Commercial Real Estate - Russia | Statista Market Forecast

The Commercial Real Estate market market in Russia is forecasted to reach a value of US$1.96tn in 2024.
It is expected to exhibit an annual growth rate (CAGR 2024-2029) of 0.54%, leading to a market volume of US$2.02tn by 2029.
When compared globally, the United States is projected to generate the highest value in the Real Estate sector, amounting to US$25.3tn in 2024.
The commercial real estate market in Russia is experiencing a surge in demand for office spaces in major cities like Moscow and Saint Petersburg.

Definition:

Commercial real estate can be defined as properties that are used for business purposes, such as office buildings, retail spaces, warehouses, and industrial properties.

Additional information:

The commercial real estate market contains the value of commercial properties as a key performance indicator. This is the worth of all office buildings, retail spaces warehouses, and industrial properties for the timeline of our data coverage.

Office buildings
Retail spaces
Warehouses
Industrial properties

Residential real estate
Publicly owned buildings used by the local government
Buildings used for public health care services

The Commercial Real Estate market in Russia has been experiencing significant development in recent years.

Customer preferences: One of the main customer preferences in the Russian Commercial Real Estate market is a focus on modern and well-equipped office spaces. With the increasing demand for flexible working environments and the rise of technology-driven businesses, companies in Russia are seeking office spaces that can accommodate their evolving needs. Additionally, there is a growing preference for mixed-use developments that combine office spaces with retail and leisure facilities, providing convenience and amenities for employees.

Trends in the market: One of the key trends in the Russian Commercial Real Estate market is the increasing demand for coworking spaces. This trend is driven by the rise of startups and small businesses, as well as the desire for flexible working arrangements. Coworking spaces offer a cost-effective solution for companies looking for a professional working environment without the long-term commitment of traditional office leases. This trend is expected to continue as more companies embrace remote work and seek flexible office solutions. Another trend in the market is the growing interest in sustainable and energy-efficient buildings. With increasing awareness of environmental issues, companies in Russia are prioritizing green buildings that minimize their carbon footprint and reduce operating costs. This trend is driven by both customer demand and government regulations promoting sustainable development. Developers are incorporating energy-efficient features and green technologies into their projects to attract environmentally conscious tenants.

Local special circumstances: One of the special circumstances in the Russian Commercial Real Estate market is the dominance of Moscow and St. Petersburg as the primary business hubs. These cities attract the majority of commercial real estate investments and offer a wide range of office spaces and retail developments. However, there is also an increasing interest in regional cities such as Kazan, Novosibirsk, and Yekaterinburg, where companies are expanding their operations and seeking commercial real estate opportunities. This diversification of investment is driven by the desire to tap into emerging markets and take advantage of lower costs outside of the major cities.

Underlying macroeconomic factors: The development of the Commercial Real Estate market in Russia is influenced by several macroeconomic factors. One of the key drivers is the overall economic growth of the country. As the Russian economy continues to recover from the impact of the global financial crisis and economic sanctions, businesses are expanding and increasing their demand for commercial real estate. Additionally, favorable government policies and incentives for foreign investors have attracted international companies to the Russian market, further driving the demand for commercial properties. In conclusion, the Commercial Real Estate market in Russia is developing in response to customer preferences for modern and flexible office spaces, as well as sustainable and energy-efficient buildings. The market is also influenced by the growing trend of coworking spaces and the diversification of investments into regional cities. The underlying macroeconomic factors, including economic growth and government policies, are contributing to the expansion of the market.

Data coverage:

Figures are based on value of commercial real estate.

Modeling approach / Market size:

Market sizes are determined by a bottom-up approach. As a basis for evaluating this market, we use national statistical offices. Next, we use relevant key market indicators and data from country-specific associations such as share of industry, manufacturing, and services of the GPD, price level index, GDP. This data helps us to estimate the market size for each country individually.

Forecasts:

In our forecasts, we apply diverse forecasting techniques. The selection of forecasting techniques is based on the behavior of the market, for example, exponential trend smoothing.

Additional Notes:

The market is updated twice per year in case market dynamics change. The impacts of the Russia-Ukraine war are considered at a country-specific level.

This report presents a comprehensive analysis and additional information on the Financial market, in a PDF format.

After a challenging period during the coronavirus pandemic, the European commercial real estate sector now faces additional pressures, including inflation, record-high interest rates, and sluggish economic growth. In 2022, these challenges were evident through contracting investment volumes in the two largest markets—the United Kingdom and Germany. Although the shifting economic landscape has impacted all commercial real estate subsectors, industrial and logistics—a property type that demonstrated incredible resilience during the pandemic—continues to be the most popular investment class. The performance of the sector is closely tied to the state of the economy, explaining why cities with flourishing capital markets garner the most interest from investors. In 2023, investors identified London, Paris, and Madrid as the three most attractive markets.

Growing demand for industrial and logistic real estate is prominent in Europe, driven by the increase in online retail sales rather than in-store. All the Nordic countries saw steady growth in their e-commerce sales during the past fifteen years and more, and the growth is expected to continue. Investments in the industrial and logistic real estate industry have generally been at a higher level during the last few years. The highest investment value among European countries in the first half of 2021 was in the United Kingdom, while Sweden topped the list among the Nordic countries, and was fifth in terms of industrial and logistics investment in real estate in Europe that year.