Real Estate News
Moscow continues to annul development contracts
Moscow authorities will continue to annul construction and development contracts that were approved by the previous government on unfavorable conditions for the city, mayor Sergei Sobyanin was quoted as saying by RIA Novosti. “Currently, we are in the process of major revision of land, property and development contracts [signed] over the last few years,” Sobyanin said, adding that development contracts in Moscow, which are currently in force, cover 40 million sq. meters of property.
“This is a [huge] amount that requires serious and attentive consideration by authorities and in many cases by courts,” he went on to say.
Earlier, Sobyanin reorganized the city government’s construction complex in a bid to optimize its operation. Among steps taken by the city’s new authorities were the introduction of a ban on new construction in the centre of Moscow and the cancellation of development contracts that would create obstacles to traffic. At the same time, investors in construction projects were promised more favorable conditions.
Federal residential construction program stumbles
The federal program Zhilyo (Residential Property), aimed at improving the housing situation in the country, considerably lagged behind planned figures in 2010, Vedomosti reported. Only 259 out of 727 buildings that were supposed to be constructed within the framework of the program, were completed. The program was originally launched in 2006 for a three-year period and then extended to 2015. According to data from the Ministry of Regional Development, by 2015, the annual residential construction in the country is to increase to 90 million sq. meters. 621 billion roubles is to be spent on the program from the federal and regional budgets, while another 219 billion roubles is to be provided by the population and by banks in the form of loans.
Moscow’s offices more expensive than in Paris and Singapore
The international consulting company Knight Frank has ranked Moscow as the world’s fourth most expensive city in terms of premium-class office rent. The average rate of 754.5 Euros per sq. meter per year in a top-class office centre put Moscow in front of Paris (750 Euros), Singapore (715 Euros) and London’s City (690 Euros). London’s West End (1,067.9 Euros) and Tokyo (1,051.4 Euros) topped the ranking.
Opinions differ on construction ban in central Moscow
Players in the Moscow real estate market have differed on the subject of the recent ban on new construction in the centre of Moscow, RIA Novosti reported. The decision to ban all construction in the historical centre of the capital was triggered by the recent demolition of a historical building on Bolshaya Yakimanka, which was permitted by previous mayor Yuri Luzhkov’s government.
“As a Muscovite, I support the initiative aimed at preserving the city and consider [the situation] when buildings that were not in line with the surrounding were erected in central Moscow, to be wrong,” said Alexei Kuchvalsky, head of the department for services to office space owners at Jones Lang LaSalle.
But some developers were less than happy about the Moscow government’s decision. “The city certainly has a need to preserve architectural monuments but the revision of the procedure for treating buildings that don’t have any historical or cultural value will only stimulate corruption and infringe on the rights of investors,” said a spokesperson for the development company Capital Group.