#MARKETBEAT Full Edition Q3 2022 (ENG)

MarketBeat Q3 2022 is CMWP’s full‑scale quarterly overview that captures the turning point for Russia’s economy and commercial real estate: instead of a one‑off collapse, the country is moving into a protracted recession with structural change, while offices, retail and warehouses are only starting to reflect this in their fundamentals.

The report combines the Central Bank of Russia’s updated macro scenarios (“baseline”, “accelerated adaptation”, “global crisis”) with a detailed review of office, retail and warehouse & industrial markets. It shows how sanctions, shrinking imports, regional restrictions and a looming labour crisis are reshaping business risks and investment decisions.

On this backdrop, the report explains why negative macro scenarios have become more probable, how the balance of the economy is shifting towards stronger state involvement and manual control, and what this means for pricing, new construction and demand in each CRE segment. A separate chapter highlights Uzbekistan as an emerging business hub in Central Asia and a potential new market for Russian capital and companies.

What’s inside

Macroreview: Central Bank scenarios for GDP, inflation, key rate and household consumption through 2025; why the “global crisis” scenario looks increasingly relevant; the specific nature of this downturn where recession coincides with shrinking labour resources; growing macro and geopolitical uncertainty and its impact on business planning horizons.
Labour crisis: historic‑low unemployment combined with additional labour outflow; key operational risks for companies, from wage pressure and cost growth to potential operating failures; why motivation, team retention and building a personnel reserve become strategic priorities; possible ways to rebalance the labour market through under‑represented social groups.
State “digital plan” and market structure: a three‑sector view of the Russian economy (state, public‑private partnership, private sector); expected increase in state influence and administrative decision‑making in real estate; fragmentation of the CRE market into smaller segments with different dynamics; where long‑term state projects can create new opportunities for private players.
New markets: Uzbekistan as a case study — macro profile, construction boom, demographic trends, tax environment and income growth potential; why Tashkent is positioned as a new business centre of Central Asia and what this implies for future demand for offices, retail and logistics.
Offices (Moscow): Q1–Q3 2022 market snapshot and forecast revision after the Central Bank’s September update; vacancy growth and the first signs of negative net absorption; changing demand structure with a jump in surrenders and a lower share of new leases; expectations that net absorption may stay negative for two consecutive years for the first time in market history; why the true impact on vacancy and rents will be seen in 2023–2024 due to segment inertia; outlook for new construction in a more regulated environment; continued growth of flexible workspaces and their rising share in overall demand.
Retail (Moscow and Russia): consumer market under pressure — widening gap between 2021 and 2022 indicators, shift from spending to saving, focus on basic goods and postponement of big‑ticket purchases; partial mobilisation as an unmanageable risk factor for businesses where each employee is critical; exodus and downsizing of international brands and its effect on shopping centre vacancy; how Russian and Turkish brands are testing and occupying vacated niches; development of domestic fashion (department stores and mono‑brands), import substitution in home and lifestyle segments; slowdown and fragmentation of new retail construction with emphasis on neighbourhood centres and service‑led components in infrastructure projects; footfall dynamics in Moscow and St. Petersburg malls and the visible negative impact of mobilisation.
Warehouse & Industrial (Moscow region): why this segment remains the most resilient so far; high new construction volumes as a delayed result of record 2021 demand and BTS deals; minimal current take‑up and expected vacancy growth in 2023 driven by surrenders and rising sublease supply; rental rate correction after a rapid spike, and a growing gap between asking and effective rents; forecasts for new construction, take‑up, vacancy and rents in 2022–2023; structural transformation of demand with e‑commerce and marketplaces as key drivers, shrinking multi‑channel retail, stable production share and evolving deal types (sharp drop in very large and BTS deals, more optimisation‑driven subleases).
Key market indicators: long historical series for office, retail and warehouse markets in Moscow agglomeration and Russia (stock, new supply, rents, vacancy, take‑up), providing a broader context for current movements.

The balance of macro risks has clearly shifted towards negative scenarios, with a «global crisis» path looking increasingly plausible compared with earlier expectations.
Moscow’s office market is only at the beginning of a downturn: vacancy is rising, net absorption is turning negative, and the true impact of corporate decisions taken in 2022 will materialise in 2023–2024.
Retail is entering a phase of both supply and demand shrinkage: consumers cut back to essentials, international operators leave or scale down, while local and Turkish brands move in but cannot fully replace mass‑market giants.
Warehouses remain the relative safe haven, underpinned by e‑commerce and logistics, but even here the cycle is turning towards higher vacancy, lower effective rents and more conservative speculative development.

Practical value

For investors: a clear link between macro scenarios and CRE performance, helping to reassess risk/return expectations; understanding which segments are most exposed to the prolonged recession and labour shortages, and which (warehouses, certain PPP‑backed assets, prime offices) may retain relative resilience.
For developers and owners: guidance on how the office, retail and warehouse markets are likely to behave in 2023–2024 under increased state influence and weaker demand; implications for launching, freezing or phasing projects; expectations around vacancy, rental pressure and the shift towards administrative rather than purely market‑driven decisions in new construction.
For occupiers: context for strategy decisions on footprint and locations — from office space optimisation and renegotiations to rethinking brick‑and‑mortar presence in retail and logistics networks in light of changing consumer patterns and e‑commerce growth.
For retailers and logistics operators: a grounded view of consumer market contraction, brand rotation and the evolving balance between offline and online; how this feeds into demand for shopping centre space and modern warehouses; where parallel and grey imports, local production and new distribution models may create fresh location needs.
For policy‑makers and advisors: evidence of how labour shortages, regional restrictions and rising state influence are already reshaping CRE, useful for calibrating support measures, regulatory steps and regional development strategies.

To dive into the full set of charts, scenarios, segment‑by‑segment forecasts and expert commentary, download the complete MarketBeat Q3 2022 report.