Overseas property
Tranio Research

Russian and CIS Overseas Commercial Property Buyer Report (2018)

In early 2018, Tranio conducted its annual survey on Russian-speaking foreign property investors, which involved 476 property market agents from 33 countries.

The survey involved both Russian-speaking realtors working abroad and Tranio’s non-Russian-speaking partners (19% of the respondents). Notably, Russian-speaking and non-Russian-speaking realtors had substantially different answers to many questions. This may mean that both groups of realtors have different working practices and cater to different segments of the Russian-speaking investor audience.

The study reveals significant differences between Russian-speaking realtors and non-Russian-speaking ones.

The number of investors is growing

45% of the survey respondents believe the number of Russian-speaking foreign property investors has been growing in recent years. This matches the results of Tranio’s previous surveys – 17% of the respondents denoted that immigrants from Russia and countries of the former Soviet Union were among the main categories of buyers in 2015, while the figure was 27% in 2016.

However, the most recent survey shows that growth in property investors are observed mainly by non-Russian-speaking realtors, while this trend is not so clear among the clientele of Russian-speaking realtors.

“There are more shrewd professionals among local agents, who able to offer more attractive properties and terms. On the other hand, Russian investors have become more experienced themselves – they often speak English and can easily contact agents who speak other languages”, Tranio managing partner George Kachmazov said.

The number of Russian-speaking foreign property investors is growing, but they are mainly clients of non-Russian-speaking realtors.

The respondents from the Czech Republic, Cyprus, Greece and Germany denoted a marked increase in the number of investors. “Russian-speaking buyers have always been interested in these countries, but in recent years, their markets have been growing and in many of these countries, mortgages have become more beneficial than they were several years ago. The popularity of Greece and Cyprus is being fuelled by their attractive residence and citizenship-for-investment programmes respectively”, Tranio analyst Yulia Kozhevnikova said.

Among countries with a growing investor audience are Portugal, Austria, Spain and Thailand. However, these countries are receiving growing interest not only among Russian-speaking investors but also investors from elsewhere, including China and the Middle East.

A marked increase in the number of investors was observed in the Czech Republic, Germany, Greece and Cyprus, while a decrease is reported in Bulgaria, Hungary, Italy, Latvia and France.

In contrast, the respondents from Bulgaria, Hungary, Italy, Latvia and France denoted a decline in investor interest. Latvia, which was one of the most popular countries among Russian-speaking property buyers, lost its popularity when the minimum investment for a "golden visa" was raised from €140,000 to €250,000 and the attitude of the country’s authorities towards Russian investors became increasingly negative.

Investors are interested in rental apartment buildings and small hotels

Previous Tranio surveys demonstrated that the vast majority of Russian-speaking investors abroad were buying residential apartments and houses for rent, as indicated by 60–80% of the respondents. In the 2018 survey, Tranio focused on other types of investment properties, the most popular of which turned to be small hotels (up to 80 rooms) and rental apartment buildings, which were mentioned by 33% and 31% of the respondents respectively.

There are significant differences between the answers of Russian-speaking realtors and non-Russian-speaking realtors regarding certain types of property. For example, 65% of non-Russian-speaking realtors believe that rental apartment buildings are the most popular type of commercial property among Russian-speaking investors – far ahead of other property types (small hotels were mentioned by only 31% of them). At the same time, 33% of Russian-speaking realtors chose small hotels and 27% of them chose rental apartment buildings. The cafes and restaurants category was not mentioned by any non-Russian speaking realtor but was chosen by every fifth Russian-speaking one. Supermarkets and street shops were mentioned by 13% and 9% of Russian-speaking realtors respectively, but were mentioned by only 4% of non-Russian-speaking realtors in each instance.

The most popular types of investment property apart from rental residential apartments and detached houses are small hotels (ranked first among Russian-speaking respondents) and rental apartment buildings (ranked first among non-Russian-speaking realtors).

The countries can be divided into several groups depending on the types of investment property prevailing in the answers of the respondents from these countries:

Rental apartment buildings 

and small hotels

United Kingdom, Hungary, Greece, 

Cyprus, Portugal, Croatia

Small hotels

Italy, Montenegro

Cafes, restaurants

Spain, United States, Thailand, Turkey

Supermarkets (prevailing) 

and rental apartment buildings

Austria, Germany


Slovenia, Czech Republic

Street retail


Russian-speaking investors buy more expensive property from foreign realtors than from Russian-speaking ones

Clients of non-Russian-speaking realtors have higher budgets than clients of Russian-speaking realtors. In the residential property segment, the price category between €300,000 and €1 million was the most frequently chosen among non-Russian-speaking respondents (65%), while it was only selected by less than one-third of Russian-speaking respondents (32%). The two lower price categories account for roughly the same share among Russian-speaking respondents. The highest of the price categories considered — between €1 million and €3 million — was the least popular on both sides, despite non-Russian-speaking respondents selecting this category three times as much (19%) as Russian-speaking ones.

In the commercial property segment, where price categories under €10 million were considered, a correlation could clearly be seen: the higher the price range, the less often it was mentioned by Russian-speaking respondents and the more often it was mentioned by the non-Russian-speaking ones. The higher the price range, the less often it was mentioned by Russian-speaking respondents and the more often it was chosen by non-Russian-speaking ones. “This can be attributed to the fact that non-Russian-speaking realtors often can access more expensive properties more directly”, Mr Kachmazov said.

Russian-speaking realtors mostly sell income-generating property in low price categories (under €1 million), while their non-Russian-speaking counterparts sell more expensive property – from €1 million for residential properties and from €3 million for commercial properties.

Compared to the averages across all countries, in Austria, investor interest in commercial property is especially high, while interest towards residential property is low. This is because the yield for residential property there is low, at 3% per annum, Mr Kachmazov said.

Interest in commercial property is also especially high in the United States and the Czech Republic, where yields are significantly higher than residential property (5–6% on average). In contrast, in Bulgaria, Hungary and Portugal, the demand for commercial property is well below average. “In such resort countries clients usually buy residential property for their own use and tourist lease. Few of them are interested in purchasing commercial real estate per se”, Ms Kozhevnikova said.

Interest in commercial property is extremely high in Austria, the United States and the Czech Republic, and extremely low in Bulgaria, Hungary and Portugal.

As such, Russian-speaking investors can be divided into four categories based on their budgets:

Price category, €

Residential property

Commercial property

Above average


Austria, United Kingdom, Germany, France

€300,000 – €1 million

€3 million – €10 million


Hungary, Italy, Cyprus, United Arab Emirates, Slovenia, United States, Croatia

€150,000 – €1 million

Under €3 million

Below average


Greece, Spain, Latvia, Portugal, Czech Republic

€150,000 – €300,000.

Under €3 million


Bulgaria, Thailand, Turkey, Montenegro

Under €150,000

Under €1 million

There is a correlation between the price categories mentioned by the respondents and their answers to the question about the dynamics in the number of Russian-speaking investors. Those who mentioned higher price categories typically cited an increase in the number of investors. Therefore, it can be assumed that the higher the price category (at least within the limits used in the survey), the higher the growth in the number of investors within this category.

The higher the price category (under €3 million) for commercial residential property, the higher the growth in the number of Russian-speaking investors.

The number of Russian-speaking investors taking out loans to buy property is increasing in Austria, Germany and the Czech Republic, while it is shrinking in Italy, Latvia and Montenegro. “The first three countries provide cheap loans and their markets are growing but the latter three markets are unstable, so loans are expensive and difficult to secure”, Ms Kozhevnikova said.

Rental businesses are expected to yield about 7% per annum

The respondents estimated the average yield Russian-speaking investors expected their rental businesses to generate at 6.7% per annum. This mirrors the results of Tranio 2016 survey, in which most respondents chose the "From 4% to 8%” answer option.

On average, Russian-speaking investors expect their rental properties to yield 6.7% per annum.

In most countries, yield expectations are close to the average – 6% in Austria and Greece and 7.7% in the United Kingdom and the United States. However, the expected yield is 11.4% per annum in Croatia and 8.7% per annum in Thailand. This result mirrors the 2016 survey, where Thailand was the country where yield expectations were especially high – the “over 8% per annum” option was chosen by 62% of respondents for income-generating residential property and by 80% of respondents for commercial real estate. In contrast, the expected rental business yield rate is 5% per annum in Cyprus and 5.2% per annum in Portugal.

Russian-speaking investors have extremely high yield expectations for their rental properties (over 8% per annum) in Croatia and Thailand and extremely low yield expectations (about 5% per annum) in Cyprus and Portugal.

A moderate negative correlation between the expected yield rate and the prevailing property price categories by country can be observed. In countries with properties in higher price categories, on average, lower yield rates were expected compared to “cheaper” countries. “This corresponds to the market”, Ms Kozhevnikova said. “The higher is the demand, the more expensive the property and the lower the yields. For example, the most expensive property market in Germany is Munich, where the long-term rental yield is about 2% per annum”, she added.

Investors plan on selling their property in about 7 years

5.5% of the survey participants said that most investors did not plan on selling their property at all. The others specified investment project terms ranging from 0 to 25 years. The average term of ownership before sale among all countries was 6.8 years, which again mirrors the results of the previous Tranio survey – in 2016, the majority of respondents said that Russian-speaking investors were going to sell their property in 5 to 10 years after purchase.

On average, Russian-speaking investors plan on selling their property in 6.8 years.

In certain countries, the typical investment project term diverges significantly from the average. For example, investors in Thailand plan on selling their property in 4.9 years on average. “Speculative development is frequent in Thailand”, Mr Kachmazov said. “Investors want to build quickly, sell quickly and get as much money as possible. It is busy there, but there is little liquidity. People who have invested in development are hardly selling”, he added.

In contrast, the average expected length of ownership in Austria and Germany are 9.6 years and 8.3 years respectively. “In these countries, buyers mostly purchase rental properties to receive a stable income for years”, Ms Kozhevnikova explained.

No more than 12% of Russian-speaking investors put funds into development projects

Respondents estimate the share of Russian-speaking development and redevelopment investors at 12.3%. The difference between the responses of Russian-speaking and non-Russian-speaking realtors (11.9% and 18.6% respectively) could indicate that non-Russian-speaking realtors more often cater to investors who put funds into Value Added projects.

In the 2015 and 2016 Tranio surveys, most respondents indicated that the share of development and redevelopment project investors was below 10%. A comparison of this data with the latest survey results supports the hypothesis that this share is growing over time.

Thailand stands out from the other countries – according to the respondents, 40% of Russian-speaking investors are engaged in development and redevelopment projects there. This figure is also comparable with the results of the 2016 survey in which most respondents from Thailand indicated that over 30% of Russian-speaking buyers are ready to invest in Value Added projects.

Low interest in development and redevelopment (about 6% of investors) can be observed in Croatia, the United States, Italy. In Hungary, 100% of the respondents indicated that there was no such investment, a result similar to the 2016 survey.

Equity partnership is the most popular property-based investment vehicle

Most Russian-speaking realtors (61%) said equity participation was the most popular investment vehicle applicable to real estate. The shares of the second and the third most popular investment vehicles – real estate funds and mezzanine loans respectively – are much smaller (13% and 26% respectively). Answers from non-Russian-speaking realtors are different: 64% of the respondents mentioned real estate funds, 36% mentioned equity participation, and mezzanine loans were not mentioned by anyone.

“I think many Russian-speaking realtors are now getting involved in small joint equity development projects with their Russian clients”, Mr Kachmazov explained. “Foreign realtors are not as close to their Russian clients. The most advanced clients have access to funds through their Swiss and English private bankers, while buyers with lower budgets don't have such connections so they are limited to equity projects”, he added.

The most attractive advanced investment vehicle among clients of Russian-speaking realtors is equity participation, while real estate funds is the most attractive among clients of non-Russian-speaking realtors.

In most countries, equity participation is also the most popular investment vehicle, although its share varies significantly:

Greece, Italy, Thailand, France, Montenegro

Real estate funds lagging in second place; 

no  mezzanine loans.

Austria, Turkey

Mezzanine loans are the second most popular investment tools, but lag in popularity compared to equity participation; no real estate funds.

Germany, Latvia

Mezzanine loans and real estate funds have approximately equal shares, but are far less popular than equity participation.

Spain, Cyprus

Mezzanine loans and real estate funds have approximately equal shares, almost comparable to that of equity participation.

Croatia is the only country where most respondents (80%) chose real estate funds over equity partnership.

Non-Russian-speaking realtors believe 50% of investors use the services of their own investment advisers, lawyers, bankers, or management companies, compared to 22% for their Russian-speaking counterparts.

Half of the foreign realtors' Russian-speaking clients used the services o their own advisers and other professionals, while this figure was less than one-quarter among Russian-speaking realtors.

A large share of clients using the services of their own advisers can be observed in Latvia (65%) and Cyprus (46%). In contrast, this is below average in Montenegro and Turkey (13% and 5% respectively).

More investors are buying “golden visas”

The average number of people taking part in investment-for-residence programmes has increased globally in recent years, as indicated by 48% of the respondents. This is a rare instance in which Russian-speaking and non-Russian-speaking realtors were in agreement.

All Portuguese respondents reported the figure to have grown, and the majority in Montenegro (79%) and Spain (68%) said the same. In addition, the survey results indicate that the number of Russian-speaking participants in residence-for-investment programmes also grew in Cyprus, Greece and Italy. Conversely, it declined in France and, most significantly, in Latvia, as stated by 89% of local respondents.

Almost half (49%) of the Russian-speaking realtors observed an increase in the number of clients wishing to become tax residents of certain foreign countries. At the same time, most non-Russian-speaking realtors (73%) said that the number of such clients had not changed.

“Tax residency matters can be very sensitive and Russian nationals are more used to discussing them with compatriots in their native language rather than with foreign realtors”, Mr Kachmazov explained.

The number of Russian-speaking investors who want to become foreign tax residents is growing.

There is a marked increase in the number of clients who want to change their tax residency in Austria, Germany, Greece, Italy, Portugal and the Czech Republic. Conversely, Bulgarian and Latvian realtors indicated a decline in the number of such investors.

Unreasonably high yield expectations are usually the cause of aborted transactions

Among Russian-speaking investors, the main factor behind complicated or aborted transactions is unreasonably high yield expectations. This opinion was shared by 58% of the Russian-speaking respondents. However, difficulty in finding or selecting a suitable property was the most common factor (42%) cited by non-Russian-speaking realtors, while unreasonably high yield expectations was second.

Along with difficulties in finding a suitable property, non-Russian-speaking realtors reported that it was hard for their clients to structure the transaction and optimise taxes significantly more often Russian-speaking realtors. However, among the issues Russian-speaking realtors most often complained about were problems with compliance, the buyer's incompetence in investment issues and sluggishness (mentioned by 20% of Russian-speaking realtors compared to 0% of non-Russian-speaking ones).

According to Russian-speaking realtors, the most common reason why transactions involving Russian-speaking investors were aborted is their exaggerated yield expectations, while non-Russian-speaking realtors believed this is due to difficulties in finding or selecting a suitable property.

Country-specific statistics show that unreasonably high yield expectations is also the most common factor everywhere except in Greece, the United Arab Emirates and Turkey, while in the United Kingdom this option was not chosen by anyone. However, Greece is the only country where difficulty in finding or selecting a suitable property was the most common (73%). A large (but not predominant) share of votes accounts for this factor in Turkey (43%) and Cyprus (38%). “Greece has been in crisis and as such, has few high-quality offers, while in Cyprus, real estate is more expensive than in Greece”, Ms Kozhevnikova explained.

Conversely, buyer incompetence is the biggest factor contributing to aborted transactions in Turkey (cited by 71% of respondents). The same issue was noticeable in Portugal (50%) and Thailand (33%).

“Problems with lawfulness of the buyer’s capital (compliance)” was not the most popular in any country but has a significant share in Latvia (63%), Austria (50%), the United States (50%), Spain (40%), and the Czech Republic (27%).

“Spain and the United States have historically been strict about the origin of funds”, Mr Kachmazov said, adding, “The situation in Latvia has deteriorated much in view of the ABLV Bank dissolution and other news about chasing so-called Russian money. The Czech Republic was also quite liberal, but the country seems to have started tightening the screws as well”.

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