1H 2024 developers acquired 560 hectares of land for construction in St. Petersburg and Region
In the first half of 2024, developers acquired 560 hectares of land for construction in St. Petersburg and the Leningrad Region, investing 36 billion rubles. Investments in commercial real estate during the same period totaled approximately 20 billion rubles. Overall, according to estimates by the Petersburg Real Estate Consulting Center, total investment declined by 8% compared to the same period last year.
The largest transactions, according to the Consulting Center's experts, involved the acquisition of land plots in the Lomonosovsky District of the Leningrad Region by developers GloraX and Dogma. GloraX purchased approximately 174 hectares in Lagolovo and 46.5 hectares in the Annino rural settlement, while Dogma announced its entry into the region by acquiring over 258 hectares in the Villozi rural settlement. A notable commercial real estate transaction was the acquisition of a hotel project near the Mars Field ('Marsovo Pole') by a Gazprom-affiliated entity.
Commenting on the real estate market situation, Olga Trosheva, Director of the Petersburg Real Estate Consulting Center, noted that corporate investment activity is being constrained by the high key interest rate and rising inflation following a sharp drop last year.
Land for Construction
In total, 25 transactions involving the purchase of land plots totaling 560 hectares and valued at 36 billion rubles were concluded in St. Petersburg and the Leningrad Region between January and June 2024. While the total area of the acquired plots was nearly five times larger than that of the previous year's deals, the total value increased by only 44%. Experts attribute this to a shift in demand patterns: whereas last year developers focused on acquiring plots within the city, which are smaller in size but more expensive, in 2024 they concentrated on sites near the Ring Road (KAD) and in the suburbs, which accounted for more than half (54%) of all transactions. The largest deals in St. Petersburg involved the acquisition of 11.7 hectares in the settlement of Smolyachkovo (Kurortny District) and 11.6 hectares on Samoylovoy Street (Frunzensky District).
The share of sites designated for redevelopment fell to 28%, reflecting a trend toward preserving industrial zones in St. Petersburg. The share of sites acquired for apartment construction also decreased, dropping to 7%.
According to Olga Trosheva, investor activity is also being dampened by the failure to implement new land-use and zoning regulations during the first half of the year; this creates added risk for sites that could face new restrictions.
Commercial Real Estate
Investments in commercial properties totaled 19.7 billion rubles. Office and hotel properties led the market in the first half of the year, driven primarily by the exit of foreign companies. For instance, JetBrains sold the Lotos Towers office center to Petrovich DIY Retail, while the Renaissance Forum business center and the Crowne Plaza hotel were sold by the Turkish developer Renaissance Construction to the company Innovations & Development ('Innovatsii i Razvitie'). These transactions, along with the aforementioned sale of the hotel project on the Marsovo Pole, constituted the bulk of commercial real estate deals. Due to a shortage of high-quality supply, warehouse and retail properties did not attract significant investment volumes.
Price trends
Prices differ depending on location. In the city center, the price spread between various properties has widened; prices now range from 30,000 to 120,000 rubles per square meter of improvements on new development sites, and from 40,000 to 110,000 rubles on redevelopment sites. In residential districts, the price range increased by 10,000 rubles, settling at 35,000–70,000 rubles per square meter of improvements, whereas in the suburbs it has decreased due to the acquisition of large tracts of land for comprehensive development, settling at a level of 8,000–10,000 rubles. At the same time, sellers of plots within city limits are raising prices but remain open to various acquisition schemes.
Source: Fontanka.ru
Link to the original publication: https://www.fontanka.ru/2024/07/19/73851029/