CRE Summit: developers demanding clear rules from authorities

Not only in Moscow are authorities tightly controlling developers when doing construction in the historic city center - the same thing is happening in St. Petersburg. "We are constantly in a dialogue – on how best to preserve the historical heritage. Public authorities should always find reasonable approaches that allow preserving what already exists, and obtain what is needed by a city developing a new urban environment," - Maria Smirnova, chairman of the committee on city property management of the northern capital, explained the position of the authorities.

However, often there is excessive concern as to the lack of clear “rules of the game” for investors - the laws change with each transition of power, from governor to governor, complains business. "The authorities need to select priorities for the city, and to make these understandable to the investors. Then the commercial sector will be able to adapt their plans. The rules of the game will be clear and transparent," said Anastasia Kozlova (Glavstroy VTB).

To defend their interests, the developers need to come together and express the general opinion of the market, all experts agree. Often in Moscow only one organization is ever heard - Arkhnadzor, and the companies cannot be heard. Business should be more active on the issue of cooperation with authorities - without some form of pressure on the officials, this deadlock will not be removed, says Alexander Parshuhov of VTB-Development.

In St. Petersburg, the Guild of Managers and Developers is actively trying to influence the government projects, said Lyudmila Reva (Astera in association with BNP Paribas). In particular, the organization has provided an amendment to the bill on the construction and reconstruction in the city center, which the authorities have promised to consider. However, whether or not this will be taken into account, is unknown.

Officials (saying they are listening to business) are trying to develop a comprehensive plan for the development of the historical center of St. Petersburg. "The government is trying to link development plans with the availability of money. Yet this is a long-term project (25 years), and it has nothing to do with money. Investors and developers will find the means - if the authorities create clear rules of the game for at least the next 10-15 years," said Levan Kharazov (BKN Development).

However, the authorities assess the situation more positively. "Where are your good spirits?" – This was the "fresh wind" brought into the discussion by Timur Zeldich from the SSUE for Real Estate Property Sales in Moscow. "The state allows developers to invest and make profits. The state does not load costs onto business for nothing. In contrast to the previous city government, the new one is saying - We have a many social problems. Want to be part of the solution? In exchange, we allow construction in the city center - but the priority is housing and hotels."

Some developers also came to the defense of the authorities. "If you look at the legislation, which existed five years ago and what we have today, you will notice a big difference. It is evident that the state is trying to help developers - including because of receiving constant complaints," says Maria Matveeva (DK Sozvezdie).

Another topic discussed by the summit participants was the comprehensive development of territories. Property developers, in creating the concept of Integrated Urban Development, must tailor things to a specific city (the demand for residential or commercial areas), as well as the location and potential of the city. "The main problem is the pace of infrastructure construction, which is lagging behind the needs of developers," said Anastasia Kozlova (Glavstroy St. Petersburg). However, developers in the northern capital are quite active - according to Ekaterina Lapina (ARIN Real Estate), 70 new projects of integrated development have been announced, which will see the construction of 40 million sqm of residential housing. Today a little more than 20 projects are already underway.

One of the most ambitious projects is the "New Waterfront" - the aggradation of an island in the Gulf of Finland, which will see the construction of nearly 4 million sqm of residential and commercial real estate. "We want to create new space for human life, which the existing facilities - residential and commercial – do not provide, and which people wish to see when traveling. Our project is focused not only on Russia - there are people who know what the environment should be like, and want to live in it," said Oleg Gromov (Severo-Zapad Invest).