Yekaterinburg's office market collapses as service businesses take over
Commercial property in Yekaterinburg is facing a sharp downturn as demand for office space collapses. Despite rising prices and asking rents, landlords are struggling with stagnant income due to higher maintenance costs. The shift comes as the city's real estate market undergoes major changes in how space is used.
Over the past five years, commercial property prices in Yekaterinburg have climbed by 2.4 times. Rental rates also increased by 50–60%, yet landlords have seen little real gain. Soaring maintenance expenses have offset higher asking prices, leaving net rental income largely unchanged.
Demand for traditional office space has fallen dramatically. Four years ago, businesses were leasing far more, but today, take-up has dropped nearly sevenfold. Net absorption—a measure of occupied space—plummeted from 155,000 square metres in 2019–2021 to just 23,000 square metres in 2022–2025. By early 2022, the figure had even turned negative, at -25,000 square metres. One notable change is the rapid growth of consumer service businesses in commercial buildings. Since 2015, their share of occupied space has tripled. While broader economic pressures—such as inflation, slowed growth, and fiscal deficits—have hit Russia's economy, no direct link has been established between these factors and the shift toward service-oriented tenants in Yekaterinburg.
The city's commercial real estate market now reflects a clear trend: fewer offices and more service-based businesses. With demand for traditional workspaces at a low and costs rising, landlords face an uncertain outlook. The shift in tenant mix suggests a long-term change in how commercial property is used in the region.
