St. Petersburg, January 13, 2014. In 2013 the land sector deals comprised around 45% of the total investment volume in commercial real estate, while the year before this figure reached 70%. The vast majority of land was purchased for residential construction (86%). Thus, Renaissance Construction company announced the construction of 600 thous. sq m of housing on 40 hectares land plot located on reclaimed territories of Vasilyevsky Island. Stroitelniy Trest company purchased 55 ha of land in Lomonosovsky district for construction of gated community housing. Several land acquisition deals for residential development were closed in the city center. The market also demonstrates an interest in the land for retail and industrial purposes. One of the most important transaction on the market was the built-to-suit deal for the construction of multi-temperature warehouse of 43,000 sq m by PNK Group for the Verniy grocery chain.
In 2013 the share of investments in office sector amounted to around 27% (up to 6% growth as compared to the year before), or $370 million, of the total investment volume in commercial real estate. The statement investment deals formed around two-third of the office real estate transactions. For instance, Jensen Group investment fund acquired mixed-use complex River House of 28,000 sq m. and two operating office buildings (7.5 thous. sq m) were sold by Sponda company. Colliers International acted as an agent for the transactions. FORTGROUP company, previously focused on the retail and elite residential segments, expanded its portfolio with five operating office buildings, previously owned by LSR Group. Nevertheless, around one-third of the investments came from end-users who purchased office buildings for their own needs.
By the end of 2013 investments in retail properties in St. Petersburg made up 8.4% of the total volume, while this figure amounted to 5.8% only the year before.
Anna Sigalova, Associate Director of Investment Services Department, Collier International in St. Petersburg:
“We expect the land market of St. Petersburg to keep generating a significant share of investment volumes. In addition to land for residential development, land plots in the city center for apart-hotels and mixed-use complexes including retail development projects will also be in demand. There is still a shortage of quality completed real estate projects that meet investor’s requirements in St. Petersburg, however a number of such projects are already under construction.”