Sotheby's Moves In to Elite Moscow Real Estate

Wealthy Muscovites can now turn to the Sotheby's auction house for help in navigating the more expensive end of the housing market.

On Wednesday, the Kirsanova Realty company opened Sotheby's International Realty's first representative office in Moscow — its 206th worldwide. Moscow is the only Eastern European city that has successfully tempted the elite real estate company.

Sotheby's International Realty was founded in 1976 as a subsidiary of Sotheby's Holdings Inc. Among SIR's biggest deals last year were a 5-hectare Santa Barbara estate built in the 1920s for $29 million and a villa on the Florida coast for $35 million.

Kirsanova Realty is a subsidiary of the Russian company Noble Gibbons. Filipp Bogdanov, a Noble Gibbons partner, became Kirsanova Realty's general director.

As a Sotheby's representative, Kirsanova Realty looks out for SIR's interests in Moscow and sends any of its clients interested in real estate in other countries to Sotheby's.

Properties sold through SIR generally cost more than $1 million. Kirsanova Realty starts its list of exclusive properties in Moscow at around $400,000, Bogdanov said.

Kirsanova Realty's managing director Nadezhda Kot said a high price tag, while necessary, is not sufficient for a property to be included in SIR's listing. More important to SIR is the quality of the building and the originality of the design, she said.

Kirsanova Realty will not likely display more than 10 to 15 properties at one time, Bogdanov said.

He added that the Sotheby's name and the ability to offer SIR real estate in other countries could increase the revenue of the former Noble Gibbons housing department by 20 percent to 30 percent in the first year alone.

However, Pavel Zdradovsky, manager of the sales department at Penny Lane Realty, does not think the new name will give a competitive edge.

"Penny Lane is a marketed brand, and Noble Gibbons is another. But no one has heard of Kirsanova Realty," he said. "For the majority of people, Sotheby's doesn't mean anything either."

But Muscovites' ability to obtain the most expensive housing should not be underestimated.

"I'm confident elite real estate in Moscow has good prospects," said Cameron Sawyer, president of GVA Sawyer property advisers. "I have often heard there are as many Russians worth more than $100 million as there are rich Americans."