Elena Stryukova: ‘Most of the new tenants in shopping centres of Kazan are Russian companies’
Kazan retail, office and warehouse real estate market overview for the first quarter of the year
Since the beginning of negotiations between the United States and Russia on the settlement of the conflict in Ukraine, the topic of the return of foreign companies to the domestic market has been actively discussed. In particular, American companies want to return to Russia and occupy a niche in Europe, Kirill Dmitriev, the head of the Russian Direct Investment Fund, recently said. But so far, no direct appeals have been received from tenants who left earlier, said Elena Stryukova, managing partner of Perfect RED and representative of the Russian Russian Guild of Managers and Developers in Tatarstan. Why their return may be complicated, how much rent has risen in price, and how the Kazan commercial real estate market as a whole has experienced the first quarter of the year, the expert tells in the author's column for Realnoe Vremya.
Commercial real estate
The process of replacing brands that have left the Russian market in shopping centres is almost complete. According to the results of the first quarter of 2025, the vacancy rate was only 6%. Most of the new tenants are Russian companies.
Due to the low proportion of vacant space in shopping centres, the pace of new store openings is also decreasing: 16 stores opened in the first quarter of 2025. For comparison, there were 24 of them in the fourth quarter of 2024.
Warehouse real estate
There is a slight decrease in demand for warehouses in the first quarter of 2025. The main constraining factors for concluding deals were the growth of rental rates and the unpredictable dynamics of consumer activity. As a result, a significant part of the tenants have taken a wait-and-see attitude, optimising their resources and used areas.
No new facilities were commissioned in the first quarter. By the end of this year, the forecast for the commissioning of class A warehouses in Kazan and the agglomeration is 204,000 square metres.
The vacancy rate at the end of the first quarter of 2025 was 3.4%. For the first time in three years, rental units of up to 7,800 square metres have appeared. In general, during the year we will observe fluctuations in the vacancy rate due to the completion of the construction of speculative warehouses entering the market, the rotation of tenants, as well as the appearance of sublease offers.
Trends and forecasts
- Following a record increase in rental rates and sale prices of warehouse real estate in Kazan, they are expected to slow down. The peak in rates will pass, and further growth will be associated with the launch of new facilities on the market.
- An increase in the average rental rate has led to a decrease in tenant activity.
- The rising cost of construction and the decrease in tenant activity are forcing developers to reconsider their policy regarding the construction of new projects or queues.
- A slight increase in the vacancy rate in the market is expected due to the rotation of tenants between existing warehouse complexes and projects that are ready for commissioning during the year.
- The potential volume of warehouse lease transactions in Kazan and the agglomeration by the end of 2025 will amount to at least 160,000 square metres.
- Companies from the e-commerce, grocery retail and logistics segments will remain the main source of demand for warehouse space. They remain the main drivers of the market, generating 75-85% of transactions on the market.
Office real estate
Office real estate in Kazan has a structure typical of most cities with a population of over a million people. It is represented by a variety of objects: from buildings built in the 2000s to reconstructed facilities and modern structures.
The total volume of high-quality business centers of classes “A”, “B +" and “B” exceeds 576,000 square meters and includes 62 facilities with a total area of more than 3,000 square meters. Class A business centers account for 26% of the total volume of high-quality office real estate, class B+ business centers occupy 15%, and class B — 59%. This diversity indicates the needs of businesses in various office space formats.
At the end of the first quarter of 2025, the vacancy rate in office real estate reached 4%, which is 3 percentage points higher compared to the same period in 2024. The main reasons for the increase in the share of vacant premises are the entry of new facilities into the market, tenant rotation and an increase in rental rates (in some cases, which led to tenants moving to more budget facilities).
News, trends and forecasts
- New construction in the office real estate segment in Kazan is underway in the segment of small facilities — business centers and office buildings with an area of 1,500 to 5,000 square meters are being built.
- In conditions of a shortage of vacant sites with a suitable purpose in the city center and potential for growth, high-quality office buildings can offer facilities suitable for redevelopment. The renovation of historic buildings in the central part of the city and the redevelopment of former industrial areas have the potential to meet the existing demand for high-quality offices.
- There is an interest in offices with finished finishes and furniture, in particular for the placement of back offices of large companies. A striking example of this trend is the leasing of SOK and Workki co-working spaces, which were leased to one tenant entirely. This approach allows companies to significantly reduce the time needed to set up and get to work faster.
Максим Платонов / realnoevremya.ru
- Taking into account the annual indexation of rental rates, which currently stands at 10-15%, as well as the construction of a new class A business center A5 Prenium on Pravo-Bulachnaya Street, an increase in average rental rates is expected in the business center segment.
- At the end of 2024, the Takhles Class B business center changed its owner. The new owner decided to revise the rates upward, which led to the release of a significant part of the office space.
*Rental rate is indicated here and below, including VAT and OpEx
Tatarstan