"Russia Real Estate Report Q3 2014" Published

From: Fast Market Research, Inc.
Published: Tue Jun 03 2014


BMI View: Commercial real estate investments for 2013 fell slightly short of 2012's record high of USD 8.8bn, arriving USD 700mn lower at USD 8.1bn . The annexation of Crimea has markedly soured the prospects for foreign investment over the coming years, with capital outflows likely to reach USD100bn in 2014, which is also likely to lead to weaker real growth over the coming quarters.

Foreign participation in Russia's real estate market has almost doubled between 2012 and 2013. The 2018 FIFA World Cup offers some potential for growth in both the construction industry and commercial real estate investment. A number of significant infrastructure projects are likely to further bolster growth in these areas. Nonetheless, the Russian annexation of Crimea and the looming threat of economic sanctions imposed by the West on Russia has seriously soured investor sentiment towards Russia, with capital outflows likely to reach USD100bn in 2014. The depreciatory pressure this has placed on the Russian rouble has also forced the central bank to hike interest rates, which will raise financing costs for domestic projects funded in roubles.

Full Report Details at
- http://www.fastmr.com/prod/817935_russia_real_estate_report_q3_2014.aspx?afid=303

As always, Moscow represents the focal point of commercial real estate investment in Russia. From the January 1 2014 commercial real estate owners in Moscow and greater Moscow will be affected by revised laws concerning how a property is valued and thus its tax liabilities. The main driver of the new laws is the aim of increasing budget revenues generated from real estate. According to these amendments the tax rates for office and retail real estate in Moscow will be 0.9% in 2014, increasing to 2% by 2018. These changes may have a negative effect on commercial real estate investments in Russia, with potential investors dissuaded by the costliness of any investment.

The retail real estate market is expanding rapidly in Russia. If all the announced retail projects are completed on time, 2014 will set a record for new retail premises...

The Russia Real Estate Report features Business Monitor International (BMI)'s market assessment and independent forecasts of major construction projects in the residential and commercial markets, plus rental prices and yields in major cities. The report critically analyses the prospects for real estate within the broader economic and financial context - both domestic and global - via our econometrically-modelled and clearly explained banking and economic forecasts and follows this through to evaluate the implications for REITs.

BMI's Russia Real Estate Report provides industry professionals and strategists, sector analysts, business investors, trade associations and regulatory bodies with independent forecasts and competitive intelligence on the real estate industry in Russia.

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