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. Last Updated: 07/27/2016

Capital Plans to Curb Office Projects

City Hall is putting together an order that would ban office construction within the Garden Ring.

Few details of the plan have been revealed, but a newspaper reported that the city government met this month to begin hammering out a measure preventing new construction of administrative and office buildings in central Moscow.

A City Hall official confirmed that such plans are under way but declined to give further details.

Real estate experts said the move is part of a City Hall effort to develop other parts of Moscow such as the ambitious billion-dollar Moskva-City business district. Mayor Yury Luzhkov also is concerned about preserving the town's historic beauty, they said.

City plans to limit high-rise development within the Garden Ring f the older, historical part of town f is nothing new, said Timothy Fenwick, a partner at Jones Lang Wootton.

"It is not a surprise in the profession," he said. "These plans have been talked about for about two years now."

Moscow has already been limiting the size as well as style and material of new buildings in the center of town so as to fit into the architectural complex of the old city, Fenwick said. Buildings cannot be constructed higher than seven stories, he said.

Therefore, the decision to stop office development would be "confirming the trend, rather than being a revolutionary move," he said.

Gerald Gaige, head of real estate consulting for Arthur Andersen in Russia, said Moscow fears too many office projects would damage the city's skyline and its historical nature and appearance.

"It is a unique city in the world in this regard and deserves preservation and special consideration," he said.

The areas within the Garden Ring that have already been designated for office construction will be completed, real estate experts said.

Some 20 office buildings are currently under construction in the central part of the city, ranging in size from 15,000 square meters to 1,000 square meters, Fenwick said.

Moskovsky Komsomolets reported that plans to construct 800 square meters of office space will be converted into blueprints for residential houses.

To encourage developers to focus on the development of the city by preventing them from building downtown would be both logical and good town-planning f similar to schemes used by London and Paris, Fenwick said.

He added that developers probably would not be upset by such a ban as long as it would not limit competition.

Experts said the district the capital is particularly interested in developing is Moskva-City, one of the mayor's pet projects. With the financial crisis casting a shadow on its estimated price tag of $5 billion to $8 billion, the city is concerned about the project's future, analysts said.

City Hall went so far as to take the unprecedented step this month of announcing plans to sell land at the site for Russian companies to develop.

"[Moskva-City] is getting pushed forward, to the front burner," Gaige said.

Pushing development of one area, such as Moskva-City, could also benefit the city, he added. Such concentration would increase the value of the area through taxes and revenues from leases and land sales.