Saint-Petersburg was the only region of Russia to present its own exposition at MIPIM Exhibition. Standing out of a crowd, the city was able to emphasize its special “window to Europe” status and let investors see that it believed in open dialogue and successful cooperation in future despite the economic crisis, which gripped this country and the world.
It happened so that this year St. Petersburg alone personified the whole Russia at MIPIM, the largest international real estate investment exhibition. St. Petersburg’s small white pavilion set up right at the edge of the surf did not get lost among its larger neighbors, i.e. pavilions of Istanbul, Paris and London. St. Petersburg could stand out and attract the sophisticated public by presenting more than 30 investment projects worth of $3.3 billion. “Though according to the statistics, investments in Russian real estate dropped by 7-10% last year, we were sure of investment potential of St. Petersburg. It was a window to Europe. We continue to prove this status by presenting cities at the world arena”, said Irina Babyuk, Chairperson of the Investment Committee of St. Petersburg.
Developers working in different regions of Russia stressed that St. Petersburg stood out against general background owing to its investment attractiveness. “Now it is interesting to invest in Russia, in particular in St. Petersburg. Russian projects’ share in our investment portfolio has grown from 50% to 80% of late. And in St. Petersburg we have already formed an investment portfolio worth of 1 million sq. m. of residential and commercial real estate and we will add 1.5 million sq. m. in the short run. We have established a direct dialogue with the city’s officials. If you are a socially reliable investor and keep your word, it is easy to do business in the city with current ruling team in Smolny,” said Andrey Birzhin, Head of Glorax Group.
According to James Corrigan from Sberbank CIB, now it is interesting to make ruble investments in new real estate transactions, as after devaluation of Russian currency the Euro budgets of such projects reduced by half. Following his words, Russian realty market is very intently monitored by Asian investors, who have not been active here for the past ten years. And they are not spooked by anti-Russia sanction policy. “They are going to invest in bricks. And this area is not covered by sanctions,” he said.
Developers from St. Petersburg pointed the authorities to the barriers, which reduce investment attractiveness of the city. As mentioned by Aleksandr Olkhovskiy, Vice-President of VTB Bank, “There is no ideal case for an investor. But one need to remember that investments in the city are primarily investments in the environment. And it is the city that should create it. At least, under the Public Private Partnership programme. But the investor should realize the perspective and estimate his risks.”
“We have to change as faster as the laws and business conditions. The urban image and our needs change. Here comes the time of smart developers. The time of developers, who are ready to risk, stay at the market and develop. And unfortunately, realty prices directly depend on oil prices. But this is an objective change. We have to accept it,” added Yuri Grudin from Pioner, State Corporation.
text by Nikita Kulakov
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