Moscow government seeks balance between city interest and business

On March 6, within the framework of the international investment real estate exhibition MIPIM in Cannes, the Majestic Hotel hosted the Moscow Calling investment conference, organized by the Moscow Government and the Impress Media publishing house. The main topic of the event was the search for ways of interaction between the city authorities and participants in the commercial real estate market - mostly developers.

According to the latter, today there is a lack of clearer and more transparent rules of the game that would allow them to work effectively in the market. As Andrey Barinsky, General Director of Forum Properties, noted, “I would like to wish that investors and developers were more involved in the elaboration of urban planning policy”. This, according to the expert, would make it possible to professionally solve territorial planning issues - with an eye on proven Western practices and experience. Timothy Fenwick, Managing Director of Quantum Potes, spoke about the underdevelopment of infrastructure in Moscow, which affects the desire of developers and investors to work on certain projects. Konstantin Kovalev, head of Blackwood, answering the question “What is needed to attract private investors for the implementation of infrastructure projects?”, Said that everything depends on money. “Investments in infrastructure require long and cheap money. Today there are no developers with cheap money for 25-30 years, ”he said. In turn, representatives of the authorities, answering the question of the development of infrastructure projects, spoke about the possibility of implementing public-private partnerships. As an example of public-private partnership in the construction of road infrastructure, Marat Khusnullin, Deputy Mayor of Moscow in the Moscow Government for Urban Development Policy, cited the interaction of the Moscow authorities with the French company Vinci in the construction of the Moscow-St. Petersburg highway. He also said that the authorities are proposing a number of similar PPP projects in Moscow.

Representatives of the business community also touched upon other reference points in the implementation of capital projects - in particular, the timing of approvals and receipt of the necessary documentation. Representatives of the metropolitan government said they were already intensively working to reduce the time for collecting documents to obtain permits.

Another important topic is the desire to increase the volume of Western capital in Moscow. Lee Timmins, senior vice president of Hines in Russia, expressed his opinion that many properties in Moscow and even in Moscow City do not meet the stringent requirements of international institutional investors. “What Russia needs today is opportunistic investors who are ready to take on development risks,” said Mr Timmins. The lack of institutional investors in Russia also leads to the fact that high-quality properties in Moscow can receive about 8-10 applications from potential buyers. Whereas in the West there may be several dozen of them. As a result, in 2012 the volume of investments in the Russian real estate market may decrease compared to 2011. First, many of the most interesting properties have already been sold. Secondly, now there is a rise in the cost of credit financing, which also affects the willingness and ability of investors to buy.

According to the estimates of the majority of those gathered, Moscow is definitely of interest to both internal and external market players, it is only important to find a balance between the interests of the city and the business community for the implementation of the “right” and sought-after projects.