Azerbaijan, Baku, June 26 / Trend A.Akhundov /
Commercial facilities in Baku continue to cheapen and the price reduction will be within ten percent by late 2011, MBA Group CEO Nusret Ibrahimov told Trend.
"The prices of commercial facilities fell by 5.7 percent since early 2011 and a 6-6.2-percent decline is expected as of the first six months and 10-percent decline in late 2011," Ibrahimov said.
He said this is mainly linked with a lower profitability of these objects.
"The number of commercial buildings, particularly commercial properties grows in the market and this is one of the reasons for the decline in their profitability. Naturally, the sale price is directly linked with a profitability of these objects. So, now the market observes a reduction in prices," Ibrahimov said.
He said the expenditures on the building of commercial properties are almost the same as the expenditures on the building of houses, while the average sale price of these objects in 2.7-2.8 times higher than the sale price of houses.
"This is linked with the fact that commercial sites are more profitable, so they are expensive. As soon as the profitability of commercial buildings will be closer to the profitability of residential apartments, the prices for commercial facilities will decline. In addition, with the decline in profitability the expenditures on managing and operation of facilities increase each day. price reduction is inevitable under such circumstances," Ibrahimov said.
MBA Group said the price of a non-residential facility amounted to $3,203 per square meter in Baku in April.