It is considerably harder to find office space in Moscow than in the other cities in Europe.
Photo: Yury Martyanov
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Office Shortage Looming in Moscow
According to the Frank Knight consulting company, London has the highest rental rates for premium class office space in Europe. There, 1 sq. m. costs ˆ1607 per year. Moscow is in second place at ˆ1358, with Paris (ˆ840), Dublin (ˆ700) and Milan (ˆ520) trailing behind them. London also leads in rental on retail space at ˆ6427 per year for 1 sq. m. and in warehouse space at ˆ212. Moscow is in the top ten in those categories, but the price difference is significant at ˆ1426 and ˆ100, respectively.
It is considerably harder to find office space in Moscow than in the other cities mentioned. The vacancy rate for offices inmost European capitals is 5-10 percent, but in Moscow it is 1 percent and falling. The combination of high rental cost and almost full occupancy make the income rate from office rental in Moscow the highest in Europe. That rate is 8 percent for rentals of Class A office space and 9.5 percent for warehouses, which is 50-100 percent higher than in most other European capitals. That makes the Moscow commercial real estate market very attractive for investors, but difficult for renters.
Frank Knight predicts that office space will rise in price in Moscow by 20 percent per year. The only thing that can stop that progression is the improvement of the business climate and infrastructure in other regions of Russia. At present, the idea of moving a business's headquarters from Moscow to any other Russian city is fantastic, however.
www.kommersant.com
All the Article in Russian as of Mar. 17, 2008
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