Company representatives of Colliers International suggest that the decrease is the result of vacancy increases and the stabilization of the economic situation in Russia.

The share of foreign investment in the Russian commercial real estate in 2017 increased to 12 percent, up from two percent in 2016, said the spokesman of Colliers International on December 5, 2017.

According to the real estate company’s representative, the reasons for increased investment in commercial properties in Russia include a reduction in vacancies and the stabilization of the economic situation in the country.

“The share of foreign investments at the end of 2017 will be about 12 percent, while it amounted to two percent in 2016. At the same time, the total volume of commercial real estate investment in Russia has not increased in 2017 and amounted to USD4.4 billion,” said the managing partner of Colliers Nicholas Kazanskiy.

At the same time, the number of investment deals in 2017 increased two-fold in relation to the corresponding period of the previous year and amounted to nearly USD3 billion. Two-thirds of the total volume of investment transactions are deals with commercial real estate, the Collliers managing partner noted.

The expert elaborated that over the past three years, the size of the new commercial real estate market in Russian fell nearly three times in terms of the office areas built. He noted that in 2017, the total area of new offices was 2.5 million square meters, against 7.2 million square meters in 2014.

“A similar situation takes place in Moscow. In 2014, four million square meters were built in the Russian capital. In 2017, 1.3 million square meters were built, which reflects a nearly three-fold decrease,” he said.

According to Kazanskiy, the decline will continue in 2018. “We expect that next year commercial real estate in Russia will stand at two million square meters,” the Colliers International representative said.

Colliers International is an international real estate firm and one of the top four largest consulting companies in the world. The company’s shares are traded on the NASDAQ and the Toronto Stock Exchange.