Skip to main content Skip to footer

Share of foreign companies occupying MIBC offices continues to shrink

Moscow, July 27, 2018 – Over the past two years, the share of foreign tenants at the Moscow International Business Centre (MIBC) has decreased from 34% to 22%. Total leased space by foreign companies fell from 218,000 m2 in H1 2017 to 175,000 m2 in H1 2018. The decline is due to current economic realities, in which a number of foreign companies that previously leased offices at the MIBC preferred moving to different offices as part of optimising leasing costs over extending existing lease agreements. Foreign companies that left the business district are in the pharmaceuticals, banking, and IT sectors, among others.
In H1 2018, the average weighted asking rate for leasing Grade A offices at the MIBC was 32,600 roubles/m2/year, which is comparable to the average Grade-A lease rate in the Paveletsky business district (32,300 roubles/m2/year), 11% lower than the average weighted Grade-A lease rate in the Belorusskaya business district (36,600 roubles/m2/year) and 23% more than the Moscow average for Grade-A offices (25,100 roubles/m2/year). Due to increased demand for offices at the MIBC, the vacancy rate there fell from 21.1% in mid-2016 to 10.7% in mid-2018) – the average Grade-A lease rate at the MIBC showed an increase of 9% relative to mid-2016, while the average rate for Moscow continued to decrease. The decline over the last two years was 2%, due to consistently falling lease rates in some Grade A offices and the commissioning of facilities located in business districts outside the city centre.
In H1 2018, the total area of office space leased and sold at the MIBC was 45,500 m2, which is almost 190% more year over year.

 

Major lease transactions at MIBC since start of 2018 

COMPANY

BUSINESS CENTRE

ADDRESS

AREA, M2

Ozon

Embankment Tower

Presnenskaya Nab. 10

11 220

Mercury Fitness

Mercury Tower

1-y Krasnogvardeisky Proyezd 15

3 220

Freedom Finance

Mercury Tower

1-y Krasnogvardeisky Proyezd 15

3 000

Bitfury Group

Mercury Tower

1-y Krasnogvardeisky Proyezd 15

1 630

 

The MIBC is becoming occupied mainly by domestic companies. Colliers has recently noted high demand for offices at the MIBC – mainly state and banking structures. Accordingly, the MIBC enabled the Moscow City Administration and a number of federal ministries to consolidate their branches and two major domestic banks to locate their headquarters there. According to 2017 results, the share of state companies in the total amount of new office lease and sale transactions at the MIBC was 43%, with banking and financial companies at 25%.

Vera Zimenkova, regional director, Corporate Solutions & Office Agency, Colliers International Russia: “As in the city's other business districts, we expect lease rates at the MIBC to grow up to 10%, due to the growing demand for office space amid limited commissioning of new facilities. There is a shortage of large office blocks at the MIBC as there is in the entire city, but for tenants and buyers today there are about 100,000 m2 of available office space. Also, construction of office facilities at the MIBC is ongoing – there is about 200,000 m2 of office space currently being built – and this may hold down rates at MIBC offices in the short term.”