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. Last Updated: 07/27/2016

New Behemoths Rising Along Moscow River

Moscow's real estate market may soon see the birth of two behemoths -- one north and one south -- that could usher in a new era of massive, multi-use sites with retail, residential and office space.

But whether the logistics of financing and construction allow these projects to come to completion or stagnate as paper tigers that never leave the drawing board remains to be seen.

First out of the gate was Riverside Towers, a double-headed edifice along the Moscow River south of the city, which is going up with the speed characteristic of its builder, the Turkish firm Enka.

Upon completion, the first phase will bring onto the market 18,000 square meters of office space. While current construction is no larger than the space offered by a few other Moscow sites, developers promise other phases that will include a 300-room hotel, a retail mall, theater, fitness facilities, an entertainment complex and parking above and below ground.

Moscow's second such project is called Embankment Place, designed as the first stage of the future Moscow International Business Center, a proposed Western-standard business district also along the river, but in the north, on the Krasnopresnenskaya Embankment.

Embankment Place is to be built by the Capital City joint venture, which includes Canadian developer Albert Reichmann. It will consist of two 22-story buildings -- one with 20,000 square meters of apartments, and one with 30,000 square meters of office space -- and 5,000 square meters of retail space.

A second phase would include a hotel, various nightclubs and a medical center, according to Capital City Developments external relations officer Tatyana Kosheleva. Additional phases are still being designed.

But while ground has been broken on both projects, both are phasing their developments, hoping to acquire the necessary capital from the first stages to build the second.

Enka, which made its name in Moscow through a joint partnership with the city, called Mosenka, has proven its ability to get a job done on time, and indeed its Riverside Towers is growing at a rapid pace.

"I think Enka is just a well-oiled machine," said one realtor, who asked not to be identified. "Real estate is a relationship business, and they've got the relationship."

The Reichmann project, on the other hand, faces the same dilemma posed to any other Moscow developer. Despite its brand-name recognition, it must live up to the tenant's motto: Show me, don't tell me."London's a very different place compared to Moscow," said another real-estate agent, referring to the Reichmann Brothers' famed Canary Wharf project in Britain which, although afflicted by a contraction in the market, was built to the highest standards.

"Everybody knows about the Reichmann standards and capabilities, but credibility in this market is really only won by physically doing something on the ground," the realtor said. "And they've got to do something on the ground."

Groundbreaking was Dec. 1, with some predicting that winter weather will prevent any major groundwork until March.

Although both projects are targeting the same style of development, opinions vary as to just how much competition plays into the game, with some realtors noting that each will hunt for the same type of client.

However, Oleg Myshkin disagrees.

"The difference between Riverside Towers and Embankment Place, quite simply, is ... we have full financing for phase one," said the agent with HIB Ltd., exclusive brokers for Riverside.

He added that Riverside will be completed on time in April, while Embankment is not scheduled for completion until late 1997.

Capital City Development's Kosheleva said Embankment Place was indeed behind Enka's construction deadlines and is just now signing the final financing documents for the project. But she insisted that, in the long run, quality will win the day.

"It's a competitive atmosphere in terms of our potential tenants," Kosheleva said. "At this moment they're so needy, they're signing up with whatever's in Moscow, and the Riverside Towers is developing quickly.

"However, we think the standard of our buildings is much higher. It's definitely A-class standard."