Russia was riding high on the commodity boom, but now with commodity prices down considerably from their highs, Russia's real estate market is struggling. Not only is the real estate market on the decline, but so too is the country. Some analysts even think that Russia no longer deserves to be considered an emerging power. For more on recent developments in the Russian real estate market, read the following article from Global Property Guide.
For much of 2008, Russia’s housing market has seemed insulated from the global financial meltdown. However, the situation turned nasty during the last quarter of 2008. Property prices fell, transactions and sales plummeted, projects were canceled or shelved, and what limited mortgage lending there was available dried up.
At the end of H1-2008, the average price of re-sale flats in Moscow was US$24,840, up almost 30 percent from a year earlier, according to Knight Frank. On the other hand, the average price of newly-built flats was US$21,862, up 23.7 percent from a year earlier.
Tuesday, March 31, 2009
Sunday, March 29, 2009
Carrefour Store to Hire 450 Workers
French hypermarket chain Carrefour said Thursday that it planned to recruit about 450 employees for its first Russian store.
Real estate sources said Wednesday that Carrefour would occupy 14,300 square meters of space on two floors of a newly built Moscow mall that is set to open in May.
Carrefour, the world's second-biggest retailer after Wal-Mart, said in a statement that the hypermarket would open doors for customers this summer.
"Our company plans to develop actively on the Russian market," Irene Savitskaya, head of Carrefour human resources in Russia, said in the statement.
According to banking sources, the French chain is also considering buying Moscow grocery chain Sedmoi Kontinent, which has dozens of stores throughout the city.
Real estate sources said Wednesday that Carrefour would occupy 14,300 square meters of space on two floors of a newly built Moscow mall that is set to open in May.
Carrefour, the world's second-biggest retailer after Wal-Mart, said in a statement that the hypermarket would open doors for customers this summer.
"Our company plans to develop actively on the Russian market," Irene Savitskaya, head of Carrefour human resources in Russia, said in the statement.
According to banking sources, the French chain is also considering buying Moscow grocery chain Sedmoi Kontinent, which has dozens of stores throughout the city.
Wednesday, March 25, 2009
Russia’s real estate giant acquires the assets of bankrupt IIG
Together with the management board of IIG, Delin will send a new player in the marketplace, Ulogis. The newcomer is ready to storm the industrial and logistic segments, keeping focus on European market for start.
Ulogis aims at becoming a major player in the local real estate environment, focusing on: management and enlargement of IIG’s portfolio, tailor-made industrial and logistics real estate constructions and speculative acquisitions. Ulogis has 29 real estate projects under management.
After IIG filed for bankruptcy, Delin submitted a takeover bid for its assets that include a portfolio of 800,000 sqm as well as IIG’s management team. Thus, Filip Schelfhout, chief executive officer of IIG will take up the same position in the newly-formed Ulogis.
Ulogis aims at becoming a major player in the local real estate environment, focusing on: management and enlargement of IIG’s portfolio, tailor-made industrial and logistics real estate constructions and speculative acquisitions. Ulogis has 29 real estate projects under management.
After IIG filed for bankruptcy, Delin submitted a takeover bid for its assets that include a portfolio of 800,000 sqm as well as IIG’s management team. Thus, Filip Schelfhout, chief executive officer of IIG will take up the same position in the newly-formed Ulogis.
Monday, March 23, 2009
Russian-Language Real Estate Guide Published
The first Russian-language guide to buying real estate in Finland has been published. It is hoped that the guide will help buyers avoid misunderstandings about ownership rights.
Also, of late, more such real estate deals have been opposed by local residents.
The motive for the guide, jointly published by the local authorities of South Savo, South Karelia and Kymenlaakso, is to be found in the practical difficulties some real estate purchases by Russians have caused.
For many, building regulations are unfamiliar and building codes have been violated, for example by failing to get construction permits, building oversized docks, and putting up unauthorized fences. Some of these have even led to court cases.
Also, of late, more such real estate deals have been opposed by local residents.
The motive for the guide, jointly published by the local authorities of South Savo, South Karelia and Kymenlaakso, is to be found in the practical difficulties some real estate purchases by Russians have caused.
For many, building regulations are unfamiliar and building codes have been violated, for example by failing to get construction permits, building oversized docks, and putting up unauthorized fences. Some of these have even led to court cases.
Saturday, March 21, 2009
Disbarred St. Petersburg attorney skips out on his own trial
LARGO — Martin “Kirby” Watson was in deep trouble to begin with. The disbarred attorney faces prison if convicted of bilking clients out of $500,000.
But this morning, authorities say, he made a mistake that no one who went to law school should ever make:
He skipped out on his own criminal trial.
Instead of picking a jury, Pinellas-Pasco Circuit Judge Christine Hellinger revoked Martin’s $70,000 bond and issued a warrant for his arrest.
Attorney Charles Gerdes represents one of the families reportedly victimized. Will his clients ever get their money back now that the defendant has disappeared?
But this morning, authorities say, he made a mistake that no one who went to law school should ever make:
He skipped out on his own criminal trial.
Instead of picking a jury, Pinellas-Pasco Circuit Judge Christine Hellinger revoked Martin’s $70,000 bond and issued a warrant for his arrest.
Attorney Charles Gerdes represents one of the families reportedly victimized. Will his clients ever get their money back now that the defendant has disappeared?
Tuesday, March 17, 2009
Moscow's devastated real estate
Last year, Khaldei, who co-owns the Russian developer with Israeli billionaire and diamond dealer Lev Leviev, was sitting on a portfolio of some of Moscow's most prestigious projects, which were valued at nearly $6 billion.
Now, he has scaled back his development projects from 34 to concentrate on three flagship central Moscow ventures that make up the lion's share of his portfolio, which was valued by consultants from Jones Lang LaSalle at $2 billion at the end of 2008.
The Moscow property market has seized up as the businesses that occupy the city's sleek new Class A office space slash their staff and some companies pack up altogether, filling the business newspapers with sale and bankruptcy notices.
Now, he has scaled back his development projects from 34 to concentrate on three flagship central Moscow ventures that make up the lion's share of his portfolio, which was valued by consultants from Jones Lang LaSalle at $2 billion at the end of 2008.
The Moscow property market has seized up as the businesses that occupy the city's sleek new Class A office space slash their staff and some companies pack up altogether, filling the business newspapers with sale and bankruptcy notices.
Friday, March 13, 2009
Forbes Finds 55 New Russian Ex-Billionaires
The majority of Russia's billionaires couldn't cope with the financial crisis, which wiped 55 names from the country's tally in the 2009 Forbes rich list. Of the 32 who managed to defend their spots on the list, all lost money -- as did 87 percent of the world's tycoons.
The collective pocketbook of the world's billionaires ended the troubled year an astronomical $2 trillion lighter, falling to $2.4 trillion. The new list contains 793 billionaires -- 332 fewer than in 2008 -- putting the Russian casualties at almost 17 percent of the global total.
The competition for first place turned into a race for survival: Microsoft founder Bill Gates recaptured the title, with losses of "just" $18 billion for a net worth of $40 billion. Gates looks unscathed compared to Warren Buffett, whose fortune shed $25 billion to take second place at $37 billion, following the worst year ever for his Berkshire Hathaway.
Despite everything, 44 people managed not only to hang on to their wealth but to increase it. One of the best bets was on consumers looking to save money: Nine of the world's 20 richest people own discount stores.
The collective pocketbook of the world's billionaires ended the troubled year an astronomical $2 trillion lighter, falling to $2.4 trillion. The new list contains 793 billionaires -- 332 fewer than in 2008 -- putting the Russian casualties at almost 17 percent of the global total.
The competition for first place turned into a race for survival: Microsoft founder Bill Gates recaptured the title, with losses of "just" $18 billion for a net worth of $40 billion. Gates looks unscathed compared to Warren Buffett, whose fortune shed $25 billion to take second place at $37 billion, following the worst year ever for his Berkshire Hathaway.
Despite everything, 44 people managed not only to hang on to their wealth but to increase it. One of the best bets was on consumers looking to save money: Nine of the world's 20 richest people own discount stores.
Wednesday, March 4, 2009
Russia investors launch distressed real estate funds
As Russia's property firms struggle to meet debt repayments, veteran Russian investors are sizing up their portfolios and getting ready to commit scarce cash to new distressed real estate funds.
Four Moscow-based investment managers interviewed by Reuters said they were lining up $1.1 billion in total to pick off high end real estate as Moscow's devastated white-collar businesses seek more modest rents and developers fail to refinance debt.
"Everybody else has lost faith in Russia, but I was here through the last crisis. And if we get in at this point of the market, it is perfect timing. Absolutely perfect," said Holger Mueller, managing director of real estate at UFG Asset Management.
UFG raised $148 million for its second real estate fund, attracted by the opportunities in distressed assets, in June and is planning a second closing in March.
Four Moscow-based investment managers interviewed by Reuters said they were lining up $1.1 billion in total to pick off high end real estate as Moscow's devastated white-collar businesses seek more modest rents and developers fail to refinance debt.
"Everybody else has lost faith in Russia, but I was here through the last crisis. And if we get in at this point of the market, it is perfect timing. Absolutely perfect," said Holger Mueller, managing director of real estate at UFG Asset Management.
UFG raised $148 million for its second real estate fund, attracted by the opportunities in distressed assets, in June and is planning a second closing in March.
Monday, March 2, 2009
A floor under Moscow property
Russian tenants locked into super-high rental agreements are desperately trying to wriggle out of their commitments as all around them prices tumble. Happily, the Russian civil code comes with a convenient loophole: clauses 450/451 say: "unusual disruption to the economic situation can make contracts re-negotiable."
Since the start of the year, tenants have been arguing with their landlords that this clause applies to the current crisis. It is not yet clear if they can make this legal dodge stick, but if they can, then developers will be forced to accept falling income from not only unsold space, but also lose those juicy contracts they signed during the boom times of only a few months ago.
The worldwide trend for property in all sectors, residential, office, retail and industrial is down. But are the prospects for Russia, and particularly Moscow, as bleak for the rest of the year? The short answer is yes.
Since the start of the year, tenants have been arguing with their landlords that this clause applies to the current crisis. It is not yet clear if they can make this legal dodge stick, but if they can, then developers will be forced to accept falling income from not only unsold space, but also lose those juicy contracts they signed during the boom times of only a few months ago.
The worldwide trend for property in all sectors, residential, office, retail and industrial is down. But are the prospects for Russia, and particularly Moscow, as bleak for the rest of the year? The short answer is yes.
Sunday, March 1, 2009
Azerbaijan to issue first certificates to residential real estate appraisers
Baku, Fineko/abc.az. The Society of Appraisers of Azerbaijan (AQC) is beginning the process of certification of residential real estate appraisers, backed by IFC Primary Mortgage Development Project in Azerbaijan and Central Asia.
At today’s Baku-Moscow teleconference Igor Artemenkov, first vice president of Russian Society of Appraisers, drawn as expert, said that preparatory seminar for certificate candidates would be held in Baku on 9 and 10 March.
“The written exam will be conducted on 11 March at 10 am – 4 pm and oral interview with the successful examinees on 12 March at 10 am – 3 pm. Besides, first certificates signed by AQC reps will be given on 12 March as well,” Artemenkov said.
At today’s Baku-Moscow teleconference Igor Artemenkov, first vice president of Russian Society of Appraisers, drawn as expert, said that preparatory seminar for certificate candidates would be held in Baku on 9 and 10 March.
“The written exam will be conducted on 11 March at 10 am – 4 pm and oral interview with the successful examinees on 12 March at 10 am – 3 pm. Besides, first certificates signed by AQC reps will be given on 12 March as well,” Artemenkov said.
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