COMMERCIAL REAL ESTATE MARKET - Knight Frank

2009
Commercial
real estate market
Moscow
Moscow.
Hotel real estate market
Main indicators of 3-5 Moscow hotels
Number of 3–5 hotels in operation 158
Room stock in 3–5 hotels 30,580
Hotels, opened in 2009 (hotels/room stock) 9 / 1,035
Average occupancy rate in 3–5 hotels 54.5%
Source: Knight Frank Research, 2010
• Room stock in 3–5 hotels has grown by more then 1,000 rooms, or 3.3 %.
• The number of foreigners who visited Moscow is 15% less.
• Occupancy rate for 5 hotels reduced by almost 18%.
• Rates in hotels in 4–5 categories decreased 35–40%.
• The total number of rooms in 3–5 hotels planned for commissioning in 2010
may be more than two times bigger than in 2009.
Hotels opened in Moscow in 2009
Title Address Category Number
of rooms
Q1
Volynskoe Congress–park 9 Starovolynskaya St 4 38
Aquarium (Crocus Expo) 66 km, MKAD 3 225
Q2
Grand Hyatt Residences & Spa Plot 13, Krasnopresnanskaya 5 25
(Moskva–city)
Emb
Holiday Inn Moscow Simonovsky 2 Simonovskiy Val St 4 217
Q3
Maxima Panorama 4 Masterkova St 3 123
Ibis Moscow Paveletskaya 22 b. 1 Schipok St 3 147
Q4
Kadashevskaya 26 Kadashevskaya Emb 4 35
Aquamarin 26 Ozerkovskaya Emb 4 159
Vosdushniy Express Sheremetyevo Airport – 66
Source: Knight Frank Research, 2010
The hotel segment of Moscow, as well as other
segments of the real estate market, developed
under the pressure of the world financial and
economic crisis throughout 2009. The level of
business and tourist activity decreased and, as
consequence, demand for accommodations in
city hotels reduced. The opening of several large
objects has been postponed until next year.
On a backdrop of advanced development for
other commercial real estate segments of
Moscow during the few years preceding the crisis,
the hotel real estate segment was relatively
less attractive as an asset for investors due
to long payback periods, high infrastructure
requirements, as well as requirements for
furnishing and location.
Nevertheless, even taking into account the
current demand, which has decreased under the
crisis’ conditions, one can note an insufficient
supply of modern hotel rooms in Moscow, as well
as good opportunities for investments into the
segment. Unlike during the pre–crisis period, the
activity of investors and developers during the
forthcoming years will be based more essentially
on a deep understanding of the market segment,
in which they operate, and a professional
approach to all stages of project development –
from pre–investment analysis of a situation and
an estimation of potential risks to choosing of
the appropriate time for bringing objects into
operation.
Supply
Since early 2009, 9 hotels in different categories
with a total of 1,035 rooms were opened in
Moscow, including the first capsule hotel in
Russia with 66 rooms, which was commissioned
in Sheremetyevo International Airport.
Opened hotels:
• 1 apartment hotel in 5 category – Grand
Hyatt Residences & Spa (“soft opening”),
which includes 18 apartments, located on
the 49th and 50th floors, also 7 SPA rooms
on the 60th floor in the “West” tower of the
Federation Tower complex in MIBC “Moscow–
City”;
• 4 hotels in 4 category with 449 rooms,
3 of which are located in the Central
Administrative District of Moscow and 1
("Volynskoe" Congress–park) in the West
Administrative District;
20