The once-red-hot real-estate sector has become one of the first major areas of Russia's economy to feel the chill of the global financial crisis, executives say. Banks have stopped lending, prompting developers to shelve new projects and ditch plans to list on domestic and international markets.
Developers and analysts say they expect intense industry consolidation in the months ahead, along with a fall in prices from what have been dizzying heights. Moscow real-estate prices have jumped nearly 30% this year, with average residential prices hovering at just below $5,000 a square meter, after tripling in the past three years.
Saturday, September 20, 2008
Wednesday, September 10, 2008
Developers Relying on Russian Banks
The ongoing global credit crunch has caused headaches for local developers, who have seen affordable financing from international lenders drying up, but Russian banks are increasingly stepping into the breach.
"International banks are not giving any money now," said Alexei Yazykov, a real estate analyst at Renaissance Capital. "Russian developers have been relying on Russian banks more heavily. … Credit from Russian banks actually increased last year."
The country's construction industry grew at a rate of more than 16 percent in 2007, accounting for over 5 percent of gross domestic product, but as international lenders tighten up, developers have seen interest rates increase to 15 to 18 percent.
"International banks are not giving any money now," said Alexei Yazykov, a real estate analyst at Renaissance Capital. "Russian developers have been relying on Russian banks more heavily. … Credit from Russian banks actually increased last year."
The country's construction industry grew at a rate of more than 16 percent in 2007, accounting for over 5 percent of gross domestic product, but as international lenders tighten up, developers have seen interest rates increase to 15 to 18 percent.
Tuesday, September 2, 2008
CNL Commercial acquires St. Petersburg office tower for $26.3M
CNL Commercial, a division of Orlando-based CNL Financial Group Inc., bought the Wachovia Plaza, a 185,674-square-foot Class A office tower, from Parkway Properties Inc. The office tower is 98 percent leased and is adjacent to BayWalk, an open-air entertainment complex with an IMAX Muvico Theater, shops and restaurants, according to a news release.
"This property is a significant addition to our portfolio and furthers our strategy of acquiring well located assets in great growth markets," said Paul Ellis, president of CNL Commercial Real Estate, in a prepared statement.
This is CNL Commercial's third commercial acquisition in the past nine months. The firm now has assets of more than $300 million and more than 1.2 million square feet under management, the release said.
"This property is a significant addition to our portfolio and furthers our strategy of acquiring well located assets in great growth markets," said Paul Ellis, president of CNL Commercial Real Estate, in a prepared statement.
This is CNL Commercial's third commercial acquisition in the past nine months. The firm now has assets of more than $300 million and more than 1.2 million square feet under management, the release said.
Thursday, August 28, 2008
AFI Development H1 net profit doubles to $97.3 mln
Profit before tax increased 67 percent year-on-year to $110.0 million, the company said in a statement.
AFI Development is 71 percent-owned by Israeli conglomerate Africa-Israel and focuses on prime office, retail and mixed-use real estate developments in Russia.
AFI Development is 71 percent-owned by Israeli conglomerate Africa-Israel
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