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Moscow Leads the European Market by Number of Large Offices for Lease

Moscow has the widest assortment of offices over 5000 sqm (98 premises) among EMEA markets, according to the 2014 EMEA Office Report by global real estate consultancy Colliers International.
The report indicates that Paris (62), Amsterdam (60) and London (60) are in second and joint third places respectively with a dramatically lower number of offices available compared to Moscow. However, London has the most significant number of offices in the pipeline (35) whereas Amsterdam’s figure is solely represented by existing space, with no large offices set to complete this year. 

In total, of the 23 major European cities, there are 802 good standard, large office spaces – 631 existing offices and 171 in the 2014 pipeline – available to occupy immediately.In contrast to the main European markets, most of the space available in Moscow is in recently constructed buildings. Considering the large volumes of new space planned for 2014, tenants are presented with a broad selection.

The research by Colliers International identified parallels between the number and type of properties available and local market dynamics, and shows that the lack of large office space available in European markets is forcing businesses to look outside of Central Business Districts (CDBs). Despite the largest markets in Europe – Paris, London, Munich and Moscow – having the most office stock available, only 19% of these properties are located in CBDs. At the same time, the largest number of available offices in CBDs among the markets analysed were found in Moscow (18), Paris (15) and Madrid (13).

Number of large office sites (5,000 sqm) available in European markets
Simon Ford, Director, EMEA Corporate Solutions at Colliers International, commented: “It was surprising to find that there are over 800 large office premises available in the primary European markets – offices over 5000 sqm. This is likely due to a lack of confidence by companies to move beyond Central Business Districts, indicated by a recent report that the 1000 largest non-financial companies globally are holding $2.8 trillion in cash.”

“Looking forward, based on recent M&A activity, we’re anticipating pent up demand for office space in the coming 2-3 years. As a result, many businesses will be forced to move further beyond Central Business Districts as they try to find affordable locations and premises that will attract a young and dynamic workforce. This is already occurring in the London market, such as Ogilvy Group, for example, moving from the Docklands to Southwark and Facebook from Victoria to Euston, and we expect non-core area codes to grow in popularity elsewhere in Europe, as in Moscow. For example, Novartis, Nokia and Systematica in 2013 decided to move to modern Class A offices outside the Third Transport Ring, allowing them to create more comfortable conditions for their personnel,” says Vera Zimenkova, Director of Corporate Solutions, Colliers International Russia.

In spite of London’s soaring development pipeline, the comparison between Eastern and Western Europe office markets shows that both eastern cities and Istanbul are experiencing the highest levels of new office development (70%) compared to Western European markets (40%). 

The total number of available units is also higher in Eastern European markets; Moscow (98) has twice as many available units as Western European cities such as Madrid (42), Vienna (41), and Frankfurt (40), and ten times the amount available in Zurich (8), Stuttgart (8), and Geneva (6). 

The analysed office space included: new, recently refurbished, good institutional grade second-hand and properties that are under construction and planned for delivery by the end of 2014. Of the 802 available properties identified 50% have been previously occupied, 29% are new and 21% are in the pipeline for completion by the end of 2014.