pdf - Intermark Relocation

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M
EXPAT HOUSING REVIEW
2015: Review and Conclusions
2016: Tendencies and Forecast
Annual Report
2015 - MAIN TENDENCIES AND RESULTS
Varvara Shatova
Account Manager / Team Leader
"The high-budget rental market has moved in 2015 to another stage of its development and participants have fully adopted the new "rules of the game". Primarily, we talk about preferential fixation of
rental rates in rubles, high competition between landlords, market saturation with quality apartments
and decrease of provided rental rates.
The year was very active for our company and transactions were concluded in different price segments. New tenants entered the market and those who had previously rented used the current situation to their own benefit. We conducted a lot of negotiations and moves.
The owners of high-budget real estate have acted differently and the number of transactions concluded
with participation of Intermark in 2015 exceeded 2014.
We expect that in the coming year, the dynamics of rental rates will still be determined by currency
fluctuations, but a sharp correction is not expected. In the conservative scenario the number of transactions in 2016 will remain at least at the same level."
Key numbers of 2015
+26%
Supply remains persistently high
During 2015 Moscow’s high-budget segment of the rental market recorded consistently
high supply levels. Intermark estimates since the beginning of 2015 put vacancy rate
growth of high-budget rental apartments at 26%.
20-25
apartments
Competition increases among landlords
By year-end, analysts count 20–25 apartments per tenant; a number is comparable with
the values of 2008-2009. In previous years, there were 8-10 apartments per tenant (i.e.,
half the selection).
-26%
Demand declines for high-budget rentals
Demand on the high-budget rental market of Moscow was 26% lower than the previous
year. The peak of activity was recorded in April. The most difficult months were January
and March, when the dollar was strongest against the ruble.
-30%
Average rental budget falls
By the end of 2015, the average rental budget of demand fell by almost 30% in dollar
terms compared to 2014.
-35%
Average weighted supply price declines
The current average weighted price of supply on the Moscow high-budget rental market
in dollar terms is 35% lower than in 2014 and almost 40% lower than in 2013.
~4%
Great predictability
The average budget of rental supply became more predictable. In the last months of
2015, Intermark recorded minor fluctuations of about 4%.
1
www.intermarkrelocation.ru
TENANT PROFILE
Intermark Relocation estimated that in 2015 the proportion of foreigners in the pattern of demand for
high-budget rent was 63% of all requests, a little bit lower than in 2014. Proportion of our countrymen in
the pattern of demand is 33%, what is higher than in previous years and tenants from the CIS countries –
4%.
63%
2015
37%
66%
2014
34%
International
Assignee
66%
2013
Russian/
CIS
34%
In the age pattern the largest proportion of tenants (52 %) are from 35 to 49 years old. More than half
(51%) of customers, who prefer luxury apartments, are single. Last year the situation was the opposite: 55%
of customers were couples. 62% relocate with children and the majority have two or more children.
38%
2015
62%
53%
2014
47%
58%
Single/Couples
without children
2013
Families
with children
42%
Furnished VS. Unfurnished
The same tendency – more families with children looking for larger apartments/houses which on Moscow
market are typically unfurnished – accounts for growth in demand for unfurnished accommodation. At the
same time due to high import duties overall the demand for unfurnished properties is still low – only 13%
vs. 87% demand for furnished accommodation.
87%
2015
13%
82%
2014
18%
89%
Furnished
2013
2
Unfurnished
11%
DEMAND
By the end of 2015, demand for high-budget rental apartments had decreased by almost 26%. The reduction is accounted for by declining tenant interest: demand fell by 30% on average per month until September. From October, Intermark noted a monthly increase of 3% on average (i.e., demand level similar to the
last months of 2014).
One of the reasons for this reduction is the strong hike in demand rates in March 2014, the most favorable
month in a long time – in March 2015, demand was half that. According to 2015 results, the total number
of potential tenant requests had decreased compared to the previous year.
In December, for the first time in year, transactions increased (+20%). November was another relatively
good month where the underrun of transactions number from the previous month was only 2%.
The most severe periods of 2015 were January and March: -40% and -56% respectively compared to same
period in 2014. The monthly number of requests from potential tenants in 2015 was also negative when
compared to 2014. Nevertheless, December finally demonstrated a positive trend (see graph 1.1).
Chart 1.1 Dynamics of the demand of Moscow prime rental market (January 2014 – 100%)
160%
140%
120%
100%
80%
60%
40%
I
II
III
IV
V
VI
VII
VIII
IX
X
XI
XII
I
II
III
2014
IV
V
VI
VII
VIII
IX
X
XI
XII
2015
Source: Intermark Relocation
The territorial structure of demand on the high-budget rental market of Moscow has practically not
changed. Leningradsky Prospekt is consistently among the Top 3 most popular rental districts in the capital. By the end of 2015, potential tenants requests for property in this location were about 18%.
Tverskoy and Arbat-Kropotkinskaya districts came second and third: 17% and 12% of total requests
respectively.
A number of areas lost half of demand: Leninsky Prospect, Tsvetnoy Boulevard, Patriarshie Prudy,
Frunzenskaya, Kutuzovsky Prospect and Kuntsevo.
3
Chart 1.2 Most popular areas for living in Moscow (January – December 2015)
Leningradsky Prospect
Tverskaya-Kremlin
2015
17%
Arbat-Kropotkinskaya
12%
Lubyanka-Kitay-Gorod
10%
Zamoskvorechye
9%
Krasnopresnenskaya
6%
Prospekt Mira
6%
Other
5%
Taganskaya
4%
Leninsky Prospect
3%
Tsvetnoy Boulevard
3%
Patriarshie Prudy
2%
Frunzenskaya
2%
Kutuzovsky Prospect
2%
Kuntsevo
2014
18%
1%
Tenant preferences are also stable. Demand for two-bedroom apartments is at the same level as last year:
about 30% of all requests. To a lesser extent, tenants were interested in compact Studio apartments and 3
bedroom apartments (about 15% of the requests) as well as spacious apartment with 5+ rooms (7%).
Chart 1.3 Demand analysis of Moscow housing market in terms of number of rooms
2013
2015
2014
50%
45%
40%
33%
35%
30%
25%
20%
15%
10%
5%
22%
32%
30% 30%
24%
21%
16%
14%
7%
24%
8%
Studio
18%
14%
7%
1 Bedroom
2 Bedroom
4
3 Bedroom
4+ Bedroom
SUPPLY
Since the beginning of 2015, the supply volume of high-budget residential property rental increased by
26%.
The main inflow of new properties was strongest in the first and last months of the year. By December,
this figure had increased by 7%, compared November – almost one tenth of new apartments hit the market
at the end of 2015. Compared to 2014, the biggest monthly increase of supply was observed in early 2015
with peaks in January and March (+31%).
Despite the increase of supply over the whole year, Intermark noted a declining trend of this indicator (up
to +15%) between April and November. However, in December the volume of supply had increased again
(see chart 2.1).
Chart 2.1 Dynamics of the supply of Moscow prime rental market (January 2014 – 100%)
160%
140%
120%
100%
80%
60%
40%
I
II
III
IV
V
VI
VII
IX
VIII
X
XI
XII
I
II
III
IV
2014
V
VI
VII
VIII
IX
X
XI
XII
2015
A slightly larger increase was observed in Tverskaya-Kremlin district: from 13% to 17% of all display properties. The maximum volume of supply on the high-budget rental market is still in the Arbat and Kropotkinskaya district: 22% of the total supply – every fifth property.
Chart 2.2 Analysis of the most popular areas for living in Moscow in terms of supply
22%
Tverskaya-Kremlin
17%
9%
Leninsky Prospect
8%
Leningradsky Prospect
7%
Krasnopresnenskaya
7%
Zamoskvorechye
6%
Patriarshie Prudy
6%
Tsvetnoy Boulevard
5%
Kuntsevo
3%
Kutuzovsky Prospect
3%
Taganskaya
3%
Frunzenskaya
2%
Prospekt Mira
2%
Other
1%
5
2014
2015
Like in 2014, the supply structure in terms of surface area was dominated by spacious apartments. Properties of 120–150 sq. m. and 150–200 sq. m. accounted for 20% and 21%, respectively.
Chart 2.3 Supply analysis of expat housing in Moscow in terms of number of rooms
2013
2015
2014
50%
45%
38,4% 38%
40%
35%
36%
27,9% 28% 27%
30%
25%
20%
16,8%
15%
19% 19%
14% 14%
9,7%
10%
5%
0,5% 1%
Studio
4%
1 Bedroom
2 Bedroom
6
3 Bedroom
4+ Bedroom
RENTAL RATES AND BUDGETS
By the end of 2015, average tenant budget for high-budget had fallen almost 30% in dollar terms compared to last year.
There was a noticeable reduction of rental rates, both supply and demand, during the second half of
2015. By year-end, the average supply and demand budgets had reached their minimum values.
Weighted average budget of proposals at the end of December 2015 was $4,714 per property per month:
35% less than in 2014. This 2015 indicator is lower than the average rental rates at the end of 2009.
The most expensive district is Arbat-Kropotkinskaya: $5,500 per property per month on average. Krasnopresnensky district is second with an average budget of $5,300 per property per month. It mainly influenced by Moscow City apartments that are more expencive than market average. In third place is Tsvetnoy
Boulevard with an average budget of $4,730.
Demand budgets were more volatile in 2015. From the beginning of the year, there was a decline following the revision of rental rates by landlords. But in the spring of 2015, the value of supply and demand
budgets reached equilibrium.
Following a strengthening of the ruble towards the end of 2015, the most highly corrected supply budgets were on Tverskaya, Arbat and Frunzenskaya streets. To a lesser extent, budgets were corrected on Leningradsky and Kutuzovsky avenues as well as Tsvetnoy Boulevard.
Chart 3.1 Dynamics of the average budgets of supply and demand
Demand
Supply
$8.000
$7.000
$7.825
$7.550
$6.498
$6.785
$6.000
$5.000
$4.714
$4.000
$3.632
$3.000
$2.000
I
II
III IV
V
VI VII VIII IX
X
XI XII
I
II
2014
III IV
V
VI VII VIII IX X XI XII
2015
7
Chart 3.2 Analysis of rental rates changes by districts in Moscow
The whole
market
ArbatKropotkinskaya
Patriarshie
Prudy
TverskayaKremlin
LubyankaKitay-GorodChistye Prudy
2014
$6.370
$8.900
$6.760
$6.630
$6.320
$5.770
$6.170
2015
$4.700
$5.500
$4.470
$3.300
$4.160
$3.900
$2.480
-32%
-60%
Zamoskvorechye Frunzenskaya
-26%
-38%
-34%
-50%
-34%
The whole
market
Krasnopresnenskaya
Tsvetnoy
Boulevard
Taganskaya
Leninsky
Prospect
Kutuzovsky
Prospect
Kuntsevo
2014
$6.370
$7.140
$4.920
$3.340
$4.420
$4.930
$4.880
2015
$4.700
$5.300
$4.730
$2.240
$3.380
$4.440
$4.040
Changes, %
-26%
-26%
-4%
-33%
-24%
-10%
-17%
Changes, %
Chart 3.3 Analysis of rental budgets in areas with the biggest supply
Tverskaya-Kremlin
$8.550
250
200
$5.260
150
100
50
0
$3.060
$7.090
191
223
146
90
1 Bedroom
2 Bedroom 3 Bedroom +4 Bedroom
$9.000
$8.000
$7.000
$6.000
$5.000
$4.000
$3.000
$2.000
$1.000
$0
average area, sq.m
average area, sq.m
150
100
50
0
150
50
0
90
247
$7.000
$6.000
$5.000
$4.000
$3.000
$3.040
114
$9.000
$8.000
170
$2.000
$1.000
1 Bedroom 2 Bedroom 3 Bedroom +4 Bedroom
$0
average area, sq.m
average area, sq.m
$3.840
$2.470
$2.160
$6.000
207
$3.960
160
$5.000
$4.000
127
$3.000
$2.000
78
1 Bedroom
$7.000
$1.000
$0
Zamoskvorechye
$8.180
250
100
$5.780
200
200
$6.030
250
450
400
350
300
250
200
150
100
50
0
$6.740
Arbat/Kropotkinskaya, Patriarshy
Patriarshy Ponds,
Ponds,
Arbat/Kropotkinskaya,
Tverskaya, Lubyanka/Kitay-Gorod,
Zamoskvorechie
413
$2.750
247
$7.000
Close to International schools
Business class
Elite class+
Premium class
(unique
properties)
Description
Business class
Elite class+
Premium class
(unique
properties)
1 bedroom
$1000–$2000
$1500–$2500
n\a
n\a
2 bedroom
$1500–$2500
$3000–$8000
$1000–$2000
$1000–$4000
3 bedroom
$2500–$3000
$4000–$7000
$1500–$2500
$3000–$6000
4 bedroom
$2500–$4000
$7000–$8000
$2500–$3500
$3500–$8000
5+ bedroom
$5000-$10000 $10000–$15000
n\a
$5000-$12000
$4.000
$3.000
$1.000
96
1 Bedroom
$5.000
$2.000
205
(Leningrasky prospect, Kuntsevo)
8
$8.000
$6.000
$4.340
Chart 3.4 Analysis of average asking prices/Number of bedroom/Class
Area
$5.900
$0
Business class
Apartments in pre-revolutionary, Stalin-period or ministerial buildings. Clean secure entrance
with concierge or quality intercom arrangement. Quality renovation with the use of standard
renovation materials (not designer renovation), in many cases furnished in IKEA style/quality.
Elite class
Apartments in pre-revolutionary renovated bulidings or new buildings. Presentable entrance with
high quality renovation and concierge or security, in most cases the building has underground
or enclosed parking. Apartments with high quality designer renovation, furniture and appliances.
Premium class
(unique properties)
Apartments in new premium class buildings - mostly "club buildings" - premium quality designer
entrance renovation, underground parking, high multi-level security. The apartments have
renovation of high quality, furniture and appliances of top brands, very often unique features like
size of more than 300 sq.m., terraces.
International compounds
Rental rates in international compounds have started to decline after a period of 5–10% average growth
between 2012 and 2014.
Today there are no waiting lists and clients are offered a wide range of houses. Rental rates in the Rosinka
and Pokrovsky Hills compounds fell 11–18% between 2014 and late 2015.
Rental rates in Serebryany Bor have not undergone major changes because they are stated in rubles.
2015 gave expats a good opportunity to improve their living conditions. Tenants, whose budget only
covered apartments before, now have the option of living in one of Moscow’s international compounds.
Compound
House Type
# of Bedroom
# of Bathroom
Size, sq. m
Rent
2015
Pokrovsky Hills
Tver-1
Town-House
3
2.5
160
$9.000
Tver-3
Suzdal-1
Suzdal-2.3
Novgorod-1
Novgorod-2.3
Yaroslavl-2.3
Town-House
Town-House
Town-House
Town-House
Town-House
Town-House
3
2.5
209
$13.000
3
2.5
200
$11.000
3
2.5
212
$13.500
4
2.5
215
$14.500
4
2.5
220
$15.500
5
3.5
340
$18.000
Rosinka
Business
Town-House
2
2
130
-
Executive
Family
Family Deluxe
Town-House
Town-House
Town-House
3
2.5
151
$8.000
4
2.5
222
$10.700
4
2.5
259
$11.500
Country
Country Deluxe
Presidential
Town-House
Town-House
Town-House
Town-House
5
4.5
266
$12.300
5
4.5
302
$13.400
5
4.5
292
$12.800
5
4.5
326
$14.000
House
3
2.5
165
House
House
2
2.5
150
$6.410
3
2.5
171
$4.557
Town-House
Town-House
5
4.5
248
$6.709
5
5
280
$5.696
Presidential Deluxe
Serebryany Bor
9
$5.063
FORECAST AND RECOMMENDATIONS
Political tensions could negatively influence some landlords who may be less willing to rent apartments to
foreign companies or employees from certain countries.
Supply may slightly decrease if the ruble goes down. Some landlords believe that renting is no longer profitable and choose to sell their properties or use them for themselves. This should keep rental prices more
or less stable especially those denominated in rubles.
The general trend is still favorable for tenants: supply exceeds demand, giving tenants the possibility to
upgrade accommodation for the same money or even less.
Lease contracts are shifting to rubles. Intermark recommends avoiding lease agreements in foreign
currencies and renegotiating, running USD or EUR contracts into rubles.
Housing budgets need to be reviewed at the top and middle levels, in particular when priced in a foreign
currency. The budget housing market requires a differentiated approach as it remains quite competitive,
particularly in popular areas.
ANTI-CRISIS SERVICES
Rent Negotiations
Intermark constantly monitors real estate market and predicts changes in rental cost. If rental rates begin
to decline or if only appear prerequisites to this, we are ready to negotiate with landlords and fix a rental
rate in accordance with the current market. During the periods of rent decrease (1998, 2008, the end of
2014) employees of Intermark conducted several hundreds of successful negotiations, which in result led
to significant reductions in the clients’ cost savings.
Sublease
Project «Sublease» linked Intermark with our corporate clients and landlords. We offer our clients to
conclude an agreement of sublease straight with Intermark. After that our company will conclude an
agreement with landlords. Consequently we assume obligations both of the Tenant and of the Landlord
and responsible for every client.
Such scheme of collaboration has some advantages:
• no need for direct collaboration with the landlord.
• all sublease agreements signed on a single draft.
• easy and unified procedure of prolongation and termination of the contracts on the approved beforehand procedure.
• unified damage assessment procedure.
10
NEW MATERIALS
Moscow Relocation Guide
Relocation Guides
Inside this edition of the Intermark Moscow Relocation Guide you will find all the facts of the local
housing market and different areas of the city
including the most popular residential areas, international schools, medical care and, of course, tips
for adapting to Moscow life.
Intermark helps expats relocate to many countries
and we are proud to present our brand new Relocation Guides for Azerbaijan, Belarus and Kazakhstan! These guides with useful information about
migration procedures, housing markets, international schools, traditions and culture, sightseeing
and tips making expat life in Baku, Minsk, Astana
and Almaty interesting and eventful.
Guide to Rentals in
Russian Regions
Regional Guides
Despite various types of locations there are many
similarities in how the relocation process is organized and what challenges and solutions to them
one finds along the way. This Guide to Rentals in
Russian Regions will give you an opportunity to
feel yourself comfortable in every city of Russia.
In recent years international companies have been
actively expanding and relocating their assignees
not only to Moscow, but also to other regions of
Russia. Intermark Relocation creates guides about
other Russian cities to make expat life easier and
more interesting across the country.
Country Pages
Intermark Relocation is glad to present our new
country pages for Belarus and Ukraine!
Our team created these pages for people relocating to different countries and inside you can find
important information about immigration procedures, culture and traditions, business communication styles and other useful tips.
We also have country pages for Russia, Kazakhstan, Azerbaijan and Georgia.
You are welcome!
11
Vladimir
Kostroma
Perm
Bryansk
Magnitogorsk
Irkutsk
Contact our Management Team
Irina Yakimenko
Marina Semenova
Managing Partner
[email protected]
Evgenia Schramm
Operations Director
[email protected]
Managing Partner
[email protected]
Stanislav Labunsky
Senior Business Development Manager
[email protected]
12
Alexey Stepanenko
Corporate Clients Services Director
[email protected]
©
All materials branded by service mark and (or) trademark № 254895 in printed matters distributed by Intermark Group, Inc’s representatives and all materials presented on the web
site www.intermarkrelocation.ru along with materials spread by e-mail or distributed any other way are the intellectual property of Intermark Group, Inc. Such materials are
intended only for private or office usage. Intellectual property of Intermark Group is protected by the 4 Part of the Civil Code of the Russian Federation and by the standards of
international law. Reproduction or distribution of this materials is possible only on the assumption of the approval by the representative of Intermark Group, Inc.
IMMIGRATION
• Work Permit
• Visa support (all types)
• Residence Permits
• Migration registration & notifications
• Legalization & duplicates’ procurement
• Immigration due diligence
RELOCATION
• Temporary Housing
• Orientation & Home-finding
• Legal due diligence
• Settling in & 24/7 Help-desk
• Departure Support
• Spousal support & Coaching
AND MORE
MOVING
• International moving
• Domestic moving
• Transportations of antiques
• Office moving
• Vehicle moving
• Stock and storage
• Office/retail search
• Furniture rental
• Car leasing & Insurance
• HR Workshops
• Language training
• Marketing reports
7/1 Kropotkinsky Pereulok
Moscow, Russia, 119034
+7 495 502 95 53
[email protected]
© Intermark Group, Inc. 2016

pdf - Intermark Relocation

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