Small formats lead the way
In the capital's market for street retail premises located on the ground floors of residential buildings, interesting changes occurred in the second quarter of 2024. The exhibition volume in square meters has increased, and demand has also increased. The wait-and-see pause that some investors have been taking appears to be coming to an end. More and more small players and citizens prefer to invest their savings in small, compact premises in new buildings. MK found out who is ready to buy an entrance ticket to this promising market and under what conditions.
As Est-a-Tet development director Roman Rodiontsev said, in the second quarter of 2024, in the old housing stock, the number of objects on display remained virtually unchanged. At the same time, in square meters the volume of supply increased by 5.2%. In the segment of new buildings, the number of objects in supply decreased by 5.8%, although in square meters an increase in supply volume of 2.6% was recorded. This indicates an increase in the activity of small investors who prefer to invest in small, compact premises in new buildings.
In April-June, price growth slowed down. The weighted average supply price for street retail premises was 375.6 thousand rubles/sq.m. m, which is only 0.9% higher than the previous quarter. The slowdown in the growth rate of the weighted average price is due to both the consolidation of lots and the “shift” of exposure towards the old housing stock.
At the end of June, the supply volume on the market for commercial premises located on the ground floors of residential buildings amounted to 384.5 thousand sq. m or 1.9 thousand lots. In terms of supply volume, the Central Administrative District is still the leader, accounting for 17.8% of supply. The second place, as in the previous quarter, is occupied by CJSC, its share was 16.8%. In third place is SAO with a share of 13.5%.
The first place in terms of price level is still occupied by the Central Administrative District (587.6 thousand rubles/sq. m). CJSC came in second place with a price of 389.6 thousand rubles/sq. m. Southern Administrative Okrug moved to third place with a price of 372.8 thousand rubles/sq. m.
“Many buyers first want to purchase premises in the Central Administrative District, but due to the high cost of 1 sq. m. m, in the end, they choose residential areas with massive development,” noted Roman Amelin, sales director of the premium real estate agency Point Estate. According to him, the most popular locations at the end of June 2024 are Tsvetnoy Boulevard, interest in which has been increasing in recent months, as well as Pokrovka, Myasnitskaya Street, Patriarch’s Ponds. Demand over the same period increased slightly, by only 8%. The increase in buyer activity occurred due to the expansion of chain retailers and the entry of new players into the market (including food products, farm stores, etc.). “Among the tenants, the most active are supermarkets, liquor stores, and pick-up points,” noted SimpleEstate CEO Nikita Kornienko.
According to Rodiontsev, in the second quarter, street retail premises were offered for sale in 121 districts of the capital. The leader in terms of supply volume, as in the previous quarter, is the Danilovsky district, in second place is Solntsevo, in third place is Filevsky Park. The top ten districts with the highest price per square meter are headed by the Tverskoy district (773.0 thousand rubles/sq. m). In second place is Khamovniki (687.4 thousand). In third place is Zyablikovo (677.7 thousand). Also included in the TOP 10 most expensive districts are: Presnensky (665.1 thousand), Donskoy (603.5 thousand), Arbat (595.5 thousand), Ochakovo-Matveevskoye (595.2 thousand), Basmanny ( 583.5 thousand), Kuzminki (581.1 thousand) and Chertanovo North (570.1 thousand). Location has a significant impact on the cost of square meters. Thus, premises located in peripheral areas in close proximity to a metro station may cost more than premises located in the center of the capital, but at a distance from the main pedestrian and transport flows. Also, changes in exposure have a significant impact on the price level, especially in areas with a small supply volume.
The weighted average supply price in new buildings is 401.9 thousand rubles/sq.m. m, in the category of residential buildings built before 2015 — 356.0 thousand rubles/sq. m. m.
In the supply structure by lot size, the largest share is for premises with an area of 50 to 100 sq.m. (33%) and area from 100 to 150 sq. m (22%). Compared to the previous quarter, there was a slight shift towards larger areas — over 400 sq. m. m. Over the quarter, their share increased by 3 percentage points. and reached 10%. At the same time, the share of objects with an area of less than 50 sq. m decreased over the quarter by 2 percentage points.
Market participants noted another interesting trend: Moscow developers have begun to independently search for tenants for street retail premises in their residential complexes more often. According to Alexander Buyankin, head of the commercial real estate department at Barnes International Moscow, the number of such cases in January-May 2024 increased by 20% compared to the same period last year. Construction companies are increasingly less likely to give their properties to third-party brokers for sale, but are doing this independently through their own rental departments or sales departments.
“Metropolitan developers prefer this scheme because they can earn more than from selling “empty” square meters. They either receive rental income or sell them later, but as a ready-made rental business. And such a strategy, in our opinion, is completely justified,” said Buyankin. In his opinion, over time, such a model will become increasingly popular among developers, primarily large ones who can afford the costs of their own sales or rental departments. But small companies will continue to sell commercial premises with the help of third-party real estate agencies.
“There is a tendency for compact lots to be washed out. Ready-made premises are in demand. Price growth has slowed. All this indicates an increase in the activity of small investors who prefer to invest in small, compact premises in new buildings. The wait-and-see pause that some investors have been taking is coming to an end. We are already seeing players returning to postponed negotiations. Market redistribution opens up new opportunities for growth, and now more than ever it is important to respond instantly to changes,” Rodiontsev emphasized.
According to Amelin’s forecast, in the third quarter of 2024, demand for the purchase of street retail in the capital will be traditionally low and will resume growth in September-October.