A Selection of News and Topical Views
- May. 27 2013 16:34
Green Homes Project Enters Phase Three
Swedish architecture, design and property management company, White, will develop a phase of the Triumph Park residential project in St. Petersburg for Mirland Development Corporation.
The estate, on a 40-hectare plot, was awarded a BREEAM certificate at the design stage, a first-time record for a Russian residential scheme.
With Signy Group, White will develop a concept building and landscape design proposal, comprising 120,000 square meters of residential buildings, along with underground parking, kindergartens, schools and secure yards.
Mott MacDonald advised on the ecological sustainability of the project which will use energy efficient lifts, natural ventilation and maximum use of daylight. It also uses sustainable building materialsá and 95 per cent of waste will be managed or recycled rather than sent to landfill.
New District In St. Petersburg
LSR group is launching the pre-sales at its residential sub-district in the Krasnogvardeisky district of St. Petersburg. The entire scheme covers 600 hectares along the Okhta river, a tributary of the Neva.á The initial phase comprises 110 hectares populated withá apartment blocks up to 19 stories high and more than 12,000 three- and four-room apartments.á The project will include social infrastructure and commercial premises.á The average price per square meter starts at 55,000 rubles ($1,750).
Aleksandr Vakhmistrov, CEO of LSR Group, said in a statement: "Construction of this project means in fact the start of a new city district. However, the price per square meter today is comparable to the standard rate specified by the Ministry of Regional Development of Russia for St. Petersburg. We are able to offer such price due to LSR Group subsidiaries providing the full cycle of housing project implementation: production, design and construction".
Famous Store Seeks Top Brands
The famous department store of the Soviet era in Yekaterinburg, Passage, is being renovated with plans to reopen in the third quarter of 2014.
The 64,000 square meters floorspace is spread over seven levels, with underground parking for 450 cars. As a shopping and entertainment complex it will include a cinema and the investor-developer Society Malyshev-73
Tatyana Klyuchinskaya, head of the department of retail space at Jones Lang LaSalle, which is leasing the property, said Yekaterinburg will see about 385,000 square meters of new retail space in the next two years, one of the highest rates among Russia's larger cities.
Despite this level of competition, she said a retail store in a central location, with a recognized name and a large pool of tenants will have a distinct advantage.
Real Estate Deals For 30 Million Square Meters Dissolved
By Lena Smirnova
Moscow city government has halted construction projects comprising more than 30 million square meters since 2010, almost three times earlier estimates, according to Deputy Mayor MaratáKhusnullin, quoted in Vedomosti.
Moscow Mayor's Office terminated contracts for 11 million square meters, mostly due to concerns about the impact on road traffic. While the review of planning permissions was underway, the documentation for many more projects expired, including investment and rental contracts. This affected projects at 629 sites, covering 14.8 million square meters.
"It was aácrisis situation then," explained Igor Pushchyon, senior consultant atáCushman & Wakefield. "The future ofáthe projects was unknown, andáthe authorities didn't want theáterritories toástand empty, so they came up with aápool ofáprojects that weren't feasible. Theámove made sense."
Mayor Sergei Sobyanin launched the Town Planning Land Commission in November 2010. Not all of the 600 hectares will likely be brought back onáthe market, Puchshyon said.
During the lifetime of the Town Planning Land Commission, the authories have allowed development to continue on another 30.5 million square meters.
Businesses Migrate To Outer Districts
By Mark Gay
The mining and energy sectors dominate demand for office space in Moscow, accounting for 26 percent of demand in the first quarter of this year, according to Jones Lang LaSalle. Manufacturing represented 24 percent and business services, 22 percent. Russian companies accounted for 84 percent of closed deals, according to CBRE.
In the first quarter, 260,000 square meters entered the market, a 113 percent increase on the year.
Of 13 completed buildings being put into operation, two are Class A: White Gardens Office Complex at Lesnaya Street and Rosso Riva business center at Shlyuzovaya Embankment. Of the total, 70 per cent are Class B+, including Navigator 2, Lotte Business Center, Park Tower and City Point.
More than half of new completions were in decentralized submarkets, beyond the Garden Ring and also between the Third Transport Ring and MKAD. Vacancy rates increased slightly to 12 percent as measured by CBRE, 14.2 percent according to Jones Lang LaSalle, though higher for Class A offices, at 18.5 percent.
The largest first quarter deal was Gazprom's lease of 24,600 square meters in Varshavka Sky, Metropol Development's new business and sports centre in the south of Moscow.
The construction arm of Russian Railways, Roszheldorproject, leased part of Chaika Plaza IV (3,500 square meters) in Prospect Mira. MasterCard took space on Tsvetnoy Bulvar in the Legend business center (1,800 square meters). Photographic and optical company Nikon leased a combined 2,000 square meters for a service center and headquarters in Delta Plaza, on the Garden Ring near Chkalovskaya metro station.
However, decentralized properties continue to attract the majority of demand with 80 percent of total leasing activity.
CBRE expects demand in outer districts to grow. Restrictions in the Central Business District mean White Gardens, the first Prime Class A office building to be delivered since 2011, may also be one of the last. The zone up to the MKAD border saw the highest volume of new delivery (55 percent) and take-up (almost 131,000 square meters or 59 percent).
In this space, MR Group is one of the most active developers, with the first phase of Savelovsky City project nearing completion.á "Class B businesscenters beyond the third ring road are among the most highly sought after among large and medium-sized companies which have a strong back office and strive for an optimal balance between price and quality," said Irina Dzyuba, a partner with MR Group, in a published statement.
After TTR-MKAD, the next-biggest volume of take up was seen in the area between the Garden Ring and TTR (almost 52,000 square meters, or 23 per cent of the total) compared to 32,000 square meters in the Central Business District (or 15 per cent).
There were few deals beyond MKAD although, in a moderate market, CBRE business parks are likely to be one notable growth area.
Despite the headline-impact of large leases by well-known companies, the vast majority of leased units were smaller than 500 square meters (47 percent of the total in the first quarter) followed by those of up to 1000 square meters (28 percent) and up to 2000 square meters (16 percent). Units sized from 2001 to 5000 square meters accounted for 7 percent of leases signed, and only four deals were signed for areas above 5000 square meters.
Hubs To Integrate Transport
By Alexander Panin
Russian Railways has presented plans to build the first of 57 transport hubs in Moscow. Its subsidiary, the Railway Stations Directorate, is building park-and-ride facilities, beginning with the stations of Domodedovo (two sites), Tsaritsyno, Yasenevo, Dmitry Donskoy Boulevard, Lianozovo and Bibirevo.
These first seven hubs have a capacity of 1,086 cars in total, and customers can use pay for their parking at the same time as their train ticket.á
Moscow City government is developing at least 255 hubs over the next eight years. Of these, 190 are simple hubs, called level one hubs. The authorities will clear space around railway stations, removing unauthorized vendors, and providing limited paid parking.á
More complex hubs will allow interchange between public transport systems. In addition, the Moscow Ring Railway will be converted for passenger use, with 31 stations to be opened by 2015.
Finally, 42 larger hubs will be built from 2014 onwards, by theá Railway Stations Directorate, connecting commuter trains to the metro.
The authorities will grant investors the right to develop commercial property within the hubs as a way to offset the cost.
Moscow Gains Global Deal Ranking
Moscow competed strongly with the top global real estate markets at the end of 2012 as investors ploughed $3 billion dollars into prestige projects.
The city pushed its way onto a list of top destinations for commercial real estate compiled by Jones Lang LaSalle. It's some much-needed publicity for Moscow, helping to raise the city's profile among international developers and investors.
At the start of this year Russia was buried in the compilation of top global cities for investment, compiled by the Association of Foreign Investors in Real Estate (AFIRE). Not only did professional investors select US cities as four of the top five destinations. Moscow was the only Russian city on the list and slipped from 13th place to 25th.
In Jones Lang LaSalle's survey released in mid-April, the Russian capital was tied forá8th andá9th places with Washington D.C., which saw theásame volume ofáinvestment fromáOctober through December. New York came first, followed by London.
What boostedáMoscow's performance ináthe fourth quarter was theápurchase ofáthe White Square office complex byáO1 Properties forá$1 billion ináDecember, Russia's largest ever office deal. Russia's full year volume was $8.7 billion, of which Moscow accounted foráover 90 percent.
Although aárecord foráRussia, theáfigure is still "not impressive" atáa country level, Jones Lang LaSalle said. Iná2012, theáUnited Kingdom recorded $52 billion ofáinvestment intoácommercial property, Germany $31 billion andáFrance $21 billion. Russia may see more modest results this year, with theáoverall investment intoácommercial real estate likely toáslide toá$7.5 billion.
While Afire's survey reflects investor awareness, the Top Global Capitals survey simply reflects the volume of deals, said Tom Devonshire-Griffin, regional director andáhead ofácapital markets atáJones Lang LaSalle. "The rationale behind that is not about investor interest, it is really about theáproduct. Record figures are due toálarge deals, andáthe market does not forecast any similar ones ináthe near future."
Stanislav Bibik, executive director ofácapital markets atáColliers International, said prime quality offices account forájust 10 percent ofáthe 2.5 million square meters ofáClass Aáproperties currently available ináMoscow. "The amount ofáhigh-quality stock that aáforeign institutional investor can really look atáis extremely limited."
Property Prices In New Territories Drop
The Moscow Times
The decline in house prices in the territories recently annexed to Moscow is accelerating, according to the Rway real estate portal. Only new, economy-class housing has proved resilient.
In April, land prices in the annexed territories dropped 2.5 percent in rubles and more than 4 percent in dollars. The average cost of one square meter in the new expanded territories is now 80,000 rubles or about $2,500, said Rway, citing Vedomosti.
Immediately after Moscow's expansion came into effect in July of last year, prices jumped by 30 percent, but then they began falling.