On March 27, at the office of Cushman & Wakefield, a press breakfast «Week with the new president was held. How will the new government's 6-year economic course affect the development of the commercial real estate market in 2018-2024?.

The increased participation of the state in economic activity will lead to the fact that in 6 years the real estate market will be significantly different from today.

First of all, we are talking about the so-called project approach, when the feasibility of building an object is determined not by its economic model, sustainability and profitability, but by its role in a larger large-scale project or state program. The main bottleneck will be access to credit resources, and it is participation in a state project that will open access to these resources for development companies. Commercial development will be episodic, occupying niche positions in the markets.

Experts Cushman & Wakefield believe that the next 6 years will pass for the real estate market in an upward cycle. But this does not mean that we will see a speculative growth of the market. This means that there will be a slow correction of rental rates and indicators. In real terms, by 2024, rental rates may increase by 15-20% compared to today's level. At the same time, aging and moral deterioration of objects built relatively recently will become a problem. The new offer will be formed to a lesser extent due to new construction and to a greater extent due to the reconstruction and rehabilitation of projects built in the early phase of the commercial market in the nineties.

In general, there will be a confrontation of two trends in the market:On the one hand, the market will become more and more complex due to the introduction of new technologies, on the other hand, there will be an organizational simplification of the market when fewer factors are taken into account when making a decision.

The main fundamental trends that will affect the real estate market in the next 6 years:

1. Increasing the tax burden. Most likely, the government will not limit itself to two percentage points of personal income tax growth. This means that the requirements for profitability and marginality of the business will increase. The survival of low-margin businesses and industries will be in question.
2. Strengthening control and regulation. The growing bureaucratic apparatus will strive for more and more detailed and penetrating control over business. This means, on the one hand, a higher demand for jobs in the bureaucracy, and on the other hand, a greater need for people in corporations responsible for interacting with the regulator. In general, this will create additional jobs that do not increase the size of the economy. That is why income redistribution and tax increases will be required.
3. Reliance on production. Today we are no longer talking about import substitution for individual goods and services, but about the self-sufficiency of the Russian economy. The project nature of the management will mean that mainly those projects that fit into the state concept will receive a green street and access to financing.
4. Digital economy. The consumer market will continue to be dominated by Western digital platforms and tools, or Russian analogues adapted for our market. However, in the next six years, unique Russian digital management tools will be actively developed. This will not be an analogue of digital government, as in a number of European countries, rather, it will be an instrument of state intervention in economic management.
5. Lending. The rapid growth of lending has led to the fact that today household loans are no longer the work of the most advanced segments of the population, who use additional tools to improve the quality of life, but a way of existence for a large part of the Russian population. Lending will become a social factor. The first signs of a new paradigm are government subsidization of mortgage interest rates for large families. This means that the state considers lending as a tool of social engineering. Most likely, in the future, access to preferential loans will be considered by the employer-state as an additional tool for attracting labor.
6. Reducing the role of the Cabinet of Ministers. The Cabinet of Ministers will consist of a large number of participants with different levels of authority. There may be an increase in the number of deputy prime ministers and a shift of power from ministers to sectoral deputy prime ministers.
7. The influence of the vector of development of the city. Urban development will be a very important factor for the next six years. We see how the capital has transformed over the past five years. The social and economic consequences of these reforms will only begin to manifest themselves in the coming years. Already today we can state the death of the central business district: we see not the decentralization of offices, but an increase in the city center. If today the city center is actually located within the Third Transport Ring, then in 6 years, most likely, the city center will be the territory within the second metro ring. By reforming the urban space, the state encourages people to devote more time to entertainment, walking and domestic tourism. This concept is quite consistent with the low growth rates of the economy expected in the coming years.