Brokers divide up the cake

Last year brokers participated in a much greater number of deals on the St Petersburg office market than in 2011. At the same time the situation in the trading and industry segments is the reverse. The competition between the agents is growing, the geography of their work is expanding.

According to the rating provided by the colleagues from CRE, 11 leading brokerage companies in 2012 realized 140 000 sq. m of office premises (252 deals), as opposed to 86 220 sq.m in 2011. The figure for sales premises was 115 620 sq.m (420 deals). A year earlier the extent of business amounted to 282 158 sq.m. In 2012 172 579 sq.m (38 deals) of storage and industrial premises were sold and let out, as opposed to the total figure of 236 000 sq.m in 2011.  

Active renting

Brokers gain their main profits not so much from conducting sales but from letting out of commercial objects. This is easily explained: there isn’t much investment money on the market, and the purchases are usually made by the final users of the objects. Thus, all the 16 deals closed in 2012 by the St Petersburg office of GVA Sawyer were connected with renting. Out of 24 operations with office premises conducted by Jones Lang LaSalle, there was only one sale (a business center on Krestovsky prospect with an area of 7300 sq.m). The firm has 79 lease agreements of sales premises and not a single sale and purchase agreement in this sector to its credit. The company Best. Kommercheskaya Nedvizhimost also has only one sale (a business center on Vasilievsky Island with an area of 5000 sq.m.) out of 75 deals with class B office  premises (13 347 sq.m.).

The competition between the professional participants of the market has been growing. Major owners of commercial premises make their contributions, usually realizing premises by the way of direct sales. For example, the managing company Senator rented out 35 000 sq.m. in the class A business centers of the same name – more than anybody else did in St Petersburg. 

The deal of year in the office segment became the lease agreement for one of the towers of the “Yupiter-1” complex (the International Company for Finance and Investment “AEROPORTCITY St Petersburg”). Premises with an area of 10 000 sq. m. are rented by Gazprom Invest Zapad. The company Maris| Part of the CBRE Affiliate Network which is in charge of the office part of the ICFI acted as the broker.

Two months earlier this firm successfully closed two other major deals on leasing office premises. For example, it rented out 2000 sq.m. in the business center “Senator”  on the 18th line of Vasilievsky Island (class A) and to an IT-company and helped one of the logistics firms move into an office mansion (around 1000 sq.m.) in the grounds of the business quarter on Sverdlovskaya nab. That is being created by the managing company Teorema. Altogether the company realized 26 000 sq.m. of class A offices. The next deal on the scale was closed with the help of East Real in October: the company Jetbrains rented the whole of the new business center Univers (5200 sq. m).

The most notable transaction for Colliers International became the agreement with the company Gazprom (3330 sq.m. in the class A business center “Renaissance Forum”). For Colliers the year was generally very bright. In Russia the companies consultants closed over 1000 deals in all sectors of the market (over 600 000 sq.m. in total ), and the profit of the St Petersburg office reached the pre-crisis figure of 2008. 

The company brought lease-holders to 55 612 sq.m. in shopping centers (not including street retail) thus becoming the leader of the market (247 deals). Among the clients are the shops H&M (the shopping mall “RIO”), Bershka/Pull&Bear/Stradivarius (the shopping mall “CityMall”), the movie theater chain “Kronwerk” (the shopping mall “Evropolis”), the Group of Companies “Formula Kino” (the shopping mall “Evropolis”, the shopping mall “Zhemchuzhnaya Plaza” and the shopping mall “Titan Arena” in Arkhangelsk), the general store “Detskiy mir” and “” (the shopping mall “Zhemchuzhnaya Plaza”), the Austrian children’s theme park “Minopolis” (the shopping mall “Evropolis”) and the two restaurants “Shchast’e” belonging to the company Global Point (the hotels “Angleterre”, and “Corinthia”).

The real needs

Knight Frank Saint-Petersburg is leading in the sector of leasing of industrial premises. The biggest transaction of the year took place in March when the distributor of computer equipment Marvel-Distributsiya rented 13 000 sq.m. of store and 1000 sq.m of office premises in the terminal “Logopark Shushary” for three years – due to branching out.

At the end of June the company PRISMA rented with the help of Knight Frank 10 000 sq.m. of warehouses in the logistics complex Nordway for the period of over five years. In the industrial park “Zvezda” Knight Frank rented out as the exclusive broker around 30 000 sq.m. of production premises: 5000 sq.m. to the producer of professional fitness equipment  FOREMAN, 5500 sq.m. to the holding PetroEnergoServis (electro-technical equipment). The companies Schaefer (automatization of warehouses and logistics planning) and Ergon (the producer of the  car components from plastics and polyurethanes). They rented 5000 sq.m. each of industrial and altogether 1000 sq.m. of office premises for five years.

Other brokers also acted as worthy competitors. Colliers International has 20 000 sq.m. (five deals) to their credit. Although, according to Nikolai Kazansky, the general director of the Russian branch, the year was not a very busy one for the North-West from the point of view of demand for industrial and storing premises. The clients were mostly interested in projects in Moscow and the Moscow Oblast.

Elena Shevchuk, the vice-president for commercial real estate of GVA Sawyer, thinks the deal on finding premises for SUMITEK INTERNATIONAL – 8000 sq.m. in the class B+ industrial complex on Volkhonskoe shosse - was a success. The “little daughter” of the Japanese corporation Sumitomo Corporation joined under the same roof a service center with an area of 2 800 sq.m., a representative office – 1500 sq.m. and show room – 700 sq.m. The company also rented an open show floor for heavy equipment (3000 sq.m.).


As leasing is the most dynamic trend in broker business, firms count the growth of the “exclusives” portfolio as a success. Thus, in 2012 the company Maris | Part of the CBRE Affiliate Network became the only broker for leasing the class A business center Renaissance Premium (the developer - Renaissance Development). The total area of the object is over 20 000 sq.m.

Colliers International signed exclusive contracts on five major shopping centers (the shopping mall London Mall, “Nevsky Center Stockmann”, and shopping centers in Saratov, Murmansk and Petrozavodsk). As a result it has the biggest portfolio of exclusive retail facilities – in total over 600 000 sq.m. of leasable areas. And in the office segment Colliers signed two exclusive contracts – on the business centers “Luch” and “Moskovsky 151”.

Co-exclusive brokers Knight Frank St. Petersburg and East Real began yet another campaign for “Nevskaya Ratusha”. Knight Frank has the exclusive right to select clients for the future logistic complex in the Pulkovo zone with an area about 100 000 sq.m. created in partnership with the «А+ Development» company.

Saleable rarities

Purchase and sale transactions are mostly happening in the area of street-retail. Apart from the above mentioned major operations there was an investment transaction with the shopping center “SuperSiva” with the total area of over 9000 sq.m. It was sold to the investment fund managed by Jensen Group. The transaction was carried out by Knight Frank St. Petersburg. Colliers International realized 40 000 sq.m. of industrial areas (the details haven’t been publicized yet). Altogether Colliers closed in 2012 in St Petersburg three deals with the total sum of $37 million including the purchase of operating facilities for redevelopment, and also land plots.

The NAI Becar company not only as a broker but also as an investor putting together with a partner  510 million rubles in the purchase of the shopping center “Smile” (the total area is 10 969 sq.m.). The company is planning to increase the earning power of the complex and to sell to an institutional investor in 3-5 years.

Seasonal work

There aren’t too many major transactions, especially not in St Petersburg. Here, according to the information from Jones Lang LaSalle the volume of investments in commercial real estate in 2012 went down to $860 million (from $2.3 billion in 2011). At the same time the all-Russia figure reached $8.6 billion (higher than the estimated figure).

So those brokers are better off who do not confine themselves to the local market. For example, those who work with chain retail. As a matter of fact, at the moment dealers are actively investing into towns with the population of less than 500 000 people.

The NAI Becar company even invested its own capital in a commercial housing estate of 240 apartments (with the total area of 18 000 sq.m.) in Texas. It will also act in the role of managing company.

In terms of purchase and sale transactions the Auction House of the Russian Federation is gradually becoming one of the leaders of the broker market, realizing the active assets of its share-holder – Sberbank and also the property of other owners.

In 2012 AHR realized about 500 real estate objects (approximately 20% of the total number of the active assets sold) through classical auctions and direct sales: 96 buildings, 346 non-residential units and 71 land plots. The total sum of the sales amounted to 10 billion rubles. (Deals were also closed for the lease of 45 inbuilt objects) 

In St Petersburg the biggest transaction was for the land plot - with an area of 2.8 hectares on Primorsky prospect - that formerly belonged to the construction firm LEC. The land plot was realized for 850 million. Apart from that the structures of the holding company Forum paid 141.1 million rubles for the units with the total area of over 4500 sq.m in a building at the crossing of the streets Krasnogo Tekstilshchika and Moiseenko. The building with a land plot on 6 Varfalomeevskaya Street that belonged to the First Exemplary Printing House was sold for 77 million. The object on Oktyabrskaya nab., 56, lit. B, belonging to the airline company Rossiya Airlines was sold by auction for 40.1 million.

One of the biggest regional transactions of the company are the sales of 3/10 of the portion of property in the building of “Hilton Moscow Leningradskaya” hotel (1.083 billion rub.), of 100% of the portions of Gostinitsa “Rostov” (750 million rub.) and of the shopping center “Klondaik” in Rostov-on-Don (326 million rub.).

Natalia Antropov
"Real estate and construction of Petersburg"