ILM met the first day of spring at a business breakfast for real estate and construction companies. The event is organized by KPMG, the leader of the Russian audit services market. The main topic of the event was a discussion of key trends in the real estate market, summing up the results of 2017 and their impact on the book / fair value of real estate objects, as well as the application of Digital technologies in real estate based on practical cases. In the first session, ILM managing partner Andrei Lukashev spoke about what was happening in the Moscow office real estate market in 2017, and shared expectations for 2018. In total, 380,000 office space was introduced in 2017, which is 9% more than 2016, and the total net absorption amounted to 980 thousand square meters. m, which is more than two times higher than in 2016. The main trend of 2017 was the increase in the number of transactions with an increase in the occupied area. Net absorption exceeded the volume of new construction by 2.5 times, which led to a decrease in the level of vacant space. As of today, 2.5 million office spaces remain unoccupied. In 2017, the average rental rate in class A decreased by 2% and amounted to 25,000 rubles per sq. m.. in year. In 2018, the rental price will not change significantly. The average level of rates may vary depending on withdrawal from the market of cheap offers. In turn, the shortage of large office blocks in sought-after areas may also affect the growth of rental rates in individual submarkets. The situation on the market is aggravated by low developer activity. In 2018, according to our forecasts, about 300 thousand sq. m.. m, which may be the minimum value over the past ten years, this is facilitated by the fact that the owners postpone the commissioning of the objects already under construction, waiting for anchor tenants. A number of business centers previously announced for commissioning in 2018 postponed the dates to 2019-2020. The practice of built-to-suite is gradually returning to the office market. Construction of new facilities expected to be commissioned can be completed for a specific client.    It is becoming more and more difficult for large companies to find a high-quality office. Taking into account the shortage of large areas and the lack of new offers, the activity of tenants in the office segment will increase. In the years 2019-2020. For tenants of large areas, conditions may arise when the owners will “dictate” the terms of the lease. Part of the owners against the background of stabilization of demand and reduction of vacant space will gradually increase the rental price, this suggests that the rental market will again become the “owner market” rather than the “tenant market”, as happened in 2014. The market is cyclical, the price bottom is reached, the next stage will be an increase in the growth of rental rates.

The purchase by VTB Bank of a blocking stake in the Magnit is capable of giving impetus to the development of the retailer and bringing a revival to the rental market in street retail, experts say. Egor Levchenko, head of the retail real estate department at ILM , notes that Magnit has been influencing rental rates in street retail for a long time. He believes that the acquisition by such a large player, like VTB, is aimed at further development. "Any development leads to an increase in market share, and for this you need to open new points," said the expert, stressing that "this is positive news for the market." Levchenko admits that Magnit may expand its product line and make changes to the format of stores. At the same time, he notices that this will not happen immediately, at least a month will be spent on audit. ILM’s managing partner, Andrei Lukashev, adds that Magnit will have an impact not only on rental in street retail, but also in the warehouse segment. Read more RIA News: https://realty.ria.ru/realtynews/20180216/1514800476.html

On January 16-18, the annual Gaidar Forum 2018 was held in Moscow to discuss the problems and challenges of Russia's development. Within the framework of the forum, a large expert discussion "New life of big cities: an analysis of risks and solutions" took place. ILM Managing Partner Andrei Lukashev made a presentation on it “The Impact of Redevelopment Policy on Investment Attractiveness of the Territories and Business”    Renovation has become a significant trend for all major cities in the world. Huge industrial areas get a new life and attract the attention of investors and businessmen. The commercial real estate market in Paris has 3.5 million square meters. m vacant space in London - 3.4 million square meters. m. In Moscow, the figure is 4.2 million square meters. Over the past three years, the volume of new commercial space in the capital has decreased. On the contrary, the areas located in the objects of renovation, are in stable demand. It can be assumed that the experience of cluster development - the global trend - will be successful in Russia.  Andrei Lukashev cited data on average base rental rates for office space. The comparison was carried out between the "classic" business centers and offices in the objects of renovation. In all classes (B-, B + and A) the rate in reconstructed business clusters is higher than in BC. And in class A, the difference reaches 15,000 rubles. New formats of commercial real estate turned out to be very attractive for large Russian and foreign companies. In general, for 2017, the demand for premises up to 100 square meters in some areas of renovation increased by 30-40%.  Judging by the trends and development of the market in Europe and America, it becomes obvious to us that the future lies in the new real estate formats. Already, coworking, coliving, joint trading and warehouse spaces; temporary stores (Pop-up retail) are actively fighting for market share. The renovation program will help to meet this demand, at the same time transforming the urban space, making it more convenient and comfortable for life.