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.
