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What drives the Russian office furniture market?

Changes in office space mainly in Moscow and St. Petersburg are due to the influence of a number of factors. The development of flexible office spaces, the expansion of public areas (meeting rooms and receptions) and the development of reactions (game and lounge areas) in office spaces are the main factors in the demand for office equipment.  

The growing demand for coworking spaces creates new opportunities for suppliers of office furniture and solutions. It should be noted that premium level coworking projects appear in the market of Moscow and St.Petersburg, and here the equipment requirements are significantly different from ones in comfort class. According to analysts, the number of people that use coworking spaces is growing annually by 30-40%. In Moscow, at least 200 coworkings are currently in the market. 

The demand for new office spaces and, as a result, the demand for new office furniture in 2018 was formed not only by changing the location of a number of companies to optimize rental costs, but also by the need to increase the office space and improve its quality. Persistent in the office real estate market favorable for customers purchase and rental conditions, as well as the presence of a significant volume of offers of high-quality premises became the reasons for reducing the density of seating in new offices. 

Moscow reserves leadership in business development in Russia. According to forecasts for 2019, in Moscow, total input volume of office space will be approximately 430-450,000 sqm, while the volume of transactions for sale and lease of office spaces will approximately remain at the level of the previous year. In the coming years, a number of business centers in Moscow are waiting for redevelopment, and as a result of this process, the demand for new office furniture in the future will be.  Also in 2018, there was an increase in the demand for rental offices of class B, B- and C. The reason for the trend is the activity of small and medium-sized businesses that have adapted to new economic conditions: many companies have adjusted their development plans to less ambitious and chose new office spaces in this market segment. 
According to experts, in Russia, the annual capacity of the office furniture market is about 45 billion rubles, and more than half are in Moscow and St.Petersburg. In this case, the predominant share is occupied by relatively inexpensive office furniture, since companies are not ready to lay out large sums for luxury interior design. The demand for office furniture depends entirely on the general state of the economy and, consequently, the level of employment, business development, expansion, and general activities or the specific needs of the company for renovation or replacement of office furniture. However, foreign manufacturers of unique furniture solutions can find a place in the market and equip offices to taste their owners. 

Despite the current economic situation, the demand for office furniture in Moscow and St. Petersburg remains high, and the average annual market growth rate is around 5%, which is comparable with data on the global office furniture market.   

News
The OECD predicts acceleration in the global economy and a slowdown in the domestic Russian economy. The decline in household incomes and the contraction of consumer demand may become an additional brake on the recovery of the Russian economy.
According to Rosstat, the economic downturn in Russia in 2020 amounted to 3.1% – significantly better than expected.
The Deputy Chairman of the Bank of Russia Alexey Zabotkin emphasized that the potential economic growth rates do not depend on monetary policy, they are influenced by demography, labor force, and the efficiency of institutions.
The Russian economy continues to lose its attractiveness in the eyes of large transnational businesses as consumers become poorer and the government continues the sanctions war with the West.

The Washington Institute of International Finance (IIF) sharply improved its forecast for the Russian economy. Its experts revised estimates of the fall in GDP in 2020 from minus 4.8% to 3.6%.

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