Agent 002 Closing at Year-End

Agent 002, a mid-sized real estate company, will cease business activities on Dec. 1 "until the end of the financial crisis," said the company's general director, Leonid Menshikov last week.

The company was not being liquidated and would still honor all obligations to its customers, agents and other real estate companies, Agent 002 said in a statement.

In the last six months, the amount of customers has fallen dramatically and will probably fall further in the near future, Menshikov said. At the same time, operating and advertising costs have risen, and the combination could give the firm "huge losses."

He said the company's profits totaled $3 million last year.

Other companies in the real estate sector admitted that times are difficult, but said they are not ready to close.

"Supply has grown a bit, demand has remained unchanged and there is an element of client insecurity," said Grigory Kulikov, chairman of the board at MIEL.

"Developer projects that were on paper have been halted," said Konstantin Popov, chairman of the board at MIAN. "But we haven't touched any of our realtors yet."

Menshikov said the difficulties in the sector were far from over and would leave few companies untouched.

"The only ones who will survive are large companies for whom real estate is not the only business," he said.