Commercial russian property sales predicted to hit $4.5bn

Sales of commercial property in Russia could reach $4.5 billion by the end of 2012, according to CBRE.

The firm's market report shows that demand for commercial real estate is exceeding supply, with retail and office space to rent proving the most popular. The growth in demand occurs despite the wider volatility of the global markets, as Russia's economy continues to prove resistant to the international financial crisis.

Indeed, the IMF predicts GDP growth of 4 per cent for both 2012 and 2013, which CBRE expects to support property prices.

The year has already seen 13 major transactions, led by the Galeria Shopping Centre in St. Petersburg, which was sold at the end of 2011 for $1.1 billion. 81 per cent of the deals took place in Moscow, adds CBRE.

The only thing more staggering than Russia's anticipated volume of $4.5 billion in commercial property transactions? The fact that it is lower than last year, when deals hit a total of $6.4 billion.

"Investors are increasingly examining opportunities in Russia as they are attracted to markets where pricing can remain supported in times of difficulty, but also those that might be able to recover quickly once these systemic risks have subsided. With a continued lack of high quality supply to meet the demands of office, retail and industrial occupiers, new prime developments will meet strong demand for the foreseeable future," commented Valentin Gavrilov, CBRE's Russian Research director.

"We therefore expect to see continued strong levels of interest from both international and domestic investors for well placed high quality assets in Russia, and more particularly in Moscow," he added.

(via Property Wire)