The new normal on the real estate market
The events of this year have forced people to review their strategies and investment tools, according to experts. Real estate continues to remain in a strong position, but the value offered by products is changing, as are the profitability of projects and payback periods. Expected changes (such as the transition to project financing) and unforeseen circumstances (the coronavirus pandemic) were among the topics discussed at a key session entitled Real Estate Market Investment Potential: The Era of the New Normal, which took place on 10 September as part of PROESTATE.Live. Attendees examined the impact of these changes on investor mood in the Russian market, and spoke about what the near future has in store.
10.09.2020
The Forum is being organized by the Roscongress Foundation; the Ministry of Construction, Housing and Utilities of the Russian Federation; the Academy of Real Estate (ARE), and IMMERGITY.
Among those taking part in the session were Sergey Trukhanov, Head of T+T Architects; Natalia Devyatkova, General Director of Denova Group and Vice President of the Russian Guild of Property Managers and Developers; Stanislav Bibik, Partner and Member of the Board of Colliers International; and Katerina Soboleva, Vice President of Becar Asset Management. Moderating the session was Maria Kotova, General Director of AVICA, the management company for the Romanov Dvor business centre.
In his analysis of the market, Stanislav Bibik noted that there were clear, specific sectors which had been affected by the COVID-19 pandemic. These included hotels, the tourist industry, and the business sector. "What we observed in the first few months of the pandemic was the rise of online retail. The market has undergone a wholesale restructuring. So, while Utkonos was previously in first place, the situation has since changed," he said. At the same time, the Colliers International board member drew attention to the fact that the market grew during this time, in spite of the crisis. "Yes, investment in hotels has halved, if we compare the figures to 2019. But investment in offices has grown by 30%. Growth in the warehouse segment doubled compared with the same period last year. There has been high demand in the logistics sector, which remains the case today. Currently, investors are choosing reliable sectors, such as offices (38%) and logistics. This year, almost all investment has centred in Moscow (90%). These are the main trends," he concluded.
Vice President of Becar Asset Management Katerina Soboleva spoke about the carsharing economy as a new trend. "Demand for condo hotels has recently increased by 150%, while demand for housing has increased by 35%. Real estate prices are growing. The average price grew by almost 10%. International-brand condo hotels have seen the biggest price jump. Apartment hotels have proved to be a very resilient segment, with 87% capacity," she said. Apartment hotels and condo hotels are currently leading the way, while coliving spaces have emerged as the most consistent trend. According to Soboleva, capacity in coliving spaces reached 87% during the pandemic.
Head of T+T Architects Sergey Trukhanov noted that any development project is a story of money, and that architecture is currently offering impressive potential to satisfy market demand. "A new product has emerged, one that is productive, instructional, and rental-based. Urban spaces are able to bring together and perform a range of different functions. A search for new USPs is currently under way in light of the COVID-19 pandemic," he said. A visible trend today, according to Trukhanov, is the creation of social facilities for residents (leisure centres in complexes, barbecue areas, and outdoor cinemas). "A clear demand for functional areas has developed," he concluded.
General Director of Denova Group and Vice President of the Russian Guild of Property Managers and Developers Natalia Devyatkova presented and analysis of investment case studies on the real estate market in Tyumen Region for the first eight months of 2020. "Our developers are feeling excellent today, with 35% growth compared to last year. The newbuild market is seeing very high demand. This is due to subsidized interest rates, the introduction of escrow accounts, and lower deposits, among other factors. All this has caused a surge in demand. There is huge demand for land, which is selling very well indeed," she said.
PROESTATE.Live partners: Official Partner – Mosinzhproekt; Partners – ANT Development and YugStroyImperial; Official Session Partners – A101 and Colliers International Group Inc.; Session Partner – Cushman & Wakefield.
Official website of the event: proestate.ru/en
Among those taking part in the session were Sergey Trukhanov, Head of T+T Architects; Natalia Devyatkova, General Director of Denova Group and Vice President of the Russian Guild of Property Managers and Developers; Stanislav Bibik, Partner and Member of the Board of Colliers International; and Katerina Soboleva, Vice President of Becar Asset Management. Moderating the session was Maria Kotova, General Director of AVICA, the management company for the Romanov Dvor business centre.
In his analysis of the market, Stanislav Bibik noted that there were clear, specific sectors which had been affected by the COVID-19 pandemic. These included hotels, the tourist industry, and the business sector. "What we observed in the first few months of the pandemic was the rise of online retail. The market has undergone a wholesale restructuring. So, while Utkonos was previously in first place, the situation has since changed," he said. At the same time, the Colliers International board member drew attention to the fact that the market grew during this time, in spite of the crisis. "Yes, investment in hotels has halved, if we compare the figures to 2019. But investment in offices has grown by 30%. Growth in the warehouse segment doubled compared with the same period last year. There has been high demand in the logistics sector, which remains the case today. Currently, investors are choosing reliable sectors, such as offices (38%) and logistics. This year, almost all investment has centred in Moscow (90%). These are the main trends," he concluded.
Vice President of Becar Asset Management Katerina Soboleva spoke about the carsharing economy as a new trend. "Demand for condo hotels has recently increased by 150%, while demand for housing has increased by 35%. Real estate prices are growing. The average price grew by almost 10%. International-brand condo hotels have seen the biggest price jump. Apartment hotels have proved to be a very resilient segment, with 87% capacity," she said. Apartment hotels and condo hotels are currently leading the way, while coliving spaces have emerged as the most consistent trend. According to Soboleva, capacity in coliving spaces reached 87% during the pandemic.
Head of T+T Architects Sergey Trukhanov noted that any development project is a story of money, and that architecture is currently offering impressive potential to satisfy market demand. "A new product has emerged, one that is productive, instructional, and rental-based. Urban spaces are able to bring together and perform a range of different functions. A search for new USPs is currently under way in light of the COVID-19 pandemic," he said. A visible trend today, according to Trukhanov, is the creation of social facilities for residents (leisure centres in complexes, barbecue areas, and outdoor cinemas). "A clear demand for functional areas has developed," he concluded.
General Director of Denova Group and Vice President of the Russian Guild of Property Managers and Developers Natalia Devyatkova presented and analysis of investment case studies on the real estate market in Tyumen Region for the first eight months of 2020. "Our developers are feeling excellent today, with 35% growth compared to last year. The newbuild market is seeing very high demand. This is due to subsidized interest rates, the introduction of escrow accounts, and lower deposits, among other factors. All this has caused a surge in demand. There is huge demand for land, which is selling very well indeed," she said.
PROESTATE.Live partners: Official Partner – Mosinzhproekt; Partners – ANT Development and YugStroyImperial; Official Session Partners – A101 and Colliers International Group Inc.; Session Partner – Cushman & Wakefield.
Official website of the event: proestate.ru/en