Consulting agency CORE.XP recorded a significant increase in office rental prices in Moscow City in the third quarter of 2024. According to their report, rental rates increased by 18%, setting a new record. As of early October, the average annual rental rate per square meter was 50,214 rubles, excluding VAT and operating costs. This sharp increase continues to strengthen Moscow City's position as one of the most expensive office locations in the capital.
Supply shortage and high demand: reasons for the rapid rise in rental rates
Experts explain that the key factor driving rental rate growth is intense competition among tenants and a significant shortage of available space. According to CORE.XP, the office vacancy rate in Moscow City has decreased by 65% over the past year, reaching just 1.3% by October. This is the lowest vacancy rate in the business center's history, creating additional pressure on the market and driving up rents.
Transactions and Demand: Office Leases, Purchases, and Sales in 2024
According to CORE.XP, in the first three quarters of 2024, the total volume of office leases and sales transactions in Moscow City amounted to approximately 60,000 square meters. Office space between 1,000 and 3,000 square meters was in the highest demand, accounting for 51% of the total transaction volume. This indicates that many companies are opting for compact yet spacious office space to optimize costs amid rising prices.
Future forecasts: rental rates will continue to rise
An analysis of the overall Moscow office real estate market shows that Moscow City remains one of the capital's most prestigious and expensive business districts. While rental rates in other districts are growing slowly or remaining stable, Moscow City is demonstrating the most rapid growth. Analysts estimate that by the end of 2024, rental rates in this location could reach 55,000 rubles per square meter per year, setting a new all-time high.
Growth statistics: How rental rates have changed in recent years
Over the past two years, office rental rates in Moscow City have increased by more than 25%. This trend is expected to continue. Demand for office space in the business center will continue to exceed supply, driving up rental prices further. With limited supply and growing demand, tenants will face additional challenges when searching for office space.
Conclusion: Supply shortage creates pressure on tenants
The current situation in the Moscow City office real estate market indicates a continuing shortage of available space, which is driving up rental rates and putting tenants in difficult positions. Businesses planning to lease or expand offices in this location should consider the prospect of further rental price increases, which could significantly impact their budgets.
