Q1 results: office segment remains stable
Offer
According to Maris analysts, the leasable area of Class A and B office centers in St. Petersburg at the end of the 1st quarter of 2023 amounted to 4.1 million sqm. Among these, the area of Class A business centers is 1,388,300 sqm, Class B - 2,713,400 sqm.
In Q1 2023, eight office buildings were put into operation, with a total leasable area of 49,061 sqm. Of which 88% of the office supply is speculative and is offered for rent. 48% of the gross speculative input fell on Class A office centers, 52% – Class B, respectively. In the first quarter of 2023, the volume of speculative input exceeded the same indicator of 2022 by 8.5 times.
By the end of 2023, developers have announced the commissioning of about 110 thousand square meters of office real estate (leasable area). In the speculative segment, a gross increase in the supply of about 100 thousand square meters is expected (91%). In case of a favorable economic situation, the gross volume of commissioning of speculative office space in 2023, according to preliminary estimates, will be 10% lower than in 2022.
Office centers put into operation, Q1 2023
|
Title |
Class |
Address |
Leasable area, sqm |
Type of offer |
|
|
|
Senator |
A |
Millionnaya str., 6 |
11,857 |
Rent |
|
|
|
Senator |
A |
Millionnaya str., 5 |
8,714 |
Rent |
|
|
|
George Landrin |
B |
B. Sampsonievsky pr., 77 |
7,499 |
Rent |
|
|
|
Tavrichesky 7 |
B |
Tavrichesky lane, 7, bld. 1 |
7,400 |
Sale |
|
|
|
RBI Levashovsky |
B |
Barochnaya str, 4A, bld. 1 |
6,000 |
For own needs |
|
|
|
Afonskaya 2 |
B |
Afonskaya str., 2 |
2,892 |
Rent |
|
|
|
Obvodny Dvor |
B |
Obvodny canal emb., 199-201 |
2,700 |
Rent |
|
|
|
Kirochnaya 67 |
B |
Kirochnaya str., 67, |
2,000 |
Rent |
|
|
|
Total |
|
|
49,061 |
|
|
|
Source: Maris
Demand
The gross volume of rental transactions in Class A and B business centers in the Q1 2023 amounted to a little more than 40 thousand square meters. Relative to the indicators of the Q1 2022, the volume of demand in the segment of high-quality office real estate decreased by -25.9%.
The leaders in terms of demand in Q1 were enterprises in the service sector for the population and companies in the oil and gas sector and their affiliated structures (18% and 17%, respectively). In absolute terms, the volume of demand from the oil and gas sector increased by 82%. Enterprises providing services to the population rented 41% less office space in three months than a year earlier.
Vacancy
As of the end of March 2023, about 468 thousand square meters are available in St. Petersburg. According to the results of the Q1 2023, the average level of vacant space in high-quality office facilities of class A and B increased by +0.2 percentage points, compared with the same indicator at the end of 2022, and amounted to 11.4 as of the end of March 2023.
The increase in the volume of vacant space in the analyzed period was primarily due to the increase in new speculative supply.
At the end of March 2023, 163 thousand square meters or 11.8% of the space are vacant in Class A office centers (+0.3 percentage points by December 2022). In Class B, the vacancy rate was 11.2% (+0.2 percentage points by December 2022), or approximately 305 thousand square meters in absolute terms.
Rental rates
In the Q1 2023, the St. Petersburg office real estate market showed positive dynamics of price indicators.
According to the results of the Q1 2023, the weighted average rental rate for vacant space in Class A buildings is 2,150 rubles per sqm per month, including VAT and operating expenses, the rate increased by +3.4% (compared to the same indicator at the end of 2022).
The rental rate in Class B buildings is 1,430 rubles per sqm per month, including VAT and operating expenses, the rate increased by +2.1% in the Q1 2023 (relative to the final indicators of 2022).
In 2023, provided that demand activity remains at the current level and relatively low volumes of growth in new speculative supply, the level of requested rental rates will remain stable.