Read in journal:There are specific rules of appraising commercial properties for mortgage lending purposes, of which both lenders and borrowers should take special notice during crisis periods.
Investments, as a river that irrigated Russia's commercial real estate market before the crisis, now have completely dried up. Western institutional investors with all their fears are not the only ones to blame, as greedy domestic property owners do not want to smoothly evaluate their premises.
Until recently, Land Use and Development Rules were practically non-existent as a normative act. Accordingly, real estate market players had to deal with problems that were not associated with any such rules, but rather with the questions that their absence created. However, the situation is changing now. Land Use and Development Rules have already become established in St. Petersburg and Kazan, as well as in many other municipal areas. Land Use and Development Rules are now coming to Moscow – in 2010.
The press is oftentimes talking about the fact that 85–90% of the owners of buildings located on land sites belonging to the government and to municipalities have already bought out the actual land where their facilities stand – obviously if their intentions were such. Is this really so? What are the prospects for those few that continue leasing the sites where their facilities are located?
Analysts predicted imminent saturation of the Novosibirsk commercial real estate market; however in pursuit of the profit nobody paid attention at their warnings. Quite a few large-scale projects were announced for 2008–2009. It’s not hard to guess that most of them never came down from paper. Judging by the number of frozen sites, a steep drop of the rates and an increase in the share of vacant spaces, the market will now have to look for a new development vector.
Opportunities are available for developers in the niche of small shopping centers – so-called “neighborhood centers” – even in times of an economic downturn, given that the demand for corner shops remains unmet. The small format is interesting for investors because these stores are geared towards mass consumer goods which stably sell even during the crisis.
The current state of things on Moscow's grocery retail market and its further development generally coincide with major trends of the commercial real estate market. Supermarkets, hypermarkets as well as small food firms have been and will be major tenants and buyers of retail space of corresponding sizes and formats. On one hand, the further market development will greatly depend on their ability to pay; on the other hand, market saturation and availability of suitable properties will be decisive factors to forecast the future of food retail.
Despite a drop in funding sources and curtailing of a series of development projects, the year that is about to end brought the hotel industry some good news. First of all, the battle of the hotelier for survival in the new economical environment turned out successful. Secondly, the development of projects funded through one’s own funds continued. There were over 10 hotels inaugurated this year.
The situation on the commercial real estate market changed drastically in the early fall of 2008, and today we no longer talk about a crisis and of its consequences but of a new environment that we all have to live with. The markets witnessed some major institutional changes throughout the whole year whose consequences affected both the employer and the employee.
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