New Homes Expo Announced

VedomostiThe planned exhibition center, scheduled to open next month, would be permanent.
Prospective home-owners will finally be able to compare the full range of new housing offered in the capital when a permanent exhibition-cum-trade fair is launched next month.

The plans for the as-yet unnamed expo center were announced last week by Irina Sergeyeva, deputy head of City Hall's department for city programs, at the opening of the Real Estate 2002 exhibition.

The expo will be housed in the 21st pavilion of Rosstroiexpo, or the Russian Construction Expo, complex on Frunzenskaya Naberezhnaya. In its initial phase, the exhibition will occupy about 1,000 square meters, but this area could eventually be doubled.

The exhibition space will be primarily devoted to companies' exhibits, but a special center is also planned where customers will be able to seek advice from lawyers, notaries and representatives of the city authorities.

The organization of the consulting section has yet to be decided. Company representatives may simply take turns on duty, said Alexander Rulkov, deputy head of the press service for the capital's building sector.

First Deputy Mayor Vladimir Resin, head of the department of architecture, construction, renovation and development, signed an order last week creating a committee charged with organizing the exhibition.

Most of the major building firms and real estate agents operating on the new housing market have said they are keen to participate in the fair. These companies include SU-155 and Co., the PIK group of companies, the DCK-2 housing construction plant, Zhilsstroiindustriya, the Moscow City Real Estate Service and the Moscow Investment Real Estate Agency, or MIAN.

City Hall's property sales department has also thrown its weight behind the planned exhibition.

"We will take part ourselves and have recommended that all our accredited real estate agents do likewise," said Yevgeny Leonov, chief marketing executive of the property sales department. "It will be much easier for the potential customer to make an initial choice at this kind of venue."

Leonov said the format of the fair being developed by his department fundamentally differs from other exhibitions connected with real estate. Professional sales managers will replace untrained exhibition workers, and specifically compiled information packs will be distributed.

"The exhibition is not the place for signing contracts or transferring money," said Oleg Repchenko, general director for marketing with MIAN. "The maximum that we want to organize is the possibility [for the client] to reserve an apartment that they like and, later, to continue negotiations in our office."

The chance of getting a look at even 50 percent to 60 percent of new buildings on the market under one roof is extremely convenient for clients, said Sergei Polikarpov, the general director of the Moscow City Real Estate Service.

In order for the project to be a success, a strong team of competitors would be required, he said.

Leonov agreed. He said for the idea to work, all major firms would have to be present at the exhibition.

But not all potential participants are so positive.

DSK-1 deputy general director Andrei Pankovsky said his company was still trying to decide what format its participation would take if it were to join the expo.

He said the lease payment in the Rosstroiexpo complex would be about $4 per square meter per day, or $1,460 per square meter per annum. The question of how this money could be recouped would need to be studied, he said.

On the other hand, Repchenko said, the area of a standard stall at the trade fair would comprise 15 to 20 square meters. Therefore, the monthly cost for a single participant would be no more than $2,500.

He said this was "a comparatively low figure" compared to his company's advertising budget for one newspaper alone -- Iz Ruk v Ruki.

"So far it is hard to say when we would start to break even, but in any event, we would need to spend several months on promotion," Repchenko said.

Developers of luxury housing are also wavering.

Kvartal deputy general director Alexander Baigushev said his company had not discussed the possibility of participating in the exhibition, but that the final decision would depend on two factors -- namely who was participating and whether it would make economic sense to do so.

"If it's going to be mostly representatives of the generic housing companies, then clearly it would make no sense for us to take part," he said. "If elite housing is tucked away in a separate corner, then we would probably be represented."

Alexei Belusov, general director at marketing company Capital Group, agreed.

"It all depends who they manage to get under their roof," he said.

"In a normal car showroom you don't exhibit the Zhigulis and BMWs and Audis together. If the bulk of visitors will be oriented toward the [less expensive] Marino district, then this is of no interest to us. If it will be visited by people prepared to invest $70,000 to $80,000 in an apartment, then we're there," Belusov said.