Tag Archive | "Russia"

Commercial Real Estate Growth in Russia Not Likely to be Repeated

Russia’s commercial real estate sector had a banner year in 2011. With that said, however, it is highly unlikely that the great successes achieved will be repeated anytime in the near future.

 

Bolstered by deals involving Morgan Stanley and other major investors, Russia’s commercial real estate market saw its average deal size jump by more than one hundred and five million throughout the year. The biggest deal did, in fact, involve Morgan Stanley, as the financial giant purchased a shopping center in St. Petersburg during the month of December.

 

Foreign investors played a big role in the immense growth of the commercial real estate market in Russia. Although domestic buyers still vastly outnumbered them, international investors saw their share of the market greatly increase.

 

The greatest growth in the commercial real estate sector in Russia could be found in the retail sector. The office sector also performed very strongly in 2011.

 

Economic growth in Russia will slow down slightly in 2012, and as such, it is unlikely that the nation will experience a repeat performance in the commercial real estate market. The market will still grow, however, as Russia continues to recover from the real estate crisis that impacted nations around the globe.

 

One reason why Russia will not experience a repeat performance with respect to their commercial real estate market is that many of the property sectors remain undersupplied. The nation continues to lack in the number of quality properties available to investors, and as such, the market will not be able to grow as fast as it potentially could.

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Morgan Stanley Plans to Buy Russian Mall

Morgan Stanley has made a major move to expand its commercial real estate portfolio. The real estate fund has agreed to purchase the Galeria Center in St. Petersburg, Russia for just over one billion dollars.

The Galeria Center is the largest mall in central St. Petersburg. It has roughly two hundred and fifty stores over five floors, and is about one million square feet in size. The St. Petersburg mall also has a multi-screen movie theater, a bowling alley, and a large underground parking garage.

The purchase is a major piece of the plans set in place by the real estate fund to invest money committed by such backers as China Investment Corp., Canada Pension Plan Investment Board, and the Government of Singapore Investment Corp. Those backers committed roughly four billion dollars to the fund for various international real estate investments. The Morgan Stanley Real Estate Fund has said that they will have invested the remainder of the money within the next year and a half.

The real estate fund hopes to take advantage of strong retail sales in St. Petersburg, Russia. The sale was one of the biggest to take place in Russia over the last five years. It has yet to be seen if the Morgan Stanley Real Estate fund will invest the remainder of their backers’ money in Russia, or if they will look to other countries around the world. They have invested less than half of the money thus far, and as such, will likely make another purchase in the very near future.

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Russian Buyers Looking to Spanish Real Estate Market

While Spain’s residential real estate market has struggled immensely in the past year, it is receiving an unexpected boost from international investors. The number of buyers from Russia has significantly increased in recent months, and has actually doubled since last year.

Russians are investing in Spanish properties in droves, as they are attracted to the marvelous scenery, and the incredible deals to be had on residential properties. An increase in the number of direct flights from Moscow to Spain has also played a major role in the rise of Russian real estate investors in the country.

Affordability and the acquisition of a European visa also make Spain an ideal choice for many international investors. By purchasing property in Spain, Russians and other international investors are far more likely to receive a visa that will facilitate any and all travel throughout Europe.

Another factor playing a major role in the increase of international investors in Spain is the presence of high-end golf courses. Prime properties, such as those on golf courses, have performed well throughout the residential real estate market downturn, and continue to do well in today’s market.

Analysts believe that international investors may give the Spanish real estate market a boost, much like they have done in other real estate markets around the world. The real estate market in Spain has faced incredible difficulties over the past year, particularly in coastal areas. International investors are likely to improve sales in coastal areas as they look to buy vacation properties outside of their native country.

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International Investors Taking Serious Interest in U.S. Real Estate

While most United States citizens are shying away from buying a home due to the troubled economy, many foreign homebuyers are considering now as the perfect time to buy property in the United States real estate market. As prices continue to fall, particularly in prime cities and warm areas alongside the ocean, international buyers, from such countries as Brazil, Canada, Russia, and China, are buying properties at astounding rates.

Home values in the United States have fallen over thirty percent in the last four years, and some analysts believe that they will fall even more before the real estate market finally hits rock bottom. Part of the reason as to why prices have dropped so dramatically is the number of foreclosures that continue to hit the market.

Not all international investors are buying homes in the United States with the intentions of living in them. Rather, they are seeing these properties as excellent rental investments. Many current homeowners are leaving their houses in favor of renting, which is making the rental market more and more lucrative.

Because the dollar is still strong, and market values are depressed, many Canadians are intrigued by the United States housing market. In fact, recent surveys have shown that as much as twenty percent of Canadians are considering buying property in the United States. Many of those that said they were interested prefer southern states like Florida. That should come as no surprise, however, as the majority of those buying property in Miami are foreign investors from Canada, Italy, Russia, and Dubai.

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