Jason Corcoran in Moscow
21 Apr 2008
Building boom is driven by desire to be Europe’s highest, fastest and most diverse
A forest of cranes breaks up the skyline and dust clouds billow from numerous digs. Much of the 200-acre site for Moscow City – a vast development three kilometres west of the Kremlin on the banks of the Moscow River – is still a building site, but it is filling with residents.
The pioneers set up in Moscow’s version of Canary Wharf in the city’s Presnensky District, or Presnya, more than two years ago. Now the trickle of banks, funds, lawyers, accountants and corporates pitching their offices in the business district is turning into a flood.
The idea behind Moscow City is to create the first zone in Russia that will combine offices, hotels, apartments, restaurants, shops and entertainment centres. It will have about 20 skyscrapers, with at least seven buildings taller than any now in Europe.
A hedge fund executive who works in the completed Tower 2000 in Moscow City has bought an apartment on the 75th floor of Federation Tower, a twin-tower multi-functional skyscraper that will reach 93 floors and a height of 1,161ft. From his office, he has a bird’s eye view of the construction.
He said: “It is exciting to watch the scale of the development from here. State-run bank VTB is moving soon into Federation Tower soon and rents are going to shoot up. I got in early and the price of my place has gone up from 17,000 roubles (€458) per square metre to 25,000 roubles per square metre in a few months.”
Buildings I and II of the Naberezhnaya Tower complex are operational and are home to international corporations Procter & Gamble, IBM, Citibank, E.On Ruhrgas, Nortel Networks, Toshiba, General Electric and KPMG. Global fund manager Pioneer Investments is a tenant in Moscow City and US investment bank Lehman Brothers is acquiring office space in Naberezhnaya Tower II.
The site, also known as the Moscow International Business Centre, is split into 20 plots where domestic and foreign investors are putting up buildings designed by their own architectural teams.
At least 19 high-rise multi-functional buildings housing hotels, apartments and offices with a total area of about 43 million sq ft are being built on the former industrial zone.
Dominating the skyline will be the Norman Foster-designed 2,008ft, 118-storey Russia Tower, which will be one of the tallest buildings in the world when it opens in 2012. By contrast, the tallest building in London’s Canary Wharf, One Canada Square, is 800ft high and only 50 storeys.
The mixed-use Russia Tower – incorporating apartments, hotel, office and leisure space – will use an energy-cycle system to regulate power, temperature and hot water.
Construction on what is intended to be the largest building in Europe began last September with completion set for 2012.
Natalia Borontova, head of research at Jones Lang LaSalle in Moscow, said: “The Kremlin and the Red Square are no longer enough to get the whole picture of Moscow. Postcards will soon feature the skyscrapers of Moscow City as well as historical landmarks. By 2012, Europe will have 61 new skyscrapers. It is symbolic that 16 of them will be in Moscow.”
Oleg Deripaska, Russia’s richest man with a fortune estimated by Forbes Russia of $40bn (€25.2bn), has been the main developer at Moscow City though his Basic Element holding company.
Deripaska built Moscow City’s Tower 2000 building, which has floor space of 32,292 sq ft, and the Bagration Bridge which straddles the Moscow river.
Deripaska’s companies owned 90% of Moscow City after he purchased the 47% previously owned by Mikhail Prokhorov, one of the co-owners of metals conglomerate Norilsk Nickel. Reports in the Russian press suggest Deripaska has since done a deal to sell 50% of his Moscow City interests to the construction company Mirax Group.
Another Russian developer, Mos City Group, is behind the construction of the Imperia and the Eurasia skyscrapers, and the Yuri Dolgorukiy.
The 60-story Imperia will consist of two buildings, an office and retail complex and a glass-domed Aquapark entertainment centre. The 67-floor Eurasia will house offices, apartments and a recreational area, while the Yuri Dolgorukiy Tower with its east-meets-west inspired design will have a hotel and exhibition centre.
MCG is wholly owned by Pavel Fuks, a Russian businessman who has been involved in banking and manufacturing since 1995.
He said: “Nearly everything we build is large multipurpose complexes that consist of both residential and commercial properties. Gains from selling residential part enable us to complete construction of the entire complex while revenues from leasing out commercial properties are our profit. This facilitates the construction financing.”
MCG is planning to list 20% of its stock in a $1bn flotation on the London Stock Exchange later this year to help find additional funding for its projects.
Despite the fact that the amount of office space in Moscow is below the European average, Borontova said: “Moscow is leading the way in terms of construction speed. If it took Canary Wharf 20 years to construct one million square metres of office space, the same volume will be erected in Moscow City in less than seven years.”
The project enjoys the full backing of Moscow mayor Yury Luzhkov and the city council, which recently passed a ruling granting the area free economic zone status, and providing preferential tax treatment to all enterprises leasing office space there.
However, despite this financial inducement, prospective tenants still have to overcome the lack of infrastructure within and linking Moscow City to the rest of the capital. The complex, which will have a large open plaza roughly the size of Red Square at its centre, is expected to attract about half a million people daily. Additional metro stations and rapid transit systems linking Moscow City to Sheremetyevo-2 and Vnukovo airports are yet to be built.
Brady Martin, senior analyst at Alfa Bank, believes decamping to Moscow City is “a prestige play” rather than a sound business decision at the moment.
He said: “Initial building occupancy is quite high but when will the rest catch up? Parking is also nearly non-existent and there are other business areas, like Paveletsky, anyway which are being built nearer to the centre."
Posts
No comments:
Post a Comment