Real estate price pressures to push Moscow beyond London
Moscow's been tipped to overtake London as the world's most expensive place to rent an office, as a UK recession pushes prices down. Russian estate agents even see rates going up, as demand for quality Moscow property remains strong.
Before the crisis London office rents were 29% higher than Moscow's, themselves considered astronomical at 2000 euros a square meter.
But with Russia expecting 4% GDP growth versus a prolonged recession feared in the UK, Cameron Sawyer, Chairman of GVA Sawyer, Russia's largest property consultants, says Moscow office prices will top the English capital.
“I wouldn't be at all surprised to see Moscow rents above London rents, maybe even for the long term.”
More than half the firms listed to appear at Russia's biggest property forum failed to turn up this year, more worried about covering debts than selling new projects. But as the credit crunch loosens, Mark Pollitt from Cushman and Wakefield, Stiles and Riabokobylko, the world's largest private property firm says Moscow demand will stay strong, especially as weak builders go under.
“There could become a shortage of supply as certain developers stop building.”
Developers add Russia has such a lack of quality real estate, the jump in bank charges for capital from some 9% to 14% is still allowing 30% returns on property investment in Russia.