Russian real estate market

In 2006 commercial real estate investment volumes in Russia reached 3.4 billion euros, setting an all-time high market record. While this is nearly 10 times more than in 2005, this figure is still behind Poland with 5 billion euros and well behind Weste
European markets like Germany (50 billion euros) or the UK (80 billion euros), suggesting room for significant growth for years to come.
While Russia is traditionally compared to its Central and Easte
European neighbors as an emerging market economy, it is now demonstrating a trend in commercial property acquisitions and sales that suggests the Russian investment market is on track to develop in a fundamentally different way. For an emerging property market the Russian investment horizon is looking distinctly long term and mature.
The property investment market in Russia continues to maintain a very strong domestic component. Local investors accounted for at least 44% of investment transactions by volume in 2006. Similar figures for Poland, the Czech Republic and Hungary and were a meager 2%, 6% and 8% respectively. Weste
European markets demonstrated a distinctly different composition, with domestic capital taking a healthy market share of 18%, 23% and 48% (Germany, France and UK respectively).
In European markets strong domestic capital seems to signal market maturity and healthy competition between inte
ational and domestic capital. For the Russian property market this means that market practice and investor expectations will mature alongside yield compression and capital value appreciation. The short term capital injections and withdrawals commonly associated with more volatile markets will play an insignificant role in Russian property, leaving the market more sustainable and attractive for the long term.
In Russia investor confidence stems from the country’s long term potential. Long term, low risk players such as pension funds, mutual funds and insurance companies (institutional capital) are...

In 2006 commercial real estate investment volumes in Russia reached 3.4 billion euros, setting an all-time high market record. While this is nearly 10 times more than in 2005, this figure is still behind Poland with 5 billion euros and well behind Weste
European markets like Germany (50 billion euros) or the UK (80 billion euros), suggesting room for significant growth for years to come.
While Russia is traditionally compared to its Central and Easte
European neighbors as an emerging market economy, it is now demonstrating a trend in commercial property acquisitions and sales that suggests the Russian investment market is on track to develop in a fundamentally different way. For an emerging property market the Russian investment horizon is looking distinctly long term and mature.
The property investment market in Russia continues to maintain a very strong domestic component. Local investors accounted for at least 44% of investment transactions by volume in 2006. Similar figures for Poland, the Czech Republic and Hungary and were a meager 2%, 6% and 8% respectively. Weste
European markets demonstrated a distinctly different composition, with domestic capital taking a healthy market share of 18%, 23% and 48% (Germany, France and UK respectively).
In European markets strong domestic capital seems to signal market maturity and healthy competition between inte
ational and domestic capital. For the Russian property market this means that market practice and investor expectations will mature alongside yield compression and capital value appreciation. The short term capital injections and withdrawals commonly associated with more volatile markets will play an insignificant role in Russian property, leaving the market more sustainable and attractive for the long term.
In Russia investor confidence stems from the country’s long term potential. Long term, low risk players such as pension funds, mutual funds and insurance companies (institutional capital) are...

Investing in real estate is one of the most attractive and profitable ways of making money everywhere.
Now experts are pointing to the Russian property market as a good place for investors to put their capital. The commercial real estate market is considered to be the best option.
In 2006, deals involving office space in Russia made up almost one-quarter of all transactions in easte
and central Europe. In 2007, experts predict that the value of the Russian residential and commercial property business will leap to 11 billion euros. An investor's profits from real estate operations, depending on the type of investment, could vary from 8.5% to 35% per year.
In 2006, investment in commercial real estate worldwide totaled $643 billion (487 billion euros). According to Cushman & Wakefield, a real estate agency, they rose by one-third last year to a record high. The agency forecasts that world investment in real estate will grow in 2007 to $681 billion, with half of it in Europe.
European property has been described as the best investment opportunity compared with other continents. Its estimated retu
s exceed profits from inte
ational and European securities, as well as from U.S. real estate and securities. Experts predict that capital movement will change, too. Instead of direct investments in the purchase of real estate, investors will be putting their money into real estate investment funds.
Russia, and particularly the Moscow real estate market, has, according to major developers, become the world's third largest market after London and Paris. Forecasts by DTZ Holdings, a consultancy, indicate that the value of commercial property deals in Russia in 2007 will reach 5 billion euros, compared with 3 billion euros in 2006 and 1 billion euros in 2005.
Investments in this sector are divided practically half and half between retail and office space. According to Cushman & Wakefield, retu
s on office investments at the end of 2006 in Moscow were around 8.5%...