Russia comm. property yields to tighten in 2011-report

* Russia comm. property yields to fall 50-100 bps in 2011

* Total 2010 investment volume $3.7 mln; 94 pct in Moscow

* Rising rents, lower vacancies, more for sale to boost mkt

LONDON, Jan 27 (Reuters) - Russia's commercial real estate market will continue to be driven by its risk-savvy domestic investors in 2011, with them dominating Moscow-centric deal volumes and pushing yields lower, a survey showed.

A market overview by real estate consultants Cushman & Wakefield said on Thursday transaction volumes attributed to domestic investors had outstripped pre-crisis levels, and it expected this upward trend to continue.

In 2010, domestic investors in Russia did $3.1 billion worth of deals, against $674 million by foreign investors. This extended a pattern that emerged in 2009 and is in contrast to the 2006-2008 boom years when foreign investors dominated.

Foreign investment in Russia has plunged 84.5 percent since hitting a peak of $4.3 billion in 2008, while over the same period domestic investment has gained 109.6 percent.

"At the current phase of the market cycle, the leading roles belong to domestic investors, who can estimate the market trends better and (are) ready to accept higher risks in order to acquire properties at the right time to maximise profits," the survey said.

There was a slight pickup in foreign investment in 2010, and the report said that with rising rental rates, shrinking vacancies and more quality premises for sale, more foreign capital and institutional investors would return this year.

Cushman & Wakefield said these factors would nudge yields down by 50-100 basis points towards the back end of 2011. At end-2010, office yields were 9 percent, retail yields were 10 percent, and high-grade warehouse and industrial yields were 10.5 percent.

In 2009, the average sector-wide yield was 13 percent.

Moscow was the centre of Russian property investment activity in 2010, accounting for 94 percent of $3.7 billion total investment volume. (Reporting by Karen Foster; Editing by Andrew Macdonald) (See www.reutersrealestate.com for the global service for real estate professionals from Reuters)