The vacancy rate in Moscow business centers reached 7.2% in the first half of the year, up 2.7 percentage points from the same period last year.
Experts forecast that the figure could climb to 10.6% by year-end.
The primary drivers behind the increase are a substantial influx of new office projects coming onto the market and cooling demand from businesses. Companies are expanding more cautiously, revisiting their expenses, and are not always prepared to lease new spaces amid economic uncertainty.
For the market, this translates into growing competition among business center owners and potential downward pressure on rental rates. If vacant office spaces increase, developers and lessors will have to compete more aggressively for tenants – offering discounts, flexible terms, and shorter lease contracts.
“Slowly and sadly, the office real estate market is adjusting to the structural transformation of the Russian economy. Demand for office workers will decrease proportionally as well,” forecasts Sergei Khestanov, economist and associate professor at the Russian Academy of National Economy and Public Administration (RANEPA).