(Bloomberg) -- Billionaire Roman Abramovich’s White Gardens office complex in Moscow stands about two-thirds empty as a supply glut and the sinking Russian economy make it difficult for landlords to find new tenants.
The Russian owner of London’s Chelsea Football Club bought the business center near the central Tverskaya Street in November 2013. Since then, he’s secured new leases accounting for less than 10 percent of the property’s 63,000 square meters (678,000 square feet) of space, according to his spokesman, John Mann. About a third of the property, opened in 2013, is occupied, he said.
“We are taking a long-term view by making sure we have a good client base and by not diminishing its value,” Mann said by phone. “We have a class-A, top-notch asset.”
Office demand in Moscow slumped at the end of last year as a drop in oil prices, a tumbling ruble and economic sanctions leveled against Russia discouraged companies from expanding in the city. The average vacancy rate for the highest-quality office space in the city climbed to 29 percent at the end of 2014 from 18 percent a year earlier as new properties added to supply, Jones Lang LaSalle Inc. said in a report.
Abramovich acquired White Gardens from VTB Capital, TPG Capital LLP and the sovereign-wealth fund China Investment Corporation. The complex, which consists of two buildings connected by an open-air arcade with terraces and rooftop gardens, has won design and environmental awards.
Bleak Outlook
Almost half of the retail space in the atrium remains closed. The Cheapside Josper Bistro, named after a street in the City of London financial district, was the busiest place at lunchtime on a Friday this month, with about half of the tables occupied by office workers enjoying burgers and beers. The adjoining Box....