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27 august 2014

Alexey Filimonov: “Soon we will observe severe reduction of a number of speculative projects on commercial real estate market”

According to Alexey Filimonov, CEO of ASTERA an alliance member of BNP Paribas Real Estate, uncertain situation on commercial real estate market occurred due to the limited access of developers to long-term loans will result in severe reduction of a number of speculative projects in this segment of real estate market.

In Alexey Filimonov’s opinion, sanctions will have influence on all segments of commercial real estate market to different extents.

‘The introduced sanctions will strongly affect capital market. Limited access to long-term loans and credit tightening will lead to decline of developers’ activity on commercial real estate market. Currency appreciation, increase in real estate taxes and possible decrease of revenues will make projects unprofitable. Especially, this will have a great impact on middle and small players on whom banks place raise demands concerning credit security’, - comments the situation CEO of ASTERA an alliance member of BNP Paribas Real Estate.

As a result, there will be severe decrease of developers’ interest to speculative projects due to indefinite level of demand for commercial real estate premises. For example, vacancy level is rather high in the office segment (about 26%) in Moscow which makes the introduction of new office premises without future tenants very risky. In warehouse segment, due to active construction over the last two years, the market is close to saturation and soon we will observe the fall of rental rates in some segments. Furthermore, the sanctions can lead to reduction in sales turnover of logistics companies specialized in import which will decrease the demand on warehouse premises. Thus, possible augmentation of production within import substitution is able to result in demand increase for industrial premises. However, even industrial projects will be constructed only according to individual specifications, and in built-to-suit format’, - forecasts the expert.

At the same time the decrease in the activity of retail operators observed from the beginning of the year has already led to the changes in developers’ policy in the segment of retail real estate. “In the nearest future the activity of developers will remain high in the segment of district shopping centers specialized in everyday products. The majority of large projects in the development stage with the area of more than 50 000 sq.m will be postponed until the renewal of consumption growth”, - states Alexey Filimonov.

Yet, general director of ASTERA an alliance member of BNP Paribas Real Estate knows positively that in the near future in Russia there will be no decline observed in the construction of infrastructure projects due to their social significance. << Return to the list