In Moscow, 2014 saw a boom in new office development, with grade A and B supply exceeding more than 1 million sq m over the course of the year. But this proved to be badly timed given the economic conditions and global investor sentiment in Russia.
Economic sanctions and a plummeting oil price have taken their toll on the market.
Record new supply, combined with a falling number of deals, has resulted in rising vacancy rates and falling rents.
Many companies are seeking to renegotiate lease terms. Unsurprisingly, global companies, particularly those in the finance and business services sector, have seen the sharpest contraction in activity. By contrast, and in common with many of the other global centres monitored here, the TMT sector is the most active and accounted for around a quarter of all leasing activity last year.
Due to current economic and geopolitical issues, the outlook for the Moscow commercial property market is poor.
Companies are likely to be extra cautious in their activity, with expansion or relocations put on hold. This, set against the glut of new supply the market saw last year, will put further downward pressure on rents in 2016 and 2017.