2021 results: offices on the rise

Offer

According to Maris analysts, as at the end of the year total rentable area of Class A and B office centers in St. Petersburg made up to 3.9 mln sqm. Among them: class A business centers made up t to 1.27 mln sqm, class В – 2.6 mln sqm.

In 2021 eighteen office buildings were put into operation with  total rentable area 157,000 sqm. 70% of new projects are speculative, two thirds of which belong to class B office centers.

For 2022 developers have announced the commissioning of about 360,000 sqm of office real estate (leasable area). In speculative segment, an increase of about 276,000 sqm (76%).  

In a favorable economic situation, the gross volume of the introduction of speculative office space in 2022, according to calculations, 2.5 will exceed the indicator for 2021.

Demand

The volume of lease transactions in class А and B office centers went beyond 255 ths sqm in 2020.    That is +14.7% to the indicator of 2020.

The demand, which was formed in 2020, continued to grow in class B office space segment in 2021. According to year results the volume of transactions in class B office centers have increased by +20.5%. In class A office centers have decreased by –1.5%.

The structure of transactions by spheres in 2021 for 26% of the gross volume of demand was formed by IT sector companies, 17% – by service sector and 9% – by consulting and business services.  

A significant increase in demand was formed by medical companies in 2021, which at the end of the year rented 2.5 times more space than 2020. The volume of office space absorption by the financial sector of economy has almost tripled. Service companies are also not inferior in terms of increasing demand for office space in region, doubling lease space in 2021 compared to 2020.  

By the end of 2020, the average area of rented block has significantly decreased on the market. In the segment of class A office centers this indicator in the analyzed period amounted to 690 sqm, against 1,700 sqm in 2020. In the segment of class B office centers the average size of the lease block decreased by 40% and amounted to 560 sqm, against 930 sqm in 2020.

Vacancy

At the end of the year, the gross volume of vacant space in high-quality office facilities of class A and B decreased, compared with the same indicator at the end 2020 and was 5.7%. In class A office centers 4.7% of the space is empty, in class B – 6.2%.

The reduction in the volume of vacant space, despite the increase in speculative supply last year, was ensured by the implementation of the deferred demand accumulated in 2020, to greater extent for office space in class B business centers.

By the end of 2021, the demand for offices in Petrogradsky, Kalininsky and Krasnogvardeysky districts of the city has increased. And, on the contrary, Vasileostrovsky and Admiralteysky districts have significantly lost their positions. At the same time, the decrease in the volume of transactions in these locations was due to the lack of a vacant liquid supply on the market.

Rental rates

The weighted average requested rental rate for vacant space in Class A buildings at the end of 2021 is 2,140 rubles per sqm per month, in class B buildings – 1,390 rub per sqm per month, including VAT and operating expenses. Compared to the same indicator at the end of 2020, the requested rental rates in class A business centers increased by +11.5%, in Class B - by +6.1%.

Speaking of transactions for the acquisition of assets in the office real estate market, 2021 has become a record year in terms of volume, since 2017. In 2021 twelve transactions with administrative and business assets with a total area of 130 thousand square meters worth more than 11 billion rubles were concluded on the St. Petersburg market.