| 14 April 2008 |
 
|
Investors Recalculate Risks, Placing Bets on Russian Real Estate.
The Russian real estate market showed a strong upward trend compared to the global market, which has experienced a correction related to the liquidity crisis that began in the spring of 2007. Over the past year, foreign investors have recalculated their risks, having bet on further growth in the real estate sector in Russia.
This conclusion was reached by participants in a round table discussion entitled "Investments in the Russian Real Estate Sector in Conditions of Correction of the Global Markets." It was organized by the global real estate consultancy Knight Frank, and took place on April 10 at the Ritz Carlton Hotel.
“The crisis has undoubtedly affected the residential real estate market all over the world. However, the average price of premium facilities continued to grow. During this period, several trends have become apparent: the rate of price growth for exclusive facilities is significantly higher than the same indicator on the elite market as a whole. On top of that, there are certain cities or territories in which real estate prices and demand remain unaffected by external factors. Such cities are Moscow, Monaco, Marrakech, London and others," says Yekaterina Thain, managing partner of Knight Frank Russia and CIS.
It turns out that Russia-based commercial real estate offers equally interesting opportunities for investors. The highest revenues are reported by the warehousing sector (9.5%). At the same time, in 2007, the sharpest growth of rental rates was registered in the Class A office segment (here the growth exceeded 40%). "One detects a tendency related to the formation of a secondary investment market. This results from the resale of previously purchased facilities," said Evgeny Semyonov, Director of Capital Markets at Knight Frank Russia and CIS.
Even the most conservative foundations, which have come to the Russian market only recently, have shown interest in Moscow-based and regional real estate assets. During the past period, the percentage of foreign market players investing in the Russian real estate sector has grown dramatically.
Knight Frank specialists think that the recalculation of investment risks largely results from the situation on the global financial markets. The company has published a research report that analyzes the global real estate indices applicable to various countries. Russia earned a top score in terms of revenue and growth of both commercial and residential real estate prices.
|
