This was announced at the conference of the Russian Guild of Managers and Developers by Felix Blinov, Vice President of the Russian Guild of Managers and Developers and General Director of the RWM Capital Investment Group.
"All brokers today note the existing shortage of office space. Initially, we expected that it would be compensated by office projects implemented as part of the 'workplace' program. However, our expectations have not been met - since the beginning of 2025, no new A-class properties have been introduced in Moscow, and all under-construction areas are being purchased by major players under build-to-suit," the speaker noted.
According to statistics, only one B+ class office building with an area of 4,400 sq. m was completed in Moscow in the first quarter of this year, and the available supply with a completion date of 2026 is only 300,000 sq. m, compared to the annual demand for offices of 960,000 sq. m.
The problem of shortage is not solved due to the continued growth of construction costs and the simultaneous moderate growth of rental rates. In the current situation, no one is willing to invest in office real estate projects because the rental rate, even with the potential for growth, does not provide the necessary return on investment.
"As a result, the market is experiencing a dissonant chord that requires resolution. There are several possible scenarios for this resolution. The first scenario is the emergence of new office projects following the reduction of the key interest rate. It is important to note that Russia is a developing market, and moreover, a market that is currently experiencing turbulence. Therefore, the key rate will be reduced gradually, and by the end of next year, we expect it to be at best at 16%, but even this is still a high enough rate for commercial real estate projects," said Felix Blinov.
Another possible scenario for market development is the increase in rental rates. However, rental rates cannot increase by more than 2 times to generate a reasonable income for investors. Not every tenant is willing to accept a 30% increase in rental rates, and a 2-fold increase may be too much for many tenants.
The third scenario is related to the decrease in the cost of land plots for development. Buying a land plot for less money, paying for its cost in the long term, and attracting cheaper capital all lead to a decrease in investment. However, according to the speaker, these factors are likely to work together, and new office projects will be implemented due to the cumulative effect.
