L apart moscow

Research by GC Coldy: aparthotels captured Moscow

Analytics 16 May 2019

In five years, sales of aparthotel units in Moscow increased 23-fold.
In 2013, 322 purchase and sale transactions of aparthotel units were recorded in Moscow. In 2018, the number of transactions increased 22.8-fold, i.e. by 7,351 transactions. The sales grew due to the expansion of the sales area, among other factors.
Over the past five years, the geography of aparthotel units sales and purchases has expanded from 6 to 10 administrative districts of Moscow, as the company Coldy’s analysts demonstrated in their study of the commercial real estate market in Moscow.
Just two of the Moscow districts still do not offer any aparthotel units. From 2013 to 2018, not a single aparthotel unit was bought or sold in Zelenograd and Troitsk administrative districts.
Western, Northern, North-Eastern, Central, Southern and New Moscow administrative districts represent the most “mature” markets in this real estate sector. They featured sales of aparthotel units as early as in 2013; by 2018, there was a significant increase of such sales in all these districts. For example, in the Central Administrative district, aparthotel units sales increased 135-fold over five years.
North-Eastern and Southern administrative districts sold the least number of aparthotel units of all in 2013: only two and four transactions, respectively. The largest number of transactions in 2013 was concluded in the Northern District, where 128 aparthotel units were sold. In 2014, sales of aparthotel units started in the South-Western district. North-Western and South-Eastern Districts joined the aparthotel unit sales in 2016, and the Eastern Administrative District, in 2017.

Geography of aparthotel units sales, by year
Number of aparthotel units sold
Geography of aparthotel units sales, by district

In 2018, the North-Eastern District of Moscow was the absolute leader in the number of aparthotel units sales, with 2,386 transactions. Central and Northern administrative districts ranged second and third, with 1358 and 1058 aparthotel unit sales, respectively.
Least of all the aparthotel unit sales in 2018 were recorded in the South-Eastern District, with the total of 78 transactions. The sales in New Moscow and Eastern administrative districts were slightly more active, with 161 and 192 transactions.
The most significant sales growth was reached in the North-Eastern Administrative District and Central Administrative District, which are the leaders of sales. Having started in 2013 with just two sales, NEAD reached 2,386 aparthotel unit sales in 2018. In the Central Administrative District, the sales increased from 10 transactions in 2013 to 1358 transactions in 2018.
Number of apartment sales, 2018

The aparthotel units market of the Southern District lost the record number of 865 sales (their number decreased from 1476 to 611). The apartment market of WAD decreased by 652 transactions (from 1262 to 610 transactions). The NAD market declined by 451 transactions (from 1509 in 2016 to 1058 in 2018).
The market of New Moscow district declined slightly less, losing 199 transactions compared tothe peak of 360 sales recorded in 2014. The smallest market of aparthotel units that was recorded in the South-Eastern Administrative District lost still less, declining by 30 sales compared to 108 transactions recorded in 2017. 
Elena Oreshkina, Coldy’s Head of Sales pointed out: “Real estate in Moscow is still a popular asset for Russians and expats, as well as a way to improve the quality of life for Muscovites and their compatriots living in other regions of Russia. Just five years ago, aparthotel units were considered as inferior quality real estate, which automatically meant a 10 or 20% discount from the price of comparable apartments with similar locations. At present, however, this segment has become a real market driver. The fact that the sales of aparthotel units in Moscow have increased 23-fold since 2013 and this format “won over” four new districts indicates the transition from the “individual” offers to the emergence of complex differentiated products with unique features”.