New Market Report Now Available: Russia Real Estate Report Q2 2010

New Business research report from Business Monitor International is now available from Fast Market Research
 
March 31, 2010 - PRLog -- We expect the recession in Russia to trough in Q209-Q309, with base effects moderating the pace of contraction beginning in the fourth quarter. That said, we hold to the view for a weak recovery, with private consumption likely to remain weak until the latter half of 2010. While we forecast real GDP to fall by 8.1% in 2009 and then grow by only 3.4% in 2010, we note that a sustained rally in oil prices above US$70.00/bbl in H209 would pose upside risks to our core scenario. Russia's business environment is hampered by poor infrastructure, rising state protectionism in the energy industry and weak institutional development, which has contributed to an endemic corruption problem and limited impartial judicial oversight. There are signals that the government is taking some of these issues seriously, but we do not expect any major changes to occur within the short term. The size of the country and the limited capacity of government institutions mean that any policy initiatives will take years to have any meaningful effect. The Central Bank of Russia (CBR) cut its benchmark refinancing rate to 9.50% on October 29, bringing cumulative monetary easing since April to 350bps. The rate cuts have coincided with a steep drop in inflationary pressures, with headline consumer price growth falling to 9.7% y-o-y in October, down from a recent peak of 14.0% in March. We maintain, though, that the CBR's decision-making is as much influenced by contracting domestic demand and bank lending as it is by adjusting to lower inflation. By cutting the policy rate, the authorities are likely trying to bring down lending rates, which remain well into the double digits in nominal terms. Going forward, we believe there remains scope for further interest rate cuts in the near term, with our end-2009 refinancing rate forecast set at 8.50%. Office, retail and industrial premises continue to be beset by high vacancy rates and low rents. We judge that current rent rates are not sustainable, and therefore developments will not be commenced until demand rises and vacancy rates fall. House prices, office rents and retail rents will probably continue to fall, albeit at a slower level than in H109. The industrial property segment is expected to stabilise in early 2010. The investment market is expected to continue a mild upswing in investments in office, retail and warehouse projects. Distressed deals will increasingly be renegotiated.

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About Business Monitor International

Business Monitor International (BMI) offers a comprehensive range of products and services designed to help senior executives, analysts and researchers assess and better manage operating risks, and exploit business opportunities, across 175 markets.  BMI offers three main areas of expertise: Country Risk BMI's country risk and macroeconomic forecast portfolio includes weekly financial market reports, monthly regional Monitors, and in-depth quarterly Business Forecast Reports.  Industry Analysis BMI covers a total of 17 industry verticals through a portfolio of services, including in-depth quarterly Country Forecast Reports.  View more research from Business Monitor International at http://www.fastmr.com/catalog/publishers.aspx?pubid=1010

About Fast Market Research

Fast Market Research is an online aggregator and distributor of market research and business information. We represent the world's top research publishers and analysts and provide quick and easy access to the best competitive intelligence available.

For more information about these or related research reports, please visit our website at http://www.fastmr.com or call us at 1.800.844.8156.
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