Demand for offices in Moscow is growing due to an increase in the need for them from businesses amid the acceleration of the economy, CORE.XP analysts have found out.
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Experts note that high demand will keep the vacancy rate at a historical low this year. In the first half of 2024, net absorption of offices (change in occupied space over the period) in Moscow increased 2.7 times YoY and amounted to 656 thousand sq. m. m.
The growth occurred against the backdrop of an acceleration of the economy, which expanded by 4.7% y/y in the first half of 2024, according to the Ministry of Economic Development.
In a strong economic climate, companies' operations are expanding and their need for new office space is growing. Thus, there is a relationship between economic growth rates and net absorption of office space.
The Bank of Russia released an updated forecast in July, in which it increased the expected growth of the Russian economy in 2024 from 2.5–3.5% to 3.5–4.0%.
Thus, the pace of the Russian economy is expected to be at or above the level of the previous year, which creates the precondition for sustainable net absorption of office space and maintaining the share of vacancy in Moscow at the level of 5-6% until the end of this year, which is historic minimum compared to previous years.
Analysts note that high demand for office space, which outstrips supply, creates the preconditions for maintaining strong conditions in the office space market this year.
