388,107 sq m of new office space was completed in 2019, an increase of almost 3.0x compared to 2018 (133,277 sq m), but 5% lower than in 2017 (408,000 sq m). New supply completed In Q4 2019 accounted for more than 40% of the annual total. Around 86,000 sq m of new supply was delayed to 2020.

The vacancy rate at the end of 2019 fell by 2.1 p.p. to 9.1%, from 11.2% at the end of 2018, the fourth consecutive annual decline. CBRE expects the vacancy rate may decrease to 8.5-8.7% in 2020 but then rise to 9.2-9.5% in 2021-2022 alongside the increase in annual new supply.

Office take-up amounted to 1.8 million sq m in 2019, an increase of 25% y-o-y and the highest annual total recorded since 2007 (1.7 mn sq m). Annual growth in take-up has averaged 20% per year since 2015.

The weighted average asking rental rate at the end of 2019 stood at RUB 23,240 per sq m pa in Class A buildings (excluding Class A Prime) and RUB 14,930 per sq m pa in Class B buildings, marking an increase of 4% y-o-y and 2% y-o-y, respectively.