Moscow Office Rental Prices: A Hedonic Analysis

The paper analyzes Moscow office rental prices in a hedonic model and builds a hedonic index for 2001-2010. The main hedonic factors, determining about 70% of the rental price variation, are the class of the office building, location, and transport accessibility. Hedonic index shows that during the boom of 2005-2008 the rental price of a comparable object grew by a factor of 2.4 in US dollar terms, but this increase was reversed completely during the crush after the global financial crisis. The paper underscores the importance of using hedonic indices instead of simple average price series for the analysis of long-term trends in real estate markets, because hedonic indices take into account the changes in composition and quality of office objects on the market.