A New Approach To Investment

Mark Gay

Several high quality sports and entertainment complexes are being built in Moscow, with international expertise. Developers plan to shake up the shopping experience, and seize the attention of shoppers who have become inured to omnipresent brands and retail outlets. Moscow's Galactica Park and the VTB Arena in Petrovsky park illustrate the imagination and ambition of investors and developers.

Such multi-function developments may help sports venues to increase visitor numbers throughout the year. It's a crucial lesson for the private and state-financed developers who are building stadiums for Russia's hosting of the FIFA World Cup in 2018. Will they achieve a legacy of long term use — or will we see white elephants where wooly mammoths once roamed? (Page 12)

High building standards, investment-grade office buildings, lower construction margins are all part of a different approach to investment. International finance is available for large transactions, and while it favors projects that are up and running — tenanted offices and operational shopping centers — domestic and international, Russia-based developers are giving the market some positive, individual characteristics.

With the help of Russia's now-dominant domestic banks, they are building  retail, offices and industrial projects not just near the twin capitals — but across the regions, in places like the Russian republic of Tatarstan.

For an inside view on business, regulation and politics from someone who has been on the Russian development scene for two decades, read our interview with David Whitehouse, Managing Director, Russia & CIS, for AECOM. (Page 16)

In an uncertain economy sitting on cash offers little comfort. The late-summer attempts by central bankers to wean the markets off infusions of freshly printed money, only caused emerging market currencies to fall. Currency risk seems to have a life of its own.

Real estate investment is not immune, but offers the chance of gaining access to pockets of growth: consumer spending, the growing leisure sector, sports and entertainment, demand for premium office space, and manufacturing and warehousing that is harnessing youthful labor forces in emerging markets. (Page 8)