1. RESEARCH
H1 2009
MOSCOW
Office market report
Highlights
• As a result of the global economic crisis, demand for office space in Moscow
has greatly reduced and rental levels have fallen. In light of this, it is
increasingly common for existing tenants to seek to renegotiate lease terms.
• Office rents have more than halved since the middle of 2008. The average
class A rent (excluding VAT and operating expenses) has fallen to $600 per
sq m per annum, while the average class B rent currently stands at $400 per
sq m per annum.
• Large volumes of new space have continued to come to the market, with
approximately 950,000 sq m of new high quality offices, including 250,000 sq m
of class A premises, being released during H1 2009. This has, though, created an
imbalance between supply and demand, and vacancy rates have risen sharply,
reaching 19% for class A offices and 20.5% for class B space.

2. H1 2009
MOSCOW
Office market report
Moscow City
(Moscow International Business Center)
19 18
19 Complete
18 17 1st Krasnogvarde
ysky proezd
Partially
16a 16b 1 Complete
20 21
13 14 15
12 2009
11 Expocenter
8a 8b 7 6 2010
2 Under design
10
9 4 3
Kras Suspended
nopr
esnens
kaya naberezhnaya
Mosc
ow River
0
Moscow City – developments
Site Development Total size (sq m) Office component (sq m) Status Completion
- Expocenter 85,000 - partially complete 2009
0 Tower 2000 61,067 50,000 complete 2002
1 Parking 170,101 - under construction 2010
2 Public Square and Moscow City Museum 19,000 - under construction 2010
3 City Palace Tower 169,000 80,000 under construction 2010
4 Imperia Tower 287,724 98,247 under construction 2010
6 Central Core Parking & Metro Terminal (Underground) 278,000 - under construction 2010
6 Central Core Public Complex 22,000 - under construction 2010
7-8b Mall of Russia 179,930 - under construction 2009
8a Multifunctional Recreation Complex 50,190 - under design n/a
9 Capital City Complex 288,680 72,315 partially complete 2009
10 Naberezhnaya Tower 254,000 150,000 complete 2007
11 Transport Terminal 228,000 122,450 suspended
12 Eurasia Tower 203,104 82,817 under construction 2010
13 Federation Complex 423,000 181,800 partially complete 2010
14 Mercury Office Tower 158,528 86,000 under construction 2010
15 Moscow Government Administrative Complex 636,330 n/a suspended
16a Multifunctional Office-Administrative Complex 249,600 122,500 suspended
16b Parking 180,000 - under design 2011
17-18 Russia Tower 565,000 140,000 suspended
19 Northern Tower 136,580 78,000 complete 2008
20 Multifunctional Business-Expo Complex 180,000 70,936 suspended
21 Yuri Dolgoruky n/a n/a under design 2011
Source: Knight Frank
2

3. www.KnightFrank.com www.KnightFrank.ru
Moscow
Fourth Transpo
rt
Key projects 2009
Ring
completed under
construction
Class A
14
Class B+
Knight Frank is
project consultant
ay
Highw
10
oye
rovsk
Dmit
Greenwood
ra
(130,500 sq m)
Prospekt Mi
MirLand
(75,000 sq m)
Dvintsev
16 (58,000 sq m)
Le
ni
ng
ra Ring
ds
ky Third Transport ya S
tr
Av ka
en vs
8
Str
ue
ko
sa
ya
Monarch 8.1
Ru
nue
ka
(192,800 sq m) Tv
ds
er
Mira Ave
sk
bo
ay r
12 Diamond Hall 8.2 St
slo
aS
tr (61,500 sq m) ya
na
Novo
rud
Nordstar Tower nop
White Square as
(148,000 sq m)
Garden Ring Domnikov
Kr
(74,000 sq m)
4 (132,000 sq m)
7
9.1 13
7.1 5
WTC, phase III 7.2
(70,000 sq m) Novy Arbat Str 1
ue
Capital City, phase II en
(52,700 sq m)
ky
Av 3 Entuziastov Highway
ovs
tuz
Ku Legion III, stage II
(46,000 sq m)
Barkli Plaza
(24,600 sq m)
9.2 17
Nizh
7.3 egorod
skaya S
Vo tr
lg
og
ra
2 ds
7.4
en
ue
ky
Av 9
Av en
ue
y
Vivaldi Plaza
sk
(100,500 sq m) 9.3
Mytn
ol
om
ue
os
aya S
6.1
en
m
6
Av
Ko
ky
tr
ns
ni
6.2
Le
Nagatino i-Land
11 (216,900 sq m)
15
1. Central Business Districts 6. TTR South 8. TTR North 10. FTR North
2. GR South 6.1 Leninsky 8.1 Tverskoy-Novoslobodsky 11. FTR South
3. GR West 6.2 Tulsky 8.2 Prospekt Mira 12. FTR West
7. TTR West 9. TTR East 13. FTR East
4. GR North
7.1 Presnensky 9.1 Basmanny 14. MKAD North
5. GR East 15. MKAD South
7.2 City 9.2 Tagansky
Borders of business districts 16. MKAD West
7.3 Kievsky 9.3 Volgogradsky
Borders of subdistricts 17. MKAD East
7.4 Khamovniki
GR = Garden Ring
TTR = Third Transport Ring
FTR = Fourth Transport Ring
3

4. Table 1
Moscow submarket data
Transport Direction Sub Max prime Average Average Transport ring Stock Vacancy Transport
ring district rent ($ per class A rent class B+ rent average rent (class A and rate ring vacancy
sq m pa) ($ per sq m pa) ($ per sq m pa) ($ per sq m pa) B+) (sq m) rate
1 Boulevard Ring Centre CBD 1,100 850 700 800 590,400 19.3% 19.3%
2 Garden Ring South GRS 1,050 800 500 650 764,000 14.4% 12.1%
3 West GRW 850 750 700 533,300 5.8%
4 North GRN 850 700 650 609,000 10.3%
5 East GRE 850 700 550 217,400 24.7%
6.1 Third Transport Ring South LEN 800 700 600 600 132,200 12.9% 22.7%
6.2 South TUL 700 650 450 523,100 20.9%
7.1 West PRES 750 700 450 186,400 29.1%
7.2 West CITY 1,100 850 800 424,600 15.4%
7.3 West KIEV 820 650 550 196,200 40.2%
7.4 West KHAM 750 750 650 179,200 21.7%
8.1 North TV-NOV 1,000 750 550 609,700 26.9%
8.2 North PRM 650 600 550 289,600 6.3%
9.1 East BASM 650 - 400 401,300 21.0%
9.2 East TAG 900 750 550 248,000 13.7%
9.3 East VOLG 500 - 400 176.100 56.3%
10 Fourth Transport Ring North FTRN 500 500 400 450 464,300 27.7% 20.8%
11 South FTRS 550 500 425 685,700 20.8%
12 West FTRW 550 500 450 408,700 11.7%
13 East FTRE 550 - 425 363,400 29.6%
14 MKAD North MKADN 500 500 300 350 377,100 27.7% 26.5%
15 South MKADS 400 - 350 545,200 26.1%
16 West MKADW 500 400 350 703,800 17.1%
17 East MKADE 325 - 250 171,900 63.2%
Total 550 9,800,600 20.3%
Source: Knight Frank
Table 2
Key occupier transactions, H1 2009
Company Acquired space (sq m) Address Property Class Quarter
Lease
GazpromTsentrRemont* 8,550 27, Obrucheva St. Gas Field B+ Q2
Holding MRSK 8,087 26, Ulansky ln. Office building B+ Q2
ABBYY 7,380 2-B, Otradnaya St. Otradny BC B+ Q2
KES Holding 5,296 7 km from MKAD, Novorijskoye Hw. Riga Land B+ Q2
Alcatel-Lucent 4,560 27, Elektrozavodskaya St. Le Fort B+ Q2
Russian Telephone Company 3,300 3/1, Begovaya St. NordStar Tower A Q2
First Insurance Company* 2,900 62/13, Sharikopodshipnikovskaya St. Novoostapovskiy B+ Q1
Diageo 1,850 7/1, Gasheka St. Ducat Place II A Q1
Purchase (owner occupation)
Sberbank 55,000 12A, Yuzhnoportoviy 2nd Passage South Port B+ Q1
Inter RAO UES 30,000 27, Bolshaya Pirogovskaya St. Lootch B+ Q2
*Knight Frank acted as a consultant on the deal Source: Knight Frank
4

5. H1 2009
MOSCOW
Office market report
Figure 1 Figure 2
Average Class A rents Take-up vs Construction completions
US$ per sq m per annum sq m (000s)
1,400 1,200
Take-up Construction completions
1,200 1,000
800
1,000
600
800
400
600
200
400 0
H1 H2 H1 H2 H1 H2 H1 H2 H1 H2 H1 H1 H2 H1 H2 H1 H2 H1 H2 H1
2004 2005 2006 2007 2008 2009 2005 2006 2007 2008 2009
Vivaldi Plaza
Source: Knight Frank Source: Knight Frank
Figure 3 Figure 4 Figure 5
Class A vacancy rate Class A rents by submarket Distribution of total office stock
% US$ per sq m per annum sq m (000s)
20 1,000 3,000
800
15
2,000
600
10
400
1,000
5
200
0 0 0
H1 H2 H1 H2 H1 H2 H1 H2 H1 H2 H1 BR GR Moscow TTR* FTR MKAD BR GR Moscow- TTR* FTR MKAD
2004 2005 2006 2007 2008 2009 -City City
Source: Knight Frank Source: Knight Frank Source: Knight Frank
* Excluding Moscow-City * Excluding Moscow-City
Figure 6 Figure 7
Vacancy rates by submarket** Prime office yields
% %
30 15
25
20 12
15
10 9
5
0 6
BR GR Moscow- TTR* FTR MKAD H1 H2 H1 H2 H1 H2 H1 H2 H1
City 2005 2006 2007 2008 2009
Nagatino i-Land Source: Knight Frank Source: Knight Frank
* Excluding Moscow-City
** Based on Class A and Class B properties
5

6. RESEARCH
Americas Moscow London
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