Â鶹ӳ»­

Total investment into commercial real estate in Russia rose to $485 mln (EUR 366 mln) in the first quarter, according to research from Cushman & Wakefield. Prime yields moved in due to tight supply and increasing demand by office occupiers.

At 290,000 m2, office take-up in Q1 was significantly stronger than in any quarter of 2009, the adviser said. 'New construction is diminishing but still exceeds net absorption. We expect total office deliveries in Moscow to reach 1 million m² by the end of the year.'

The adviser is also upbeat about the retail market, arguing that the economy is stable and that retail turnover is growing. Prime retail stock totalled 2,900,000 m² at the end of Q1 and another 550,000 m² is expected to come to the market by the end of the year. The top shopping centres in Moscow have a vacancy rate of around 3% and that is not expected to change, the adviser said.

Tim Millard, Managing Partner, Cushman & Wakefield, Moscow, said that most indicators gave cause for optimism. 'Most independent observers are in consensus in increasing their estimates for GDP growth in Russia in 2010, unemployment has peaked and is now dropping and the economy is underpinned by a high and stable oil price. In commercial property there is increasing activity and interest in the capital markets, yields are falling in all sectors, office leasing activity in the first quarter of 2010 has returned to the levels of 2007 and 2008 and year-on-year increases in retail trade and disposable income suggest strong recoveries in the retail and warehouse sectors to come.'

Millard said a number of significant deals are in the pipeline which he believes will anchor the recovery and will lead to stronger sentiment, higher confidence and increased activity in all sectors of the market. 'We may well look back on the first quarter of 2010 as the time when the Russian economy turned the corner and the first half of 2010 as a unique opportunity for acquiring property - both for occupation (lease or buy) and investment.'