The demand for large space elite apartments exceeded supply

04 October 2013

The interest of wealthy buyers in elite apartments of Moscow with an area of over 200 square meters has reached pre-recession levels, as observed by the analysts of international consulting company Knight Frank. Today, the demand for high-quality large space apartments exceeds supply.

Among the large apartments, the buyers prefer objects ranging in size from 220 to 250 square meters (31% of total supply stock on the prime property market, as 46% of demand falls with them) and the average purchase budget is $ 6.3 million. Buyers are not just looking for spacious accommodation, but for comfortable apartments to live in that are located in the houses with well-developed infrastructure.

In the beginning of September 2013, the share of apartments measuring more than 220 square meters amounted to 25% of supply stock on the prime property market, with an average weighted price per square meter for such facilities reaching $ 23,710. The average asking price of an object was $ 7.7 million. Apartments ranging in size from 300 to 500 square meters prevail within the supply structure of apartments larger than 220 square meters.

A considerable supply stock volume of large apartments on the new-builds market is located in Khamovniki, with half of the total volume located in apartment complex Knightsbridge Private Park.

It should be noted that when the prime residential real estate market was just beginning to develop, apartments of such size were present in many projects. This was largely due to the fact that in the developers’ minds “elite” meant “big”. Mainly large apartments were offered in the segment of club houses (Butikovskiy Ln. 3, Molochny Ln. 1, Levshinskiy M. Ln. 5, Granatny Ln. 6 and 8, First Zachateisk Ln. 19 and 21, etc.). At present, the share of large apartments in elite residential complexes ranges from 5% (AC “Italian Quarter”) to 13-15% (AC “Afanasievskiy”). Furthermore, apartment complexes oriented primarily towards larger properties appeared on the market (AC Knightsbridge Private Park).

The share of large apartments on the prime property market of Moscow is much smaller: it does not exceed 9% of the total supply stock. The main share of such properties is concentrated in the MIBC “Moscow City”, in particular in the complex “Gorod Stolits”. The average weighted price of apartments sized over 220 square meters offered on the market is 14,000 $/sq m. The highest demand falls with apartments in the highlight projects of Moscow with modern finish and good view characteristics.

Olga Bogoroditskaya Director, Residential Real Estate Key Client Management, Knight Frank: “In 2008-2009, we observed a drop in demand for large space apartments under the influence of financial crisis, however since 2010, the interest of buyers towards such objects began to restore. Today, apartments with 3-4 bedrooms equipped with en-suites and walk-in closets for each bedroom are in high demand. The buyers’ demand for other utility rooms (laundry rooms, storage rooms, etc.) also grows. Considering the lack of such offer in the new-builds segment, the demand is often met by combining several neighboring apartments. It is more difficult to find properties with the aforementioned parameters on the re-sale market, particularly with quality repairs done. We expect that the entry of new elite residential projects will balance supply and demand in this market segment. As already in the beginning of the coming year, closed sales of fully furnished spacious apartments with designer finish will resume in an apartment complex located within walking distance of the Kremlin not inferior to the legendary London Cornwall Terrace.”