How the Moscow office property market is developing
The coronavirus pandemic has fundamentally changed business processes. Many market representatives had to switch to remote work, and even after quarantine some of them remained in this format, while others are looking for new ways to solve problems. This makes the Moscow office property market adjust to the actual needs of users.
Due to the coronavirus pandemic and the crisis that followed, the volume of new objects will decrease. If earlier the commissioning of 520 thousand square meters was predicted before the end of the year, now analysts call the figure of 300-320 thousand square meters.
In the first quarter of this year the largest share of office premises rent in the capital is occupied by technological and media companies. Banks and financial institutions are in the second place, and production enterprises are in the third place. The same distribution of forces is observed now and will not change in the nearest future.
Due to the pandemic, there have been changes in the office real estate market. In order to survive in difficult times, many companies started to set priorities anew, reviewing the occupied areas. In order to save money, some companies moved to more modest offices, while others moved to remote work. Not all of them have returned after quarantine, some of the businesses have created flexible space, which allows doing business, but does not require renting expensive premises. Despite the fact that there is no mass renunciation of space at the market, the demand for large offices has decreased. New square meters are also being filled very slowly.
The first quarter of 2020 was quite productive, a large number of deals were concluded in the office real estate segment, new objects were put into operation. However, the pandemic, the oil war and the fall of the ruble exchange rate halted all the processes at the market and led to a tangible decline in performance. The uncertainty that prevailed at that time forced investors to freeze projects and not to start new ones. As a result, only a few recent months have seen signs of market recovery.
Experts predict that by the end of the year the volume of sold and rented office facilities will decrease by 20% and the number of new square meters commissioned will decrease by 6%. At the same time, the market share of “flexible” offices will increase by 50%. The latter represent a multifunctional space divided into several zones, among which there are separate workplaces and an open space, a zone for recreation and negotiations. The popularity of this format was growing last year, but the pandemic forced more companies to abandon the classic rent and consider this option. Such premises are designed for comfortable work of 30-50 employees.