Sales of apartments and commercial lots in Moscow's business center in the first quarter of 2021 doubled those for the same reporting period last year, totaling over five billion rubles. In the Federation Tower, all remaining units over one thousand square meters were sold this spring, with the exception of the final penthouse (almost three thousand square meters). Such units are typically purchased by large commercial or government organizations for office space or headquarters.
In the context of increased demand for apartments up to 100 square meters, the necessary redevelopment was carried out to match the level of supply with demand.
What influences the decline in demand?
First and foremost, this is due to the specific nature of the supply – all apartments up to 100 square meters in the newly commissioned towers have already been sold out, and these are the units most in demand among business people. At the beginning of this year, no new units opened in the business center's skyscrapers, so the market was in a state of anticipation. Sales are planned to begin in three new towers by the fall, totaling over two thousand lots.
Another factor is the rise in prices, albeit slight. On the new-build market, the price per square meter has reached 660,000 rubles, while the average unit price is over 80 million. Currently, sales are only taking place in existing skyscrapers. Therefore, no dramatic changes in the real estate market should be expected until units in the new towers go on sale.
Another determining factor is the availability of finishing. Currently, the supply of properties without finishing does not exceed one percent. On the one hand, ready-to-move-in apartments offer convenience, comfort, and time savings. But on the other hand, many buyers want to implement their own projects, which creates conflicting ideas about what luxury housing should look like, what materials and technologies should be used, and what equipment should be installed.
General dynamics of transactions
Overall, the trend is declining, with transaction volume down more than fifteen percent—contracts were signed for just over 60 properties. However, the transaction value increased compared to last year. This is due to buyers showing demand for luxury apartments with an average price of 90 million rubles per lot. While in the spring of 2020, demand was primarily for smaller, lower-priced apartments, spring 2021 is seeing increased demand for larger, more expensive lots. This is partly due to the specific nature of supply in the existing towers.
What attracts buyers to Moscow City?
The Moscow International Business Center, with its well-developed internal infrastructure, offers a favorable environment for business development. It boasts residential and commercial real estate, as well as a well-developed administrative sector. Businesspeople find everything they need for business, meetings, and leisure at the MIBC. The district's infrastructure is also gradually developing.
There's a palpable anticipation of new real estate offerings in the skyscrapers currently under construction. This all suggests positive sales momentum. The main focus is currently on One Tower, with its wide selection of apartments, and two other skyscrapers with mixed-use apartments.
