Real Estate


Q1 2007

Going Up In Russia

  • January 01, 1970

Moscow: the London of the East?

  • January 01, 1970
Over the last few years Moscow has established a reputation as one of the most dynamic real estate markets in Europe. The city’s sheer size and regional importance are finally putting it on the map as a global office destination. Moscow’s active economic growth, which continues to attract local and international businesses, has stimulated the formation of a vibrant office market that is starting to resemble the more mature markets in Western Europe. Russia’s capital is now home to some of the continent’s biggest investment and development schemes, such as Moskva-City business district, and boasts Europe’s second-biggest office space take-up.

Offices: The Year Ahead

  • January 01, 1970
The Moscow office market had a record year in 2006, with a take up figure of 1.3 million square meters, which was an all time high, rental rates at levels of those prior to the 1998 financial crisis, and deal volumes increasing significantly. What then does 2007 hold in store? There are a number of trends that will influence the Moscow real estate market in 2007, which are discussed below.

Luxury Hotel Market

  • January 01, 1970
Moscow has long boasted the existence of the likes of Marriott, Kempinski and Hyatt, but currently the premium luxury segment of the hotel world is just entering the city’s hospitality scene. The Ritz-Carlton Hotel Moscow — the first truly deluxe hotel in Russia — whose construction was officially commissioned in December 2006, is scheduled to open its doors to its first guests in March 2007. It will offer a new standard of luxury and service for up-market clientele. The sales department of the Ritz-Carlton is already accepting reservations for rooms, conferences, and even bridal receptions, while market participants — hoteliers, operators and analysts — are anxiously awaiting this debut which is expected to change the existing “table of ranks” of Moscow’s best hotels.

Construction Risks

  • January 01, 1970
There are varied opinions about the construction process in Russia. Some people say it is impossible to build in Russia, some say that it is not difficult, just time consuming, while others say that it is neither. There are opinions that it’s possible to build with almost no permission or approvals and there are views that the approval process in Russia is so difficult and bureaucratic that some investors shelve their plans.

Warehouse Management

  • January 01, 1970
Warehouse complexes, like other commercial real estate projects, need effective management. Until recently similar services were exclusively demanded by Western developers building major Class A logistics parks in Moscow. Today the situation is changing at the roots.

Prices Rocket in Gambling Zones

  • January 01, 1970
Real estate prices in two of the four zones designated for legal gambling, set to come into existence in mid-2009, have seen a spectacular rise since the beginning of the year.

Rents vs. Russian Securities

  • January 01, 1970
The continuing economic stabilization in Russia and the strength of the Moscow real estate market are making foreign institutional investors more comfortable. International mortgage banks are more and more involved in cross-border real estate financing and re-financing. In the past year the Russian market has experienced a record number of such.

The Art of Connectivity

  • January 01, 1970
It’s impossible to imagine modern business trying to function outside the flow of information which drives it and pushes it forward, and this puts top-notch telephone and Internet connections right at the top of the list of an office tenant’s needs. But telecommunications only have begun to develop exponentially in Russia in the last 10 to 20 years and not all developers realize equally well their importance to the success of an office project.

Investment Confidence High

  • January 01, 1970
With all of the unprecedented levels of growth going on, it’s not surprising that the Russian property market has its fair share of cynics, especially when it comes to the short term. Phrases like “market overheating” or “complete meltdown” are bantered about these days, quite often by people searching for an upcoming downturn in Russian real estate.

In It From the Start

  • January 01, 1970
Fraser Lawson, partner at IntermarkSavills, talks to Edmund Harris about a career in Moscow’s residential realty market from its inception and tries to read its future.

Kiev Real Estate

  • January 01, 1970
Still far from maturity, a bit over-hyped in the wake of the Orange Revolution of November 2004, but about to make real progress after a recent slowdown and with lots of genuine potential for investors — that’s the lowdown on the Kiev real estate market in 2007.

Arbiter of Good Taste

  • January 01, 1970
Totan Kuzembayev’s double victory in the first ARX awards, organized by the architectural magazine of the same name on November 10th last year, was hardly unexpected — it’s one more addition to his already long list of prizes and plaudits. Kuzembayev has already managed to achieve recognition not only from peers in official circles, despite a background that could have placed him on the margins of the profession, but also from fans of the avant-garde. He is widely regarded as the best hope of Russia’s architectural scene.

St. Pete Scene

  • January 01, 1970

Residential Price Freeze

  • January 01, 1970
Moscow’s epic residential boom has run out of steam after a year in which apartment prices grew at unprecedented levels, coming close to doubling in the space of a year, according to some estimates. Analysts are divided as to whether prices are merely stagnant or actually falling, but most on the market agree that prices have simply become too high for the vast majority of Muscovites. Real Estate Quarterly asked some of the city’s top analysts what is happening on the market, and whether stagnation is here to stay.

Elite Realty Overview

  • January 01, 1970
The market is still developing.” Recently this phrase has become one of the most widely employed when describing the state of the elite sector of the realty market. Many people view it as just a cliche that gets bandied about excessively and no more. And yet this really is the case and so it is entirely appropriate, I think, to start the first review of 2007 with this claim. Of course, it would be inaccurate to look at the past year through rose-tinted spectacles, since it had its difficult aspects and there were scattered unpleasant moments. But all the same, these were outweighed by the positive aspects.

Appointments

  • January 01, 1970

Editors' View

  • January 01, 1970
Welcome to the first issue of Real Estate Quarterly for 2007, which promises to be an eventful year for Russia.

News in Brief

  • January 01, 1970