Investment in Russian commercial real estate hit a record high in the second quarter of 2011, exceeding even the boom levels reached in the years of 2005 to 2008, according to new research released by CB Richard Ellis.

There were 11 deals in Russia in the second quarter of 2011 amounting to EUR 1.6 bn - the largest transaction volume ever recorded on a quarterly basis. The second-biggest was the third quarter of 2008, when investments reached EUR 1.3 bn across 20 deals.

The largest deal in H1 2011 was the purchase of the 334-room Ritz-Carlton Hotel in central Moscow for EUR 424 mln. Offices accounted for 42% of total transactions, while the retail sector came second, with a 31% share of the market.

Moscow received the lion's share of investments with just two deals being closed outside the capital: the Aeroplaza business centre in St. Petersburg (33,000 m2); and the SanMart shopping centre in Kaluga (47,000 m2).

'The record volume of deals seen in the second quarter give rise to cautious optimism over Russia's real estate investment market,' said Christopher Peters, a director of CBRE's Research department in Russia. 'The main constraint of investment, particularly from international investors, is the lack of high-quality supply across all segments - this has been thrown into sharper focus by the crisis: with higher vacancy rates and lower rental rates, it is only the very best buildings that can show high profits.'