Current trends of the Russian real estate market at MIPIM 2011

“A significant growth in asset and property transactions compared with transactions with shares or participation interest against a backdrop of more severe judicial and administrative decisions,” – this is how Pepeliaev Group Partner Vladimir Sokov characterised the most recent trends in the market at the annual international real estate investment convention MIPIM-2011.

Vladimir Sokov, Partner, and Alexey Konevsky, Head of Pepeliaev Group’s Land Law, Real Estate and Construction Practice, took part in the “Top 10 Most Current trends in Russia’s real estate market in 2011” round table. The event was arranged by the newspaper The Moscow Times as a part of the MIPIM-2011 convention. The lawyers considered that implementing investment projects is often accompanied by difficulties with documentation for land plots and the necessary permissions. For this reason, judicial and administrative decisions have an increasing importance. “When making investments, it is important to take account of both existing legislative provisions as well as the full range of planned amendments in potential areas of investment,” asserts Vladimir Sokov. The lawyer also noted that judicial and administrative decisions had become more severe in terms of supervising compliance with timeframes for implementing investment projects, regulating the demolition of unauthorised buildings and supervising compliance with transport accessibility requirements, ensuring that there are access roads etc.

Alexander Braverman, the General Director of the Federal Fund for Cooperation in the Development of Residential Construction, pointed to the growing interest in construction of affordable housing as a new trend. Irina Dziuba, the Deputy General Director of MR Group, also highlighted this tendency. The Minister of the Economy for Sverdlovsk Region Mikhail Maximov related news of the most significant real estate projects in the Region as well as outlining the Region’s plans for the coming years.

The open discussion at MIPIM-2011 of trends, plans, latest transactions and also legal practice in assisting on investment projects by the leading market participants in the real estate sector (investors, bankers, developers, advisors) helped to get their bearings in terms of the fundamental forecasts for market development in 2011.