prime residential real estate market - … · 3 h1 2018 research supply volume and average price...

Supply price increase (+7%) due to elimination of liquid supply as well as objects real price increase.

A moderate downward trend (-7%) of the supply volume due to high rate of object implementation.

Increase in buying activity against the future legislative changes.

HIGHLIGHTS

RESEARCH

PRIME RESIDENTIAL REAL ESTATE MARKETMoscow

H1 2018

2

PRIME RESIDENTIAL REAL ESTATE MARKET. MOSCOW

Ludmila PotapovaDirector of Residential Department, Knight Frank

prime Residential real estate market

Supply

Premium segment Dynamics* Elite segment Dynamics*

Total supply, pcs. 1,365 -5% 1,090 -9%

Average price, thousand rub./sq m 568 +2% 919 +9%

Average area, sq m 98 -3% 146 +4%

Average price, mln rub. 56 -1% 134 +13%

Demand

Premium segment Dynamics** Elite segment Dynamics **

Average price, thousand rub./sq m 520 +9% 722 -18%

Average area, sq m 95 -12% 131 -18%

Average price, mln rub. 50 -5% 94 -33%

* H1 2018 / H2 2017** H1 2018 / H1 2017 Source: Knight Frank Research, 2018

Key indicators. Dynamics

Over 2,450 flats and apartments with a total area of 293,000 sq m were listed for sale on the primary market in the high-budget segment of residential real estate of Moscow as of the beginning of July 2018. Since the beginning of 2018 the supply volume at the market decreased slightly showing negative dynamics - by 6% in lots, and the same 6% in square

meters. The negative supply dynamics is primarily due to the high buying activity at the market.

The sales started in 7 new residential complexes have appeared in the elite and premium segments within the first six months, only two of them are positioned in the elite segment and five – in the premium segment. Moreover, since the beginning of

3

RESEARCHH1 2018

Supply volume and average price dynamics of the primary market

Source: Knight Frank Research, 2018

Share and average price by district


500

700

900

0

50

100

150

200

250

300

350

Q1 Q2 Q3 Q4 Q1 Q2 Q2Q3 Q4 Q12016 2017 2018

thousand sq m thousand rub./sq m

Supply volume Average price

Ljublino

Izmajlovo

Perovo

Krylatskoe

Pechatniki

Danilovskiy

Сокольники

Ochakovo-Matveevskoe

Lefortovo

Kuz'minki

Basmannyj

Khoroshevskiy

Ryazanskiy

Filevskiy Park

Dorogomilovo

Nagorniy

Nagatinskij Zaton

Nizhegorodskij

Sokolinaja Gora

Begovoy

Obruchevskiy

Gagarinskiy

Kotlovka

Fili-Davydkovo

Tekstil'shhiki

Meshhanskij

Nagatino-Sadovniki

Akademicheskiy

Marina Roshcha

Krasnosel'skij

Juzhnoportovyj

Lomonosovski

Prospekt Vernadskogo

Савеловский

-1% ₽82 mln

-5% ₽59 mln

-2% ₽118 mln

6% ₽

1% ₽

15% ₽84 mln

1% ₽92 mln

32% ₽113 mln

-3% ₽63 mln

-9% ₽84 mln

3% ₽338 mln

8% ₽83 mln

-1% ₽46 mln

232 mln

119 mln

Presnensky

SretenkaTverskoy

Patriarshie prudy

Chistye prudy

Tagansky

Zamoskvorech'e

Yakimanka

Ramenki

Khamovniki

Ostozhenka–Prechistenka

Pluschikha

Arbat

Sharein the total supply

Averageprice

> 11.5%5–11.5%< 5%

9% ₽ 77 mln

4


Structure of supply by districts


Property name Address Positioning segment Developer Property type

Number of lots in the

project

Fit out Дата ввода в эксплуатацию

Edison House 10 Elektrichesky Lane., bld. 1 (Presnensky) premium

Prioritet investment company

apartments 12 Fitted out Q3 2018

Maison Rouge 4 Palikha St., (Tverskoy) premium MR Group apartments 34 Without fit

out 2019

Manor (Residences on Sadovaya-Sukherevskaya)

10-12 Sadovaya- Sukharevskaya St. (Sretenka)

premium MR Group flats 7 Without fit out Q3 2018

Magnum 9 Usacheva St. (Khamovniki) premium Magnum De-

velopment apartments 44 Without fit out Q3 2020

Somelier28 Kosmodamianskaya Emb., bld. 1 (Zamoskvorechye)

premium Real-avto, Ltd. apartments 6 Without fit out Q2 2019

Narkomfin 25 Novinsky Bvd., bld. 1 (Presnensky) premium Liga Prav, Ltd. flats 46 Fitted out Q3 2019

Khamovniki elite – flats Fitted out

Yakimanka elite – flats Without fit out

New supply (new phases)

Sadovye kvartaly

11 Usacheva St. (Khamovniki) premium Inteko flats 142 Without fit

out Q3 2020

Bolshaya Dmitrovka IX (Poroda and Svet Mansions)

9 Bolshaya Dmitrovka St. (Tverskoy) elite INGEOCENTRE apartments 64 Fitted out Q2 2021


Complexes where sales started in H1 2018

the year the supply increased also due to entering new phases of already marketed objects: Bolshaya Dmitrovka IX apartment complex implemented two buildings at the market – Poroda and Svet. Also the new 4th phase within the scope of which block 5 is being built entered the market in Sadoviye kvartaly residential complex.

Just as before, premium class dominates the supply structure: by number of lots its share amounts to 56%, by area – 46%.

More than a quarter of the overall supply (28%) is fully fitted out according to results of the first half of 2018. Three out of 8 new objects presented such lots to their buyers.

More than 40% of the overall supply was focused in 3 districts:

7.1%

2.2%

4.3%

6.7%

7.9%

8.6%

10.9%

11.4%

13.2%

13.8%

13.8%

Other

Sretenka

Pluschikha

Taganskiy

Arbat

Presnenskiy

Yakimanka

Ramenki

Khamovniki

Zamoskvorechye

Tverskoy

5

RESEARCHH1 2018

Primary market supply structure


� Tverskoy (13.8%);

� Zamoskvorechye (13.6%);

� Khamovniki (13.2%).

During the previous quarter Ramenki district disappeared from the Top-3. Previously, in April 2018 the district occupied the second place with 13.3% share, now the district share dropped to 11.4%. First of all the decrease in supply volume in this location is attributed to high sale rates of Vishnevy Sad residential complex, which has been dominating by sales during the last half of the year.

The supply structure in the premium segment didn’t go through any serious changes during the past 6 months of 2018. As before, over half (56%) of all flats and apartments listed for sale were presented with budget up to 50 million rubles. According to H1 2018 the average price of flats in the premium segment was 56 million rubles, the average area – 98 sq m.

In the elite segment in January-June 2018 the elimination of the most budget supply (up to 50 million rubles) was noticed, during the first half of 2018 the share of such supply decreased by 7 p. p. On the back of it the average area of supply increased by 2% in 6 months and reached 146 sq m, the average budget of flats and apartments listed for sale was increasing faster during the first 6 months (+7%) and reached 134 million rubles.

Supply based on their area

Supply based on their price



56%

1%

9%

1%

33%

21%

22%

11%

5%

41%

Up to 100 sq m100–150 sq m150–200 sq m200–250 sq mMore than 250 sq m

Premium Elite

Narkomfin, 25 Novinsky Bvd., bld. 1

Up to 50 mln rub.

50–100mln rub.

100–150mln rub.

150–200mln rub.

Over 200mln rub.

31.0%

2.9%

0.0%

0.0%

0.0%

9.3%

24.9%

5.3%

0.0%

0.0%

0.5%

6.8%

6.1%

1.1%

0.0%

0.0%

1.4%

1.9%

1.7%

0.4%

0.0%

0.5%

1.6%

2.1%

2.3%

Up to 100 sq m

100–150 sq m

150–200 sq m

200–250 sq m

Over 250 sq m

52%

1%

7%

<1%

40%

10%

37%

8%5%

39%Up to 50 mln rub.50–100 mln rub.100–200 mln rub.200–300 mln rub.More than 300 mln rub.

Premium Elite

6


Dynamics of the number and average value of transactions in the premium segment

Dynamics of the number and average value of transactions in the elite segment


Primary market transactions structure


Structure of transactions by districts


DemandNear 300 transactions with flats and apartments were concluded on the primary market of high-budget residential real estate in Q2 2018. Thus, the number of sale transactions of flats and apartments was over 490 in H1 2018. As compared to the same period in 2017 the number of transactions increased more than by third. The total area of all lots sold in January – June 2018 exceeded 54,000 sq m.

In both segments increase in buying activity was noticed in 2018. In the premium segment the number of sold flats and apartments increased by 45% during the first half of 2018, as compared to the first half of 2017, and amounted to 328 transactions. The elite segment has also shown a positive dynamics: the number of transactions increased by 23% during the year; in other words, over 180 apartments in elite new buildings were sold in the first half of 2018.

However, as compared to the growth of quantitative indicators, quality indicators has shown negative trend. For example, in the premium segment the average area of sold lots was 95 sq m, which is 12% lower than the indicator of the first half

Up to 100 sq m

100–150 sq m

150–200 sq m

200–250 sq m

Over 250 sq m

Up to 50 mln rub.

50–100 mln rub.

100–150 mln rub.

150–200mln rub.

Over 200mln rub.

43.0%

6.4%

0.0%

0.0%

0.0%

6.2%

22.7%

6.4%

0.0%

0.0%

0.2%

3.4%

4.0%

1.0%

0.0%

0.0%

0.2%

1.6%

1.4%

0.6%

0.0%

0.0%

0.0%

1.6%

1.2%

6%3%3%3%

4%4%

5%9%

12%14%

15%21%

OtherArbat

PluschikhaChistye prudy

YakimankaSretenka

TaganskiyDorogomilovo

ZamoskvorechyeRamenkiTverskoy

Khamovniki

2017 2018

100

203040506070

0

20

40

60

80

100

120pcs

Supply volume Average volume

mln rub.

Jan Feb Mar Apr May June July Aug Sep Oct Nov Dec Jan Feb Mar Apr May June

0 0

60

120

180

10

20

30

40

50

60

2017 2018

pcs

Supply volume Average volume

mln rub.

Jan Feb Mar Apr May June July Aug Sep Oct Nov Dec Jan Feb Mar Apr May June

7

RESEARCHH1 2018



Transactions of the primary market based on their area

Transactions of the primary market based on their price

Leading projects

Barrin House

Sadovye Kvartaly

Vishneviy Sad

Kutuzovsky, 12

Roza Rossa

RENOME


ELITE

PREMIUM

of 2017; the average budget decreased by 5% and reached the level of 50 million rubles. In the elite segment the negative dynamics were even greater: the average area of sold lots dropped by 18% – from 159 sq m to 131 sq m, the budget decreased by one third – from 141 million rubles to 94 million rubles. The decrease in indicators in the elite segment is primarily attributed to active sales in new residential complexes, which recently entered the market and which offer the buyers attractive investment prices. Moreover, one of the recent trends is the shift of interest towards compact lots. The share of transactions for fully fitted out objects also stays stably high: it represented almost one in three transactions according to the results of the first half of 2018.

Traditionally Khamovniki district is the most popular location; this is where every fifth transaction took place in the first half of 2018. Tverskoy and Ramenki districts also entered the Top-3. In total half of all transactions were concluded in these three districts.

62%

8%

28%

28%

18%

9%3%

1%1%

41%

Up to 100 sq m100–150 sq m150–200 sq m200–250 sq mMore than 250 sq m

Premium Elite

63%

7%

30%

26%

22%

6%

2%

44%Up to 50 mln rub.50–100 mln rub.100–200 mln rub.200–300 mln rub.More than 300 mln rub.

Premium Elite

8


Dynamics of average price and supply volume

Ljublino

Izmajlovo

Mar'ino

Perovo

Krylatskoe

Pechatniki

Danilovskiy

Ochakovo-Matveevskoe

Lefortovo

Kuz'minki

Zuzino

Basmannyj

Khoroshevskiy

Ryazanskiy

Filevskiy Park

Dorogomilovo

Nagorniy

Troparevo-Nikulino

Nagatinskij Zaton

Nizhegorodskij

Sokolinaja Gora

Begovoy

CheremushkiObruchevskiy

Gagarinskiy

Kotlovka

Fili-Davydkovo

Tekstil'shhiki

Meshhanskij

Nagatino-Sadovniki

Akademicheskiy

Marina Roshcha

Krasnosel'skij

Juzhnoportovyj

Lomonosovski

Prospekt Vernadskogo

580 thousand rub./sq m

697 thousand rub./sq m -12%

1 730 thousand rub./sq m








+20%

+1%

-1%

1 387 thousand rub./sq m -3%

736 thousand rub./sq m +20%

+2%

577 thousand rub./sq m +6%

+9% +17%

+16%

Presnensky

SretenkaTverskoy

Patriarshie prudy

Chistye prudy

Tagansky

Zamoskvorech'e

Yakimanka

Ramenki

Khamovniki

Ostozhenka–Prechistenka

Pluschikha

Arbat

770 thousand rub./sq m -1%DynamicsAverage price

> 1 mln rub./sq m1 000–700 thousand rub./sq m< 700 thousand rub./sq m

Dynamics of average price


PricesThe average supply price in the primary market of the high-budget segment has slightly increased by 7% since the beginning of the year and according to the data by the beginning of July 2018 was fixed at 758,000 rub./sq m.

At the beginning of July 2018 the average supply price in the primary market in the premium segment increased by 2% and was recorded at 568 000 rub./sq m.

In the elite segment the average price increased even more: +9%, and was fixed at 919,000 rubles.

The highest price of 1,730 thousand rub./sq m was recorded in April 2018 in Patriarshiye Prudy area, the indicator for this district was stable during the first half of the year.

The less expensive new residential complexes are still located in Sretenka

district, where at the beginning of July the average price amounted to 504,000 rub./sq m. The indicator grew by 17% during the first half of 2018. The upward trend of the average price for the district was connected with structural changes, entering the market new Housing Complex Residences on Sadovaya-Sukharevskaya the price rise of already marketed objects.

© Knight Frank LLP 2018 – This overview is published for general information only. Although high standards have been used in the preparation of the information, analysis, view and projections presented in this report, no legal responsibility can be accepted by Knight Frank Research or Knight Frank for any loss or damage resultant from the contents of this document. As a general report, this material does not necessarily represent the view of Knight Frank in relation to particular properties or projects.

Reproduction of this report in whole or in part is allowed with proper reference to Knight Frank.

RESIDENTIALLudmila PotapovaDirector [email protected]

+7 (495) 981 0000

RESEARCHOlga ShirokovaDirector, Russia & CIS [email protected]

50

100

150

200

250

200

400

600

800

1,000

1,200

00Q1 Q2 Q3 Q4 Q1 Q2 Q2 Q3 Q4 Q1

2016 2017 2018

Supply volume, premium Average price, premium Supply volume, elite Average price, elite

thousand sq mthousand rub./sq m

prime residential real estate market - … · 3 h1 2018 research supply volume and average price...

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