Vacancy rate amounted to 11.4% in Q1 2021. We expect the indicator to grow due to moderate demand and to rich the level of 12-12.5% by the end of the year. Absorption will remain positive in 2021 due to the delivery of large built-to-suit schemes. Take-up will be at the level of the previous year in 2021. However, the structure of demand will transform. New construction will exceed the result of the previous year due to the delivery of several built-to-suit properties. The indicator will decline in 2022. The market will still face the lack of large high-quality office blocks on the speculative market.
2020 was challenging for the consumer market and retail market in general. But there were no tough restrictions for retail sector during the second wave of the pandemic. This allowed shopping centers to maintain relatively stable vacancy level in Moscow. The footfall in the shopping centers remains behind the last year by 20-30%. However, operators register higher conversion rate. We expect that the retail market recovery will start in the mid-2021. Footfall and vacancy rate indicators will return to the pre-crisis level no earlier than by the end of 2021.
In 2020 take-up reached 2.37 mn sq. m. We expect stabilization of the market after a demand peak. In 2021 new construction will exceed 2020 indicator by 28% due to high investment activity, demand for ready to move in premises and new warehouse formats. Real growth of rental rates in Russia is in line with the European average.
Get the full Russia property market picture with all the market data by downloading the reports.