petersburg and Kiev. JLL, Russia & CIS was voted Consultant of the Year in 2004, 2006, 2007, 2008, 2009, 2010, 2011, 2012, 2013, 2014 and 2015 at the Commercial Real Estate Awards, Moscow; Consultant of the Year at the Commercial Real Estate Awards 2009, St. Petersburg; Consultant of the Year at the RCSC Awards in 2015, and The Best Real Estate Consultancy in Ukraine at the Ukrainian Property Awards in 2013.