Analysis and forecast of the Rostov-on-Don commercial real estate market in 2025

High Stakes vs. A Real Asset

The situation on the Russian financial market in mid-2025 is characterized by extremely high deposit rates, which creates a unique context for evaluating investments in commercial real estate in Rostov-on-Don. Let's analyze the current state of the CN market and make an up-to-date comparison of profitability. The current situation on the commercial real estate market in Rostov-on-Don (June 2025):

The main trends remain, and there is a steady demand for: modern street-retail warehouses flex-offices

Rental rates by segment remain in the ranges:

modern warehouses 600 - 800₽ / sq.m . high-quality street-retail 1500 - 2500₽ / sq.m. flex-offices 1000 - 1800₽ / square meter The commercial rental market reacts to inflation and supply/demand rather than the key rate directly. The indexation of leases in existing contracts occurs according to their terms. As a rule, this is 5-10% annually. The net profitability of the rental business is estimated at 7.5% -13% per annum. There was no sharp jump in profitability.

Bank Deposits in June 2025:

Actual bids: 19-22% per annum – such rates are actively advertised by a number of banks for individuals

Important nuances of proposals 19-22%:

Short–term: These are often bids for a period of 3-6 months, less often for 1 year. At the end of the period, the rate drops sharply (to 10-16% or lower) Amount limits: The maximum amount of a high-interest deposit is usually limited Conditions: They may require the opening of a salary card, bonus status, a ban on withdrawal/ replenishment Taxation: Individual personal income tax - 13%, over 2.4 million₽ - 15% The key rate of the Central Bank of the Russian Federation on 06/09/2025 is 20% Non-taxable limit: 1,000,000 rubles * 20% = 200,000 rubles.`annual income on all ruble deposits of an individual in one bank. Personal income tax (13%): All income on deposits received in excess of 200,000 rubles per year in one bank is subject to personal income tax at a rate of 13%. Example #1: First-tier bank, rate 19.5% term 91 days (banking year 365) Contribution of 100,000,000 rubles at 19.5% = 4,861,643 rubles of income. Taxable base: 4 861 643 - 200 000 = 4 661 643 rub . Personal income tax: 4 661 643 * 15% = 699 246 rub . Net income: 4 861 643 - 699 246 = 4 162 397 rub . Effective rate: 16.6%.

Inflation: The Central Bank's forecast for 2025 is about 4%, but the fact may be higher. Real deposit return (after taxes and inflation): 104 162 397 - 1% = 103 120 773 rub . Effective rate 12.5%

Example #2: First-tier bank, 16.7% rate, 370 days term (365 banking year) Contribution of 100,000,000 rubles at 16.7% = 16,928,767 rubles of income. Taxable base: 16 928 767 - 200 000 = 16 728 767 rub . Personal income tax: 16 728 767 * 15% = 2 509 315 rub . Net income: 16 928 767 - 2 509 315 = 14 419 452 rub . Effective bid: 14.4%.

Inflation: The Central Bank's forecast for 2025 is about 4%, but the fact may be higher. Real deposit return (after taxes and inflation): 114 419 452 - 4% = 109 842 674 rub . Effective rate 9.8% Important: This is the yield only for the duration of the high rate (3-12 months). If extended on new (probably lower) terms, real returns over a longer period will decrease. Yield Comparison: KN Rostov vs Deposit of 19-22% (June 2025)

Key conclusions for the Investor in 2025: Short-term window of opportunity for deposits: Rates of 19-22% are an exceptional situation caused by banks' urgent need for liquidity against the background of a high key interest rate. This is a temporary offer with restrictions. Taxes eat up the advantage: After paying personal income tax (especially for amounts > 1 million rubles) and taking into account inflation, the real return on the deposit (~ 10-13%) is still higher than the nominal return on KN (7.5-13%), but the difference is not as huge as it seems at first glance. However, this is only a short-term return. The fundamental advantages of commercial real estate remain crucial: Inflation protection: The rent is indexed, the value of the asset increases. The deposit does not give this Capital growth: KN is a real asset with the potential to increase value. Money on deposit only loses its purchasing power in the long term Cash flow stability: Long-term lease agreements (3-5+ years) they provide a predictable income. A deposit of 20-22% is a one–time short-term operation Unlimited amount potential: Large amounts can be invested in KN without loss of profitability (unlike a deposit with a limited amount at a high%) Diversification: KN weakly correlates with financial markets. The risks are different, but significant: The deposit carries the risk of a rate cut and (partially) bankruptcy of the bank. KN carries operational risks (downtime, repairs), but the asset remains owned.

A strategy for an Investor in terms of 19-22% on deposits: Use the "deposit window" for part of the capital: Place limited amounts (up to 1-1.5 million rubles, including VAT and taxes) for a short period of time at a high interest rate. This will give you a quick guaranteed income here and now. Invest the bulk in KN for long-term purposes: Direct large amounts and capital, calculated for a horizon of 5+ years, into high-quality commercial real estate in Rostov-on-Don.

This will ensure:

Stable and growing income (rent indexation). Capital protection from inflation. The potential for a significant increase in the value of the asset. Portfolio diversification.

Focus on the quality of books: In conditions of high alternative returns on risk-free (in short-term) instruments, it is critically important to choose CN facilities with maximum reliability.:

- Location: Only the best areas (logistics hubs for warehouses, center / pedestrian streets for retail / top residential complexes) - Quality of the facility: Modern standards, energy efficiency, minimum investment requirements. - Reliable tenant: Network operators, stable businesses, long-term contract - Manageable risk of downtime: Reserve for the period of searching for a new tenant.

Conclusion: The extremely high deposit rates in June 2025 are a short–term anomaly that is attractive for placing some liquid funds. However, Rostov-on-Don's commercial real estate, especially high-quality assets in top segments (warehouses, street retail, offices), remains a strategically important and competitive asset for maintaining and long-term capital growth, protecting against inflation and generating stable, growing income. A sound investment strategy in 2025 involves a combination of using high deposit rates for tactical purposes and investing in KN for strategic growth. I will answer all your questions or select an object. Anatoly Krutko +7 (918) 554-50-60