From January to March 2022, commissioning of offices in Saint Petersburg reached 5 thousand square meters only, the record low for the last 10 years. This represents a 89.9% decrease of the new supply year-over-year.
The total amount of high quality office spaces on the St. Petersburg market reached 3.95 million sq. m, up by 2.6% in annual terms. Approximately 180 thousand sq. m currently are under construction and planned for commissioning during the year 2022.
The office real estate market was recovering strongly in 2021, successfully overcoming pandemic uncertainty and reduced developer activity. Since the Q1 2022, however, inflation that seriously affects raw materials supply, international trade sanctions and broken logistical chains turn market expectations in a negative direction. Therefore, completion of newly developed objects can be delayed, hence the annual offices commissioning volume in 2022 may turn out to be less than previously expected.
The market supply of new or renovated office spaces is a key factor shaping the market potential for professional office furniture, in short to medium terms. We are tracking this indicator more closely, including particular office buildings and business centers commissioned and under construction, within our extended Market Reports.
