Criteria Proposed for Office Center Grades

ST. PETERSBURG -- Three international real estate consultancies have presented new criteria for the classification of office centers, recommending that the system be implemented to ease communication with clients and partners.

"The existing classifications were created at the beginning of the decade, when any reconstructed building could be labeled an A-class office center. Market players often use various terms to describe the same thing and imply different things with the same term," Nikolai Pashkov, director for professional activities at Knight Frank St. Petersburg, said last week at a news conference.

The new classification was designed as a joint effort by Colliers International, Jones Lang LaSalle and Knight Frank, who are members of the St. Petersburg Research Forum. The system was designed specifically to apply to the conditions of the local market and is based on a classification system created by the Moscow Research Forum.

"We took into account the recent trends and limitations typical for the St. Petersburg market, including the redevelopment of industrial areas in the city center, decentralization of office space and introduction of new multifunctional centers," said Andrei Rozov, head of the St. Petersburg office of Jones Lang LaSalle.

The new criteria define benchmarks for market professionals and should bridge the gap between Russian and European standards, the companies said.

"More and more international investors and tenants are entering the St. Petersburg market, and they expect comprehensible assessment and classification of property," Rozov said.

The new classification may become an unwelcome innovation for many property owners, however.

"This classification is rather strict, probably even stricter than its Moscow prototype. If we apply it immediately, I don't think a single office center in the city would retain the classification claimed by its owners," said Boris Yushenkov, general manager of Colliers International in St. Petersburg.

Yushenkov said the new classification system was only a recommendation for market players. All three firms will use the classification system in their market reports for 2008.

Yushenkov also promised that previous market reports would be corrected in respect to the new classification. As a result, statistics will show a decrease in high quality office space in the city, he said.

"Taking into account how the new classification system was introduced in Moscow, I expect that developers will sneer at it for some time, but then the market will accept it," Yushenkov said.

The St. Petersburg Research Forum is also planning to present classification criteria for shopping centers and logistic centers.

"Information exchange is the main substance of our alliance. For many years, we could not assess for certain the total volume of the market and could not estimate our share in this market. We wandered about like blindfolded people in a dark room. I hope that the situation will change now," Yushenkov said.