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Russia Real Estate Investment Volume Reached USD1.4bn in Q3 2016

The share of local investors raised to the record level
The share of local investors raised to the record level

September 30, 2016, 8:11 (PX Newswire)

MOSCOW, 30 September, 2016 – Russia’s real estate investments reached USD1.4bn in Q3 2016, twice the volume of Q3 2015 (USD673m), according to JLL calculations. This brought year-to-date volume to USD3bn, up 71% YoY.

Vladimir Pantyushin, Head of Research, JLL, Russia & CIS, commented: “The stabilization in the broader economy, in real estate markets, and rouble appreciation reduced the uncertainty for investors. Property values remain attractive, and recent financial market stability provides much needed comfort to investors. As usual, the early period of investment recovery contains a large part of debt restructuring, asset swaps and other non-traditional transations. Last quarter, such deals represented 60% of the total volume. We highlight the active presence of governmental agencies, which have accounted for 18% of the deals.”
The total investment volume is expected to approach USD4.0bn this year (a 74% rise), although acknowledge some downside risks to this forecast.

Investors continued to focus on assets in Moscow, which accounted for 93% of all deals in Q3 2016 compared to 91% a year ago. The share of St. Petersburg investments increased to 4% in Q3 2016 from 1% in Q3 2015. In Q1-Q3 2016, Moscow accounted for 87% of the deal volume, St. Petersburg for 5%. Offices remained the most attractive asset class, accounting for 74% of all deals in Q3 2016 and for 65% in Q1-Q3 2016.

“As usual, Russian investors dominate in the down cycle; they have accounted for 95% of all deals in Q1-Q3 2016, which is the highest level for the Russian market. However, the uncertainty about the economic recovery, about the rental market and yields extend the negotiations period, with several projects in the works from last year on track to be closed in in the coming months. We expect the gradual investment market recovery to continue in the near term including a more active involvement of foreign investors.” - Evgeniy Semenov, Regional Director, Head of Capital Markets, JLL, Russia & CIS, commented.

Market yields did not change in Q3 2016, with prime yields in Moscow at 10.5% for offices, 10.75% for shopping centres and 12.0% for warehouses; yields in St. Petersburg were an 11.5%, 11.25% and 13.5% respectively.

– ends –

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 $59.1 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, 2016, St. Petersburg; Consultant of the Year at the RCSC Awards in 2015.
For further information, visit www.jll.ru

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