Russia saw record commercial real estate growth in 2011, unlikely to be repeated

Last year saw record investment volumes into Russian commercial real estate with growth of over 200% above the level reached in 2010, according to the latest research by CBRE.

There were 43 investment deals last year compared to 27 investment deals in 2010 and 50 deals closed in the record 2008. Investment rose to €4.55 billion and the average deal size was approximately €105.6 million. This compares with an average deal size of €71 million.

The largest deal in 2011 was the purchase by Morgan Stanley of the 191,000 square meters Galleria shopping Centre in St. Petersburg in December, for an estimated €840 million.

The research report says that the stabilisation of the Russian economy in 2011 saw a level of confidence return to the real estate investment market. Domestic investors continued to dominate at 59% but the share of foreign investors rose significantly from that in 2003 to 2010 and this was much more balanced than in recent years, when 70 to 80% of investments were accounted for by Russian money. In pre-crisis years the balance was usually 70 to 80% foreign money.

Source: PropertyWire.com