Spotlight on $200M Theater Quarter

For MTAnalysts questioned the idea of building townhouses on Bolshaya Dmitrovka, due to the street's lack of green space.
Large-scale and ambitious construction projects right in the heart of the historic center are the norm rather than the exception in Yury Luzhkov's Moscow, but the $200 million Teatralny Kvartal, or Theater Quarter, is likely to raise an eyebrow or two.

The 70,000-square-meter project, consisting of two developments -- on Kamergersky Pereulok and on Ulitsa Bolshaya Dmitrovka -- envisages the complete redevelopment of two historic blocks and the construction of modern apartments and retail space.

While the project includes the reconstruction of architectural monuments, such as the 1903 Dokhodny Dom Mikhailova, several run-down buildings will have to be demolished to give way to elite apartments and prime shopping.

The developers will also reconstruct some of the buildings belonging to the Chekhov Moscow Art Theater, located on Kamergersky Pereulok, giving the project its name.

The complex between Kamergersky Pereulok and Georgiyevsky Pereulok, located behind the State Duma building, will have apartments, a shopping gallery and underground parking. The complex on Bolshaya Dmitrovka, which will replace a number of dilapidated buildings, will offer townhouses in addition to stores.

The project will be built by construction giant Ingeokom, which is involved in the Moskva-City development and whose previous work in the city includes the Atrium mall near Kursky Station.

Forty percent of the $200 million price tag for the development will come from MIAN Group, whose chief subsidiary is MIAN Realty, one of Moscow's largest real estate agencies. MIAN will also serve as the Theater Quarter's managing company.

The project is scheduled for completion in 2009, and its payback period will be between five and six years, according to MIAN.

Market watchers polled by The Moscow Times praised the project's central location, a short walk from the Bolshoi Theater or the Kremlin, but pointed to some of the factors that might spell trouble for its residential component.

The complex on Kamergersky Pereulok will be nearly surrounded by existing buildings, including the large Stalin-era house facing Tverskaya Ulitsa, which means that some of its apartments will not be getting enough natural light, said Kaido Kaarma, director at Miel Realty.

"For retail this is not critical, but apartments with windows facing walls and other windows may not be too popular despite the location," he said, adding that a hotel could fit that location much better.

The idea to build townhouses on Bolshaya Dmitrovka might not be justified because of their location in the middle of a treeless neighborhood surrounded by other buildings, Kaarma added.

"A townhouse implies a small plot of land and relative privacy," he explained.

The decision to add a retail component to the project was valid, as Kamergersky Pereulok and Bolshaya Dmitrovka are close to Tverskaya Ulitsa, the city's chief shopping corridor, said Maxim Zhulikov, commercial real estate consultant at Penny Lane Realty.

The fact that Kamergersky Pereulok is a pedestrian street also fosters its attractiveness as a popular retail destination, Zhulikov added. "But future tenants in the new complex may face severe competition from the huge amount of retailers already present in the area, as well as very high rents," he said.