Real estate market monitoring. January 2012

The monitoring presents the results of development of the residential and commercial real estate markets inMoscowand the Moscow Region in January 2012.

In January 2012, new properties did not enter the elite residential market ofMoscow. By the results of the month the supply volume declined by 3%. The average prices in the primary elite residential market remained at the level of last month. Minor growth of price is observed in the secondary elite residential market (+1.5% to the level of the previous month).

New 2012 began with characteristic of January decline of activity in the office real estate market, which resulted in small, especially in comparison with the past month, volume of deals. During January 2012 there were no large transactions by the purchase of office areas, the aggregate volume of lease deals amounted to about 20 thous.sq.m.

A mass implementation of land plots beyond TTR initiated byMoscowauthorities will be positive for the real estate market. In 2012, approximately 30 land plots out of 600 intended will be offered for sale.

In January, traditional decline of business activity was observed in the hotel market. After the “boom” of delivery of new hotels to the market, which took place at the end of 2011, the beginning of 2012 was marked by the opening of only one large hotel in St.-Petersburg. According to the market participants’ announcements, international hotel operators’ high activity will be preserved in regional cities during 2012.

At the beginning of 2012, two landmark transactions were made, which was indicative of the continuing growth of concentration in the market. Besides, it was reported in the retail real estate market in January about the construction of two large RECs in regional cities, the opening of which is planned for2013. InJanuary 2012, Ostrov Erin settlement was constructed on theterritoryofNew Moscow  within 26km

January 2012 was traditionally rather inert for the countryside residential real estate market, only one new project appeared in the market – “Ostrov Erin” settlement located on theterritoryofNew Moscowwithin 26km along the Kaluzhskoe highway. Land plots without building contracts (55 units), cottages, townhouses and maisonnettes (total area is 312 thous.sq.m.), as well as apartments in low-rise residential houses (total area is 60 thous.sq.m.) will be offered for sale in the multi-format settlement, implemented by “Miel-countryside real estate” company together with “Rossiysky Capital” bank within the territory of approx45 ha. The project is planned for completion by 2015.

The price situation in the countryside residential real estate market remains stable. Holiday promotion actions and discounts were traditionally presented in many settlements in January. It is remarkable that more and more settlements in all the classes offer different mortgage programs for the purchase of countryside properties to buyers.