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H1 2016 Russia real estate investment volume reached about USD1.5bn



June 30, 2016, 18:07 (PX Newswire)

In Q2 2016, Russia’s real estate investments reached USD565m, roughly the same as the volume in Q2 2015 (USD578m), according to JLL calculations. The total investments in H1 2016 account for USD1.57bn, up 46% YoY.

Although the Brexit vote served as a reminder of potential risks for investors, the stabilization of real estate markets, rouble appreciation and anticipated economic recovery indicate an improvement in investment activity. We project the annual investment volume to approach USD4.0bn (a 74% rise from 2015).

Vladimir Pantyushin, Head of Research, JLL, Russia & CIS, commented: “There is a visible improvement in investor interest in Russia after subdued 2015. Current property values remain attractive, and recent financial market stability provides much needed comfort to investors. Without global shocks, there is a good chance that deals that have been delayed since last year will reach execution in the near term.”

Investors continued to focus on assets in Moscow, which accounted for 67% of all deals in Q2 2016 compared to 75% a year ago. The share of St. Petersburg investments declined to 2% in Q2 2016 from 9% in Q2 2015.

Evgeniy Semenov, Regional Director, Head of Capital Markets, JLL, Russia & CIS, commented: “The share of residential deals increased significantly in Q2 2016, to 45% of total volume, as this segment offers better liquidity vis-à-vis commercial real estate. I would like to highlight the sale of apartments at the project Match Point to the Agency for housing mortgage lending (AHML), a state institution which considers several other residential projects. There was also a pick-up in interest towards the retail and hotel sectors.”

The share of foreign investments accounted for about 4% in Q2 2016, repeating the level in Q2 2015; in H1 2016 the share declined from 18% to 11% a year ago. Nevertheless foreign investors are actively involved in negotiations on several projects.

Market yields remain unchanged from the previous quarter. In Q2 2016, JLL estimates prime yields in Moscow at 10.5% and 10.75% for offices and shopping centres respectively, and 12.0% for warehouses; in St. Petersburg – 11.5% and 11.25% for offices and shopping centres respectively, and 13.5% for warehouses.

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 280 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 $58.3 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, 2006-2016 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.

For further information, visit www.jll.ru


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