Heated Debate at PROEstate

In the course of the business program the participants paid much attention to discussing the issues of the government strategy of territorial development, the formation of new agglomerations, urban-planning mechanisms, and realization of investment projects on new territories.

Prospective thinking

In the words of Alexander Olkhovsky, President of the Guild of Managers and Developers, they’ve learned how to build quality projects in Russia, but in most cases well-planned individual properties with a competent concept and thought-out logistics do not fit into the general cityscape.

Chairman of the Construction Committee under St. Petersburg Administration, Vyacheslav Semenenko agreed with Mr Olkhovsky. In his words, this is not only the problem of Saint Petersburg – in all other big Russian cities it is rather acute.

The main reason behind this situation is the lack of competition in Russian real estate markets, the public official believes. Whatever is built now sells fast and without any problems. “Local deficit exists only in some regions,” stated Semenenko. He also noted that though the urban development industry is well credited and gets decent investments, developers often go bust because of miscalculation. These are some of the consequences of the growth pains. Our real estate market is immature and so one of the problems is disharmony in the development of megacities. Developers do not seek after long-term quality, but just try to make hay.

Board Chairman of RBI Holding Eduard Tiktinsky holds to a different opinion regarding the cycle which the Russian market is presently passing.In his opinion, the market has finally left the sales stage and entered the real marketing stage, where developers will have to endure tough competition and to fight for their product. Big companies that have been 20 years on the market are no longer noted for the greediness peculiar to start-ups. They have a certain development strategy and understand how their moves today may reflect on their tomorrow’s standing; they have social responsibility and care for sustainable development.

Looking at another angle

Experts also noted the lack of mutual understanding and mounting disagreement between three main stakeholders of the urban development process: city authorities managing the urban development policy, investors and developers who are subjects of business activity, and the city establishment taking a proactive stance in relation to their city. “Today our public activists hold predominantly negative attitudes,” complained Mr Semenenko. “They are convinced that developers should not touch anything in the historical part of the city, since any interference may impair the authenticity of the old city. This is not only the problem of Saint Petersburg – it is relevant for all big cities of Russia.”

Eduard Tiktinsky agreed that this controversy has been going on for quite a time, posing a serious hurdle to urban development. He believes the only effective method in this situation is forming a medium for discussions. “We have a strange feeling now that all of the city dwellers stand in opposition to any development projects,” stated RBI’s boss. “In reality the situation is different. Very few public activists are opposed to everything we do; most people living in our city are simply disengaged and our challenge is to involve them in a town-planning discourse.”

In the opinion of Tiktinsky, a community of authorities, developers and citizens must finally be formed for key strategic decisions or the road map of further development of the city to be elaborated in its midst. “People must realize that if we touch nothing in the old city it will simply crumble sooner or later and then there will be no sense to talk about heritage conservation,” the businessman resumed.

Also actively discussed at the forum was the subject of integrated development of territories (IDT). In particular, CEO of MR Group Roman Timokhin raised the subject of misunderstanding of the essence and true purpose of IDT projects. “The term ‘integrated’ is unequivocally perceived as ‘plenty of housing.’ But this is an obvious substitution of notions. Integration cannot only imply a huge amount of residential housing, social amenities, schools and daycare centers, though these are definitely important. One should always remember that IDT is also about new jobs,” Timokhin cautioned. He believes that if people move into new residences built on the new territories they will no longer have to spend two-three hours a day traveling between their homes and offices, or the very idea of IDT projects makes no sense.

MR Group’s top manager also discussed the territories to be developed. “I believe it is impossible to make housing affordable in any huge agglomeration,” Timokhin admitted. “The proposal to sell part of the housing at dumped prices can only trigger the 'black market' mechanisms; eventually the initially cheap apartments will be sold at high prices anyway.” In the developer’s opinion, new territories need to be developed – not in the existing megacities, though, but rather in those “defunct” localities that surround Moscow, Saint Petersburg and other big Russian cities. In his opinion, amuch more promising strategy is tocreate small satellite towns on these territories, with 20–60 thousand residents.

Besides the business program, presentations of the most promising development projects and a number of cooperation agreements were concluded. A number of professional competitions – FIABCI Prix d’Excellence, young architects’s competition Petersburg: New Glance and the All-Russian competition PROEstate Media Awards 2012 – were also part of the agenda.