Russia's commercial real estate market is attracting a record amount of investment as surging economic growth drives demand and prices for modern office space, according to Jones Lang LaSalle.
Commercial property investment in the former Soviet state surged 10-fold to $2.85 billion in the first nine months, versus the same period last year, the property consultant said in a report today. „Russia has clearly started a new chapter for its real estate investment market,” Jones Lang said in the report. The nation „offers higher yields than most European markets.” Moscow, Russia's capital, has the second-highest rents for prime office space in Europe after it overtook Paris and Zurich in the second quarter, according to a study in September by Jones Lang.
The yield on prime Moscow office space is 9.5%, the company said yesterday. Demand for office premises in Moscow, Europe's most populous city, is surging as companies hire more staff. Moscow has about a fifth of the office space of Paris, in part because there was no property market before to the Soviet Union collapse in 1991. The annual cost of renting commercial space in prime locations such as the Red Square area jumped 60% in the 12 months to June 30 to about $1,200 a square meter ($112 a square foot), Jones Lang said in September. London is the only European city with a higher rate, the property consultant said. (Bloomberg)