Real Estate News
Sale of abandoned buildings could rake in up to $800 mln
The Moscow government has discovered 179 unoccupied buildings within the limits of the Garden Ring that are supposed to be under renovation, but no works are actually in progress, the business daily Vedomosti reported. Among them, 21 buildings have the status of architectural monuments. 120 buildings are owned by the city, nine more by the federal government, and the rest are in private hands. Meanwhile, City Hall was unable to find out who the owners of some of the buildings are. Even though investment contracts for the renovation of most buildings are in place, the city government technically has the right to annul them if no renovation works have been started, and a number of contracts are currently being revised. Among the buildings in question are those located in Pyatnitskaya Street, Dayev Lane, Taganskaya Street and even on Sofiyaskaya and Bolotnaya Embankments, which belong to the so called “golden island.” Vedomosti quoted a source in the development business as saying that it is very difficult to obtain all applicable permissions for construction/renovation works in the heart of Moscow, which may be a reason why lucrative property isn’t in use. Konstantin Kovalyov, managing partner at Blackwood, told Vedomosti that the sale of 120 buildings owned by the city could rake in $720 million to $800 million.
Average Moscow apartment sells at 8.1 million roubles
An average budget for the purchase of an apartment in Moscow’s secondary market is 8.1 million roubles, while about one half of all deals have a value under 8 million roubles, according to a report by the realtor Inkom-Nedvizhimost. “In the past, buyers were ready to pay more to become owners of extra square meters, but now the main criterion is modesty,” reads the report. The realtor’s experts said that 8 million roubles could buy a decent two- or three- room apartment with an area of around 60 sq. meters in a block building located in one of Moscow’s residential neighbourhoods. “In June, the average price of residential property in the secondary market was 196,500 roubles, per sq. meter, which is a 0.5% decline from the previous month,” reads the report.
Moving state agencies to Moscow region could improve traffic situation
The transfer of state agencies from the city to the Moscow region could help improve the traffic situation in the capital, Valery Aksakov, Moscow region duma speaker, was quoted as saying by RIA Novosti wire service. The idea of expanding Moscow’s limits into the region and creating a “capital federal district”, as earlier voiced by President Dmitry Medvedev, implies that a large number of state institutions should be moved beyond current city limits. “I think it would be right to move state agencies out of Moscow,” Aksakov said. “That would help to resolve the issue of traffic jams.” He added that good quality roads and junctions are other factors that could have a positive impact on the traffic situation.
Foreign investors return to office property market
The main trend in the Moscow office property market in the first half of the year was the return of foreign investors, said experts at Penny Lane Realty. “The return of foreign investors testifies to the improvement of the business climate in the country,” commented Maxim Zhulikov, the company’s development director of the office property department. “But the office property market will return to pre-crisis figures only by 2012 or 2013. A number of political, economic and administrative factors have an impact on the increase in market activity. The upcoming parliamentary and presidential elections are to determine the vector of the overall economic development, and Moscow authorities’ prohibitive policies are likely to deter the development of the office market for a long time.”