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#23 (129) 01-15.12.2009

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The Moscow hotel market has suffered most among all the large European cities. First evidence of this is huge drops in room prices. However, the reality is that the capital market was significantly overheated – until May 2008, with prices of accommodation services overinflated, like in no other European capital.
The commercial real estate market has significantly changed since the last year. The crisis forces developers to revise old strategies and quickly work out new tactics. What are the measures for warehouse real estate market players to undertake in order to stay competitive?
Is it possible to predict and prevent a loss in the value of commercial properties? Physical wear and tear and functional obsolescence that occurs over time decrease the market value of properties, even when properly maintained. External factors may decrease the market value of the property, but may indeed increase it. Professional appraisal informs the owner on possible future loss in market value caused by all types of wear.
Not so long ago banks were preoccupied with the problem of managing development assets that came to the market like a bolt from the blue. Now they are property owners with a bunch of unfinished developer projects. On one hand, they are trying to solve this problem. On the other hand, many independent real estate asset management companies have entered the market. Now the question is: should the banks transfer their non-core assets to professional property managers?
It has been a frequent practice that real estate assets are contributed towards the charter capital of businesses, because this allows a founding shareholder to pass on to a subsidiary a high value asset without paying VAT, among other things. Capital contributions comprised of uncompleted constructions have been historically a subject of debate both among scholars and legal practitioners.
The retail leasing market today seems to be the most successful segment. After all, people always need something to eat and wear. It is simply that demand, which according to the famous Maslow pyramid in the boom was shifting from consumer goods to more durable and luxury goods, and from cheap mass-produced goods to brand names, today is shifting back to cheaper goods once again. In fact, research shows that many consumers are purchasing goods in larger packages now, something like "bulk" shopping – thinking that they somehow will save money this way. Others are starting to shop in discount stores, as the increased volume of shoppers in these stores testifies. Therefore, the demand for retail space is still strong, but its structure and list of tenants has changed.
In recent years, investment in Russian commercial properties grew at breakneck speeds. Just in 2006, they were 10 times higher than the preceding year. As reported by consultancies, from 2005 to 2008 the total money infused into the realty market exceeded $10 billion. Of this, more than half came from Western investment funds which snapped up offices, malls, warehouses and hotels like hot cakes, attracted by 20% yields – a far better deal than they could possibly strike in Europe. However starting last fall Western managers withdrew some $5 billion from the Russian market. Will they come back any time soon?
The German company Baufritz, which specializes in the construction of ecological buildings and offices, has come to Russia. October 21–23, 2009 there was a media-tour given for representatives of leading Russian business and specialized publications. In Erkheim, Germany. They had the opportunity to see the company's projects in Germany and observe the production process.
Before the crisis, many foreign professionals were eager to make their career on Russia's commercial real estate market. The rapidly developing Russian market was generating stable revenue flows beyond any imagination. The declared developer projects were the largest-scale; it was the time of challenge for market professionals to indicate in the CV. When the current crisis started many of those foreigners found themselves idle. Is it really so?
Before a new development appears on the city map the landlord has to go a long way – obtain construction permits and have his project approved. This may drag on for many months. In this article we’ll highlight the practice of obtaining planning permits on the example of our project – the business center Spartakovsky, 2.
The crisis in the labor market affected almost all spheres and types of business. In this connection many personnel recruitment services which had been relevant and sold well before October 2008 became irrelevant. On the other hand, the demand for new service related, above all, to managing the personnel strength is growing at a mind-boggling speed.
In the second half of 2009, the warehouse real estate market was gradually coming to life. We see a number of deals to prove that trend. John Deere has rented facilities in the South Gate industrial park. The PRV Group, a logistics operator, will rent premises in the MLP-Podolsk warehouse center. The Gates CIS company has signed a preliminary lease agreement as a part of the South Logistics Terminal project. According to reports from major consulting companies, the volume of deals on the warehouse real estate market has been growing. Will this trend lead to lower vacancy rates?

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