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The Share of Foreign Occupiers in MIBC Moscow City Comes to 22%

Office11

The international consultancy Colliers International has analysed the profile of MIBC Moscow City’s residents (office lease and sale). The result is that since 2018 until now the share of Russian companies occupying offices in MIBC Moscow City has stood at 78% while foreign firms account for 22%.

Annual breakdown of demand in MIBC Moscow City by origin

Year

Russian companies (%)

Nonresident companies (%)

2011

23

77

2012

38

62

2013

82

18

2014

62

38

2015

36

64

2016

64

36

2017

64

36

2018

78

22

2019

78

22

2020

78

22

 

Profile of occupiers in MIBC Moscow City by country of origin

Country

Space occupied, %

Space occupied, sq. m (≈)

Russia

78

726,000

USA

6

52,500

UK

3

31,400

Netherlands

3

25,000

Japan

2

14,336

Other countries

8

76,000

 

The top three leaders among nonresident companies as compared to H1 2019 have remained unchanged and these represent the USA (6%), UK (3%) and Netherlands (2%). At present the activity of overseas firms is at the average level, which can be explained by an already formed pool of foreign tenant corporations. Starting in mid-2019, Russian companies have been most active. Thus during the above-mentioned period companies, such as Rosbank, Yandex, Segezha Group have been added to the pool of Moscow City’s residents whereas overall more than 50,000 sq. m have been leased since Q3 2019. Agile office space operators are still keen on the business district as well: SOK and Business Club have already opened their facilities while Space 1 plans to open its facility in 2021.

Opened co-working venues and those announced for opening in MIBC Moscow City in H1 2019 – H1 2020

Operator

BC

Opening

Area, sq. m

SOK

Federation Tower

2019

7,168

Business club

OKO II

2019

4,200

Business club

Federation Tower

2019

800

Business club

OKO II (Phase II)

2020

6,050

F2

Federation Tower

2020

2,332

Space 1

Mercury Tower

2021

3,250

 

As regards the profiles of Moscow City’s residents, banking and financial businesses take the lead among Russian firms (34%), followed by state-owned companies and non-profit entities (18%), by resource companies (18%), professional services (8%), IT and telecom (8%). Prevailing among nonresident occupiers are professional services (28%), processing industry (26%), pharmaceuticals and biomedicine (12%), IT and telecom (10%), automotive and car parts (6%).

Breakdown of residents by profile

20200907_1

Foreign representative offices

Russian companies

Banking and finance                                                               State-owned companies and non-profit entities

Production and distribution                                                    Professional services

IT and telecommunications                                                     Construction and development

Leisure, entertainments & retail                                              Other sectors

Processing industry/manufacturing                                        Media

Automotive and car parts                                                         Pharmaceuticals and biomedicine

Key end users in MIBC Moscow City

Company

Area*, sq. m

Profile

VTB

146,834

Banks and financial companies

Transneft

79,053

Production and distribution

AHML

76,721

State-owned firms and non-profit entities

Moscow government

55,000

State-owned firms and non-profit entities

RAB

46,770

Banks and financial companies

*GLA of office space is indicated

 

Key tenants in MIBC Moscow City

Company

Area, sq. m

Profile

KPMG

19,247

Professional services

Yandex

19,192

IT and telecom

Rosbank

18,715

Banks and finance

OZON

17,000

IT and telecom

Norilsk Nickel

13,785

Production and distribution


MIBC Moscow City is a complete business cluster: most of the buildings have been commissioned and the vacancy rate on this submarket in H1 came to 7% which is comparable to the market at large (6%). It should be noted that vacancies in A-grade buildings inside the MIBC stand at 7.9% while the market average reaches 9.6%. Only one B-grade project has been commissioned in recent 12 months within the business district, named OKO (Phase II), with gross leasable office space standing at 26,749 sq. m; this property currently boasts the 100% occupancy. Another project named Neva Towers announced for commissioning this year will add another 56,158 sq, m of quality leasable office space to the office supply. The subsequent commissioning of new projects is not expected sooner than in 2023: the matter regards the 120,000-sqm iCity scheduled for commissioning by MR Group, where most of the floor space is going to be sold. At the present moment three projects are under robust construction in the given submarket; one more project has been granted a construction permit and is being prepared for building and assembly works. In total the office space in Moscow City will have increased by 11% by 2023, whereas in 2024 the growth will amount to another 14% of the current supply. In addition, there are two more prospective sites in the MIBC territory for the development of office space inside mixed-use projects; their potential total leasable floor area will near 95,000 sq. m. It should be noted that the office space currently under design and construction falls to the share of grade A amounting to 37% (436,000 sq. m) of the current total supply.


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