Which factors can make the commercial real estate market attractive to investors?
1. Yields from ownership of commercial real estate are based on long-term contracts. On letting a property, an investor aims to protect himself from sharp fluctuations in business activity. A substantial portion of revenue from real estate comes from amortization of the property. If a building stands empty and does not bring in revenue, the investor makes a substantial loss. Therefore, in developed countries, the contract leasing period can be 10 or even 15 years. In Moscow, according to Stiles&Riabokobylko figures, the most common leasing period is 3 to 5 years. Moreover, advance payment of 1-3 months is almost always offered, with a deposit. Investment in commercial real estate can be compared with investment in bonds on the basis of stability of revenue over a long time period. Where the stability of coupon payments on bonds is almost entirely independent of the investor, depending only on the financial standing of the issuer, the current yield from rent directly depends on the acti
