Russian government to encourage renting, but experts are skeptical
The Russian government plans to annually allocate 5 billion roubles for the creation of a mass rental property market. According to the ministry of regional development, the construction of residential buildings specifically for renting out apartments in them may take off on a mass scale already in 2012, with some pilot projects currently under way in Kaluga and Novosibirsk regions. However, experts are skeptical about the idea, saying that Russians would prefer buying apartments with mortgage loans to renting them for their entire lives. The rental model will never be able to compete with the mortgage model on the Russian real estate market, Mikhail Semyonov, general director of Renova Stroi-Group was quoted as saying by RIA Novosti. “When a person buys an apartment with a mortgage loan, they create stock capital,” he said. “That person then becomes the owner of an asset whose price could go up.”
New project at Moskva-City
City Hall has found a buyer for a 2 hectare plot of land in the Moscow City commercial center, which had been lying idle for a few years, the business daily Vedomosti reported. Grand-Titul, owned by God Nisanov, a co-owner of the hotel Ukraina and the shopping center Yevropeysky, intends to build a 315,000 sq. metre multifunctional complex, featuring offices, a hotel, apartments and a trade and exhibition centre. The report quoted Nisanov’s spokesperson as saying that the company plans to invest $500 million in the project, which is to be completed in 2013. Previously, there were plans to erect four 70-storey buildings with a total area of 806,400 sq. metres on the plot. The underground part of the project was completed in 2008, after which it was suspended.
Economy-class lofts to arrive in Moscow
Buyers looking to buy economy-class lofts could soon be able to find something suitable for their budgets, as cheaper lofts are to be brought to the market at between $3,500 and $5,000 per sq. metre. Alexander Poduskov, sales director at KR Properties, was quoted by RIA Novosti as saying that his company, which is currently converting the weaving mill Danilovskaya Manufaktura and the silk mill Krasnaya Roza for non-industrial uses, plans to offer economy-class lofts. Still, he added that lofts will remain an expensive housing option, and stylizing a regular apartment to look like a loft would certainly be cheaper than buying one.
Developer flee to Moscow region
Restrictions on construction within city limits, introduced by the new Moscow government, have made some developers move their operations to the region, the business daily Kommersant reported. The developer Tekta Group is already launching three residential construction projects with a total area of 500,000 sq. metres, while several other developers, including MR Group, MITs, FSK Leader and the founders of PIK, Kirill Pisarev and Yuri Zhukov, acquired plots beyond the Moscow Ring Road in 2011. MITs’s chairman of the board, Andrei Ryabinsky, was quoted as saying that the city is overloaded with construction, while in the Moscow region, there are many unoccupied plots and the procedure of obtaining required permissions and approvals is less complicated. In October 2011, MITs spent $119 million on a 34.5 hectare plot near Govorovo. Until 2008, the volume of newly built construction in the city was higher than that in the region, but then the dynamic began to change. In the first 10 month of 2011, 3.45 million sq. metres of residential property were built in the region, against 1.2 million sq. metres in the city.