Real estate experts and consultancy agencies are unanimous — despite the negative blow of the credit crunch, Russian commercial real estate has reaped excellent results over the last couple of years and, driven by confidence in the market and expanding investment possibilities, is expected to continue to grow.
Direct investment into Russian commercial real estate assets to the end of September 2008 reached $5.9 billion, increasing by 184 percent year-on-year, according to the latest survey by real estate service and management firm Jones Lang LaSalle. Meanwhile, the European market for the same period has seen a 10-15 percent fall, or $105 billion in direct investments in the first half of 2008, as against $171 billion a year earlier.
Thursday, December 25, 2008
Sunday, December 21, 2008
Forecast Says Real Estate Prices In Russia To Sink Next Year
MOSCOW -- The value of property is expected to fall in Russia in 2009, particularly in the capital, as the effects of the global financial crisis continue.
The Russian SberBank's Center for Macroeconomic Research has forecast that the biggest fall in real estate prices in Russian next year will be in Moscow, one of the world's most expensive cities.
RFE/RL's Russian Service reports that the situation in Russian regions and cities will vary.
By the fourth quarter of 2009, real estate prices in Russia are to go down by about 7 to 12 percent, while in Moscow a drop of 23 to 38 percent is forecast by SberBank.
Real estate that is for sale only in dollars will provide even better reductions for buyers since the ruble has weakened against the dollar, according to SberBank.
The Russian SberBank's Center for Macroeconomic Research has forecast that the biggest fall in real estate prices in Russian next year will be in Moscow, one of the world's most expensive cities.
RFE/RL's Russian Service reports that the situation in Russian regions and cities will vary.
By the fourth quarter of 2009, real estate prices in Russia are to go down by about 7 to 12 percent, while in Moscow a drop of 23 to 38 percent is forecast by SberBank.
Real estate that is for sale only in dollars will provide even better reductions for buyers since the ruble has weakened against the dollar, according to SberBank.
Wednesday, December 17, 2008
Property Prices Seen Down 60% Next Year
Konstantin Aprelyov, vice president of the Russian Realtors Guild, said that he expects property prices to be cut in half next year, and added that he thought prices in the regions would suffer more than those in the capital.
"After [the default crisis in] August 1998, property prices in Moscow fell by 32 percent," Aprelyov said. "But they dropped by much more in the regions, by 59 percent in Perm, for example."
Not all industry players agree, however, with the report's conclusions.
Andrei Pankovsky, deputy general director of developer DSK-1, said that it is unlikely that prices [in rubles] would fall even by one-third.
"After [the default crisis in] August 1998, property prices in Moscow fell by 32 percent," Aprelyov said. "But they dropped by much more in the regions, by 59 percent in Perm, for example."
Not all industry players agree, however, with the report's conclusions.
Andrei Pankovsky, deputy general director of developer DSK-1, said that it is unlikely that prices [in rubles] would fall even by one-third.
Friday, December 12, 2008
Russia TNK-BP to buy out Sibir petrol stations-paper
The deal is planned to be completed by Dec. 17, said one of the sources.
Henry Cameron, chief executive officer of the London-listed Sibir, confirmed the talks.
'The deal is being discussed, and the talks are on an advanced stage,' he told Vedomosti.
Vedomosti quoted an analyst as saying that Sibir might want to sell the filling stations to help its key owner, Russian businessman Shalva Chigirinsky to solve his problems relating to the financial crisis.
Sibir earlier this month outraged minority shareholders when it said it would buy real estate assets from Chigirinsky for $340 million in cash and debt.
Henry Cameron, chief executive officer of the London-listed Sibir, confirmed the talks.
'The deal is being discussed, and the talks are on an advanced stage,' he told Vedomosti.
Vedomosti quoted an analyst as saying that Sibir might want to sell the filling stations to help its key owner, Russian businessman Shalva Chigirinsky to solve his problems relating to the financial crisis.
Sibir earlier this month outraged minority shareholders when it said it would buy real estate assets from Chigirinsky for $340 million in cash and debt.
Wednesday, December 10, 2008
The global economic crisis has hit Russia with full force, and property prices, especially in Moscow
Shares of Russian companies have lost nearly three-quarters of their value in six months. The price of government bonds is down by almost a quarter. The ruble is sliding, losing 20% of its value against the U.S. dollar since August. The price of oil, Russia's chief export, has fallen by 70% since the summer. But for a long time, there was one asset in Russia—real estate—that somehow seemed capable of defying gravity.
Even as property market bubbles burst all over the world, the value of Russian real estate just seemed to go up and up. According to Moscow real estate agency IRN, residential property prices in Moscow did not peak until mid-October, rising by some 50% from a year earlier. With apartments in central Moscow selling for $6,000 per square meter ($557 a square foot), the city regularly tops lists of the world's most expensive cities. Elsewhere in Russia, too, property values have climbed dramatically over recent years.
Even as property market bubbles burst all over the world, the value of Russian real estate just seemed to go up and up. According to Moscow real estate agency IRN, residential property prices in Moscow did not peak until mid-October, rising by some 50% from a year earlier. With apartments in central Moscow selling for $6,000 per square meter ($557 a square foot), the city regularly tops lists of the world's most expensive cities. Elsewhere in Russia, too, property values have climbed dramatically over recent years.
Sunday, December 7, 2008
Property developers are putting projects in Moscow
"Today's vacancy rate of 8.5 percent in Moscow is expected to double next year, going over 15 percent. Take up of office space, will fall in half in 2009, hitting 1 million square meters, from 2 million today," said commercial real estate consultant James Brooke.
Until the financial crisis hit in the summer, major firms were increasing their office space, assuming they would need to expand their work force by 15-20 percent per year. Now they are looking to sublet this space as staff are being laid off and recruitment put on hold.
"As late as July the big companies over rented. Many people thought the economy would keep growing and pay rolls would keep expanding. In September/October they were stuck with hundreds of thousands of square feet of excess office space," Brooke added.
Until the financial crisis hit in the summer, major firms were increasing their office space, assuming they would need to expand their work force by 15-20 percent per year. Now they are looking to sublet this space as staff are being laid off and recruitment put on hold.
"As late as July the big companies over rented. Many people thought the economy would keep growing and pay rolls would keep expanding. In September/October they were stuck with hundreds of thousands of square feet of excess office space," Brooke added.
Friday, December 5, 2008
Moscow Launches Tender for First 95,000 Sq. m of Residential Properties
The Moscow authorities have announced a series of open tenders to buy the first 95,000 sq. m of the earlier an ...
Wednesday, December 3, 2008
Economic Woes Could Bring Cheaper Rooms
David Lang flies to Moscow from the southern Siberian city of Chelyabinsk about a dozen times a year to attend real estate conferences and meetings.
Although he has not cut back on trips, the financial crisis has forced Lang, head of the Zapadny Bereg real estate development firm, to cut short the number of days he stays in the city.
"If you're only going to have two days in Moscow, you have four meetings a day instead of two. The mantra now seems to be more business, less lunch," said Lang, a tall, jovial New Yorker with slicked-back hair and a small ponytail.
As the impact of the world financial crisis ripples through the country's industries, companies — both small businesses like Lang's as well as with major corporations — are slashing their travel budgets, forcing Moscow's hotels, which depend on business travelers, to tighten their belts as well. Some experts see a silver-lining, however, as hoteliers could be forced to consider providing travelers with more affordable alternatives.
Although he has not cut back on trips, the financial crisis has forced Lang, head of the Zapadny Bereg real estate development firm, to cut short the number of days he stays in the city.
"If you're only going to have two days in Moscow, you have four meetings a day instead of two. The mantra now seems to be more business, less lunch," said Lang, a tall, jovial New Yorker with slicked-back hair and a small ponytail.
As the impact of the world financial crisis ripples through the country's industries, companies — both small businesses like Lang's as well as with major corporations — are slashing their travel budgets, forcing Moscow's hotels, which depend on business travelers, to tighten their belts as well. Some experts see a silver-lining, however, as hoteliers could be forced to consider providing travelers with more affordable alternatives.
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