Russian Investments in Overseas Property

Moscow, Russian Federation, June 4, 2015 (Newswire.com) - ​Tranio, an international real estate broker, has published its fourth analytical study: Russian Investments in Overseas Property - 2014. Its findings show that average Russian investors are cautious buyers who expect high returns. They take their time before making a decision and entering into a transaction, choosing small hotels or apartment houses in Europe worth up to €1.5M.

Where: Germany, Latvia, Czech Republic

Russians often buy overseas property for vacations rather than investment purposes. According to 50% of realtors interviewed, few of these clients go for commercial facilities. However, nearly one third of these respondents (31.7%) believe that the presence of Russian investors on the market is noticeable. Germany, Latvia and the Czech Republic are the most sought after areas for these buyers. Cyprus, Portugal and France are the least attractive investment destinations.

What: hotels and apartment buildings

Hotels and apartment buildings are the most popular commercial facilities for Russian investors. At 61.5% and 34.2% respectively, respondents highlighted these categories as priority investments. Hotels lead the way in 21 of the 34 countries, particularly in Greece, Italy, France, the Czech Republic and Portugal. Street retail was ranked third in the survey, while "industrial facilities" were the least popular, selected by no respondents in almost all countries.

More than half of the respondents (52.3%) noted that clients investing in commercial real estate preferred ready-made businesses to establishing a company themselves. This option took the lead in most countries (26 of 31), and was particularly prominent in the Czech Republic, Latvia, Spain and Greece. In contrast, investors in Montenegro preferred to establish their own business, according to 55.6% of the survey participants. In Cyprus, both options were popular among investors, earning 50% respectively.

How much: from €500,000 to €1.5M

The most popular price range for buying investment property ranges from €500,000 to €1.5M. 39.8% of respondents noted that Russian-speaking clients prefer to buy commercial property priced up to €500,000, while almost the same amount (38.1%) chose the higher price segment, from €500,000 to €1.5M. This is true of most countries, particularly Bulgaria, Thailand and Turkey, while the “expensive” segment (over €10M) is exclusively found in the UK.

Return: up to 10%

Realtors around the world underline one typical feature shared by most Russian-speaking investors: they expect to buy quality investment property at prices that are well below the market average, and at the same time they want to derive a profit that is far higher than the overall market situation. Almost half of respondents (44.8%) said that investors expect a moderate profit from residential property, up to 5–6% per annum. This is typical for the UK and the Czech Republic.

On average, expected returns on commercial property are higher than those on residential property: 43.3% of respondents stated that buyers usually expect up to 10% per annum. The lowest expected returns on commercial facilities were in the Czech Republic and the UK. In contrast, in Italy, Russian investors expected “over 10%” according to 42.9% of survey participants.

About the study

Tranio interviewed more than 400 real estate agents in 39 countries for this study which has been published annually since 2011. We also provide news and analytical reports on the international real estate market, complete with expert opinions on the hot topics of the moment. We also participate in property shows, conferences and other events. Our leaders, expert sales team, analysts and editorial office are always available for comments on the global property market. Our studies may be republished with a reference to Tranio.

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About us

Tranio is an international real estate broker with a large property catalogue. We help our clients to buy and lease property directly from the best foreign agencies and developers without any additional mark-ups or unnecessary intermediaries. We provide support and advice at all stages of selecting and buying a property.