Foundations For Recovery. RBCC Conference on Real Estate
Moscow 2nd March 2010
RBCC held an interesting conference at the beginning of March. Ostensibly about the foundations of recovery, Olga Archangelskaya, partner and head of real estate advisory services Russia and the CIS of Ernst & Young, who chaired the section called ‘The Real Estate Market in 2010’, mentioned that at last real estate professionals have started talking to each other, after a long break. She mentioned that there are three elements necessary for successful real estate development: demand, developers and investors. “I am an optimist” she explained as she saw signs that these three elements are beginning to appear again in the Russian market.
Her introduction was followed by Natalia Stenina, Lawyer, Pepeliaev Group who gave a very interesting lecture on tightening legal usage on demolition of unauthorized buildings. Under the draft court practice digest on unauthorized buildings considered by the Supreme Arbitrazh Court on 16th July 2010, a number of major issues relating to unauthorized construction regulations are to be resolved (demolition and acknowledgement of ownership title to unauthorized construction).
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Igor Indriksons, Director
of International Investments Department,
IntermarkSavills
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Natalia Stenina,
Lawyer, Pepeliaev Group
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The draft proposals, which will probably be finally approved in the near future, will most likely be accepted by Russian courts. Some of the main issues being considered are: who exactly will be able to file a lawsuit requesting demolition of unauthorized constructions (the owner of the plot of land or, in addition to that, the public prosecutor, the construction supervisory authority and any other interested party)? Courts may also be entitled to impose a duty on the legal successor of the company that erected an unauthorized building to remove it, and this applies to the purchaser of such a building, including unfinished buildings. The draft court practice, if approved, promises to clear up a lot of grey areas in the aspect of the law.
Igor Indriksons, Director of International Investments Department, IntermarkSavills, followed with a talk entitled: If not Moscow, then where? Investment prospects in the regions and property investment abroad.
Igor gave participants a whistle-stop tour of current real estate markets, something that was interesting and relevant for some participants in the conference who perhaps had got their fingers burned in the Moscow market recently and were looking elsewhere. Igor made the point several times that the most important thing in real estate is liquidity, “you can pick up a great house in Bulgaria right now very cheaply, but how are you going to sell it?” Among the countries that Igor highlighted as places where extreme caution should be applied are: Egypt, Bulgaria, Dubai, Russia, Tunisa . Among those countries with “good perspectives” were the UK (particularly London), Austria, Switzerland, France, and others. He painted a rather pessimistic but realistic picture in that the investment attractiveness of Russian real estate is under question as similar if not higher yields can be achieved in more stable countries where risk is considerably less.
In all, this RBCC covered a range of topics not usually approached at such events, therefore it was a success.
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