Moscow Commercial Real Estate Market Pricing

The framework of this study proposes an econometric model used to identify the impact of pricing determinants of rental rates in Moscow for the two main types of commercial real estate – retail and offices. The papers illustrates that the nature of regressor’s influence on rental rates is similar for both types of real estate with the only difference in the magnitude of this influence. The study identifies the problem of obtaining correct estimates of linear models when using the standard OLS-method due to a large number of outliers in a gathered sample. Due to this problem, there was a robust MM estimation method applied to account for these outliers. The results of this research might be a good platform for adapting the business plan both from the perspective of the landlord and tenant. In case an agent is planning to engage in a rental business, to acquire ownership of several commercial premises for further lease, understanding the results of this research paper would be very helpful in determining the list of those characteristics of real estate object that could sufficiently improve the commercial terms of the planned leasing deal. In the same time, this study can be very useful in choosing the optimal ratio between a set of parameters and characteristics of a certain type of real estate premises and its rental rate.