The office rental market in Moscow is beginning to pick up, with landlords renting more than 420,000 square meters of space in the third quarter, more than in the same period a year earlier, when the economic crisis was only first hitting Russia.
CB Richard Ellis, which reported the figure, said it was the highest result in a year. In the first quarter of 2009, 266,000 square meters of office space were rented, while the figure was 328,000 square meters in the second quarter. The figure even slightly tops rentals for the third quarter of 2008, when deals were signed for 415,000 square meters.
Thanks to heavy competition, property owners are making serious concessions on rental rates and terms, said Irina Frolova, head of CBRE’s analysis department. According to the company’s data, about 2 million square meters of office space in Moscow is currently empty.
Since the start of the crisis, rental rates in Moscow have fallen by about 60 percent, with Class A offices available for an average of $600 per square meter, and Class B space going for $350 to $400.
Olga Yasko, regional director of the analysis department at Colliers International, said she saw things picking up in the second quarter, as rental terms improved for tenants and property owners offered space that had already been remodeled.
Class A office space is now available for rent at the precrisis prices for Class C offices, said Lada Belaichuk, deputy head of the analysis department at Cushman & Wakefield Stiles & Riabokobylko.
According to CBRE data, the biggest office rental agreement inside the Third Ring Road last quarter was for Aeroflot, which rented 6,900 square meters in the Midland Plaza business center. Second place was shared by the RTS stock exchange and the Aton brokerage, which each rented 5,000 square meters — in the Mokhovaya business center and the Central City Tower, respectively.
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