Real Chamber of Real Estate: negative macroeconomic trend might result in dropping demand for office space

August 25, 2014. Despite a certain slowing down of the increase in the commercial estate supply, a lot of buildings are still being put up, Ural Chamber of Real Estate’s analytical report states.

355,000 sq m worth of office buildings are currently being built, and 31,000 sq m were ready by the start of the year. The Chamber reports that, although new office facilities appear on the market all the time, the supply of vacant space hasn’t been rising over the last year. Quite on the contrary, the supply is on the decrease in some market segments. For one, the share of vacant office space in Class A business centers has dropped from 26% down to 21% over the last year, while the figure for the most popular Class B facilities declined from 15% to 13%. The only unaffected segment is Class B+ buildings, where the share of available office space remains at 7%.

‘This means the market is still active and the demand is comparable with the new supply for the time being. However, this trend is mostly related to the impulse given to it by the preceding, and not the current, developmental stage, so the negative macroeconomic trends might result in a serious drop in the demand for office space in the nearest future,’ the report says.

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