Real Estate News
City Hall cancels controversial project
The Moscow government’s commission for urban development and land, headed by mayor Sergei Sobyanin, has made the decision to cancel a large-scale development project on the territory of the capital’s oldest tram depot, Apakov, on Shabolovka street. According to a report published by the business newspaper RBK Daily, City Hall will revoke a development contract earlier signed with the company Stolitsa Group, which, some industry insiders say, has ties to a son of former mayor Yuri Luzhkov. Under the contract signed back in 2004, the 1909 tram depot, which has the status of an architectural monument, was to be transferred to another location to provide a site for a 190,000 sq m multipurpose complex. The development of the project was hampered by the 2008 economic downturn and protests from architecture preservationists. Stolitsa Group allegedly paid to the city just over $8 million for the right to develop the site, compared with its current market value of between $60 million and $80 million.
Dollar prices for elite property decline
Prices for elite residential property in Moscow declined in August for the first time in 15 months, the real estate company Chesterton said in a press release. The decline amounted to between 1.5% and 3.5%, depending on the segment. The average price for elite residential property in Moscow is $20,700 per sq m, the company said, adding that in spite of the August decline, prices for that type of property have climbed 10% since the beginning of the year. The decline in the “future prime” segment was 3.4%, to $13,500 per sq meter, in “pure prime” to 2.5% and in “super prime” to 1.1%.
Hotel instead of City Hall complex
The site in the Moskva City business compound, on which a complex of buildings for the city government was supposed to be built, will be used for a construction of a hotel, RIA Novosti reported. “The city authorities have decided to cancel the project and auction off the land,” Timur Zeldich, a senior property official at City Hall was quoted as saying. Before the economic meltdown, the Moscow government planned to build an 806,000 sq m complex on the site, but then the project was suspended indefinitely. Now City Hall says it is ready to sell the 1.3 hectare plot of land to a developer that would build a 315,000 sq m complex featuring a hotel for 1,300 rooms and an apart-hotel for 300 apartments. The starting price is to be 7.08 billion roubles.
Demand for rental apartments up
Demand for rental apartments went up 34% in August compared with the previous month, Miel Arenda said in an analytical report, stressing that in the lowest price category supply has been lagging substantially behind demand. According to report, apartments rented at between $1,000 and $3,000 a month account for 73% of all properties in the market, those with a price tag between $750 and $1,000 account for 18.5%. It is nearly impossible to find an apartment for less than $750. Meanwhile, one-room apartments remain the most wanted category, and the number of properties of that kind in the market corresponds to just one third of demand. The average rent in the economy class segment is 29,000 roubles per month for oneroom apartments, 36,700 roubles for tworoom apartments and 41,800 roubles for three-room apartments.