On August 21, 2024, IBC Real Estate predicted a decrease in investments in the Russian real estate market to 650 billion rubles. This forecast was announced by the CEO of IBC Real Estate, Alexey Efimov, at a conference organized by the newspaper „Kommersant.“ According to the forecast, investments in the Russian real estate market for the year 2024 could reach 650 billion rubles, which is 26% lower than the record levels of 2023. From January to August of the current year, the volume of investment transactions reached 437 billion rubles.
One of the key factors contributing to the record levels of 2023 was the significant deals involving foreign investors exiting the Russian market, accounting for around 30% of the total investment volume. However, in 2024, the share of such deals decreased to 14%, impacting the overall investment volume.
According to Efimov, in the next 12 months, there will be a continuation of tight monetary and credit policies, along with high key interest rates, which will restrain investor activity. Professional players in the market will focus on properties with yields in the range of 15-17%. The high interest expenses on bank loans will also lead to the majority of projects being financed through investors‘ own funds.
In terms of market segmentation, data from IBC Real Estate for January-August 2024 showed that residential real estate was the leader in terms of investment volume, accounting for 38% of all investments. Office properties followed in second place with a share of 29%, warehouses at 18%, and retail real estate at 9%.
For comparison, in 2023, the investment volume in Russian real estate reached a record high of 833 billion rubles, with 39% allocated to retail real estate, totaling 325 billion rubles.
Overall, the forecasted decrease in investments in the Russian real estate market for 2024 reflects the changing dynamics and challenges faced by investors, influenced by factors such as foreign investor activity, monetary policies, and market segmentation. It will be interesting to see how these trends evolve and impact the real estate landscape in Russia in the coming months.