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Valuation Report PO-17/2015
A portfolio of real estate assets in St.
Petersburg and Leningradskaya Oblast',
Moscow and Moskovskaya Oblast’,
Yekaterinburg, Russia
Prepared on behalf of LSR Group OJSC
Date of issue: March 17, 2016
Contact details
LSR Group OJSC,
15-H, liter , Kazanskaya St, St Petersburg, 190031, Russia
Ludmila Fradina, Tel. +7 812 3856105, [email protected]
Knight Frank Saint-Petersburg ZAO,
Liter A, 3B Mayakovskogo St., St Petersburg, 191025, Russia
Svetlana Shalaeva, Tel. +7 812 3632222, [email protected]
Valuation report A portfolio of real estate assets in St. Petersburg and Leningradskaya Oblast', Moscow and Moskovskaya Oblast’,
Yekaterinburg, Russia KF Ref: PO-17/2015 Prepared on behalf of LSR Group OJSC Date of issue: March 17, 2016
Page 1
Executive summary
The executive summary below is to be used in conjunction with the valuation report to which it forms part and,
is subject to the assumptions, caveats and bases of valuation stated herein. It should not be read in isolation.
Location
The Properties within the Portfolio of real estate assets to be valued are located in St.
Petersburg and Leningradskaya Oblast', Moscow, Yekaterinburg, Russia
Description
The Subject Property is represented by vacant, partly or completely developed land plots
intended for residential and commercial development and commercial office buildings with
related land plots.
Areas
Buildings – see the Schedule of Properties below
Land plots – see the Schedule of Properties below
Tenure
Buildings – see the Schedule of Properties below
Land plots – see the Schedule of Properties below
Tenancies
As of the valuation date from the data provided by the Client, the office properties are
partially occupied by the short-term leaseholders according to the lease agreements.
Valuation
Commercial Properties. We’ve analysed both the office real estate market of St.
considerations
Petersburg and Moscow in general and the competitive environment of the Projects
particularly to determine the market rental, vacancy and capitalization rates and OPEX
for the Properties. We used this information to compare it with the data provided by the
Client and to calculate the market rents after the lease expires if the current rent does
not correspond to the market. Furthermore we’ve analysed the supply of the similar
properties for sale. Thus the value was determined by reference to observable prices.
Residential Properties. We’ve analysed both the residential real estate market of St.
Petersburg and Leningradskaya Oblast’, Moscow, Yekaterinburg in general and the
competitive environment of the Projects particularly to determine market prices, sales
pace per quarter, price growth due to the inflation and project completion and
construction costs. We used this information to compare it with the data provided by
the Client and to calculate the market sales prices if the current prices do not
correspond to the market. We assumed that sale prices information provided by the
Client refers to the current average prices for the appropriate unit (apartment (per unit),
office or retail space (per sq. m) or parking lot (per unit)) as if the property was
Page 2
commissioned at the valuation date.
We used CPI forecast of Ministry of Economic Development of Russian Federation to
index the construction costs.
Residential Properties. We’ve analysed average residential prices dynamics by classes
and extrapolated it on indexing the income from sales.
All the general comments set out in this report refer to all the Properties within the
portfolio if only special assumption is not provided.
To the Tax Code of Russian Federation residential development performed by
contractors is not subject to VAT excluding commercial and parking construction in case
of charging VAT from selling prices. Thus VAT paid on construction and other
development costs can be offset only proportionally to the costs incurred in nonresidential construction. Commercial properties are subject to VAT in full (long-term
leasehold of the land plot) or in respect of the price apportioned to the building
(freehold of the land plot) if only the owner’s company is not using Simplified Tax
System. Thus we have assumed that all development costs and prices provided by the
Client include VAT (where applicable). In our value calculations we applied cash flows
including VAT.
More detailed valuation considerations for the particular Properties within the portfolio
are expressed in the description placed in the attachments to the report.
Valuation date
Date of issue: March 17, 2016.
Market Value
136,037,713,000 (One Hundred Thirty-Six Billion Thirty-Seven Million Seven Hundred
(Fair Value),
Thirteen Thousand) RUB.
rounded
Key assumptions
The Subject Property is represented by vacant, partly or completely developed land
plots intended for residential (residential premises) and commercial (apartments)
development (hereinafter referred to as “Residential Properties”) and by commercial
office buildings with related land plots (hereinafter referred to as “Commercial
Properties”). It is assumed that the buildings under construction will be completed in
accordance with the identified plans and specification provided by the Client.
We have been provided with the Properties’ title information by the Client. Nevertheless
we have not been provided with all the ownership certificates and land long-term lease
agreements to verify it. Thus, in our valuation, we have assumed a good and marketable
freehold (to the land plots and buildings) or long-term leasehold (to the land plots) title
and that all documentation is satisfactorily drawn.
Several legal entities are the owners of the Properties within the portfolio. The Client has
informed us that all these legal entities belong to LSR Group OJSC. Thus we assume that
Page 3
100% ownership of LSR Group OJSC is to be valued.
To the title documents provided by the Client, part of the Properties is either the shared
ownership or leasehold. For a shared ownership we assume it is the share of freehold
tenure of the Client in all the properties to be assessed. For leasehold property we
assume it is freehold tenure of the improvements and leasehold of the land to be
assessed.
We assume that all the utilities (heating, cold and hot water, electricity, sewerage /
drainage and telecommunications) are available to the Property at the site borders.
We assume that public and social (including school) facilities for the future development
are sufficient.
We have adopted the Developer’s estimate of project costs (project budget) within our
assessment.
Development project costs provided by the Client consist of already incurred and
estimated outstanding costs. Since we provide our opinion on the value as of the
valuation date, in our calculations we have adopted only estimated outstanding costs.
Residential Properties. Sales proceeds provided by the Client consist of anticipated
income from already sold but unpaid units and estimated income from the unsold units.
In our DCF calculations we have adopted only income estimated from the unsold units.
We assumed that a hypothetic potential purchaser of the Property would normally be
entitled to all the Property rights including claim rights for the payment for sold unpaid
units. Thus, we have added anticipated income from already sold but unpaid units to
the NPV.
We have assumed construction period in accordance with the Developer’s envisaged
timetable when in our opinion this timetable complied with construction periods
witnessed at developments of a comparable scale. Otherwise our knowledge of similar
developments suggested a construction period allowance of approximately 1 year (per
phase if applicable).
Residential Properties. We have assumed construction phasing in accordance with the
Client’s envisaged phasing. In the absence of construction phasing information provided
by the Client, we have adopted the most probable market construction phasing. We
assumed 100,000 – 200,000 sq. m of buildings constructed within 1 phase.
If a whole portfolio, or a substantial number of properties within it, were to be placed on
the market at the same time, it could effectively flood the market, leading to a reduction
in values. Conversely, the opportunity to purchase a particular group of properties
might produce a premium. In other words, the value of the whole could exceed the sum
of the individual parts, and vice versa. Since valuing is for a purpose of inclusion in
financial statements that assumes that the portfolio will continue to remain in the
existing ownership or occupation, it would be inappropriate to make any reduction or
Page 4
allowance in the valuation to reflect the possible effect of flooding the market.
To the Terms of Engagement the valuation of portfolio should be presented in the
format of the report. Market researches, competitors analyses, and description of the
Properties within the Portfolio are placed in attachments to the report.
We draw your attention to the fact that values change over time and a valuation given
on a particular date may not be valid on an earlier or later date. Our opinion of value is
only current at the valuation date. This is particularly important in current market
conditions and subsequent re-valuation(s) may need to be considered to reflect any
changes in inputs after the valuation date.
To comply with the requirement to state restrictions on use, distribution or publication
in IVS 103 para 5(j) the report shall include reference to any conditions on how it may
be reproduced or referred to in the published financial statements of the entity. The
extent and form of any references to the valuation that may appear in the published
financial statements is stated within the relevant sections of this report and in the Terms
of Engagement.
The extent of the valuers' duty including the response to any questions on the valuation
raised by the entity's auditor is stated within the relevant sections of this report and in
the Terms of Engagement.
Property risks
Contamination risk
Planning risk
Construction costs risk
Cost and time over-runs risk
Discount and capitalization rate increases risk
Market uncertainty risk
Page 5
Contents
Executive summary
1.
2.
3.
4.
5.
Instructions
2
10
Engagement of Knight Frank Saint-Petersburg ZAO
10
Scope of enquiries & investigations
23
Valuation bases
24
The property
24
Location
24
Site
24
Description
24
Accommodation
24
Services
25
Legal title
25
Tenancies
31
Condition
31
Environmental considerations
32
Sustainability
32
Planning (Residential Properties)
33
Highways and access
34
Statutory licences & certificates
34
Proposed development
35
Proposed scheme (Residential Properties)
35
Development costs (Residential Properties)
35
Market analysis
37
Market commentary
37
Russia economic overview
38
Investment market commentary
38
Office market overview
39
Residential market overview
40
Valuation
40
Page 6
6.
Highest and Best Use analysis
40
Methodology
41
Valuation considerations
44
Valuation bases
46
Valuation date
46
Market Value
46
Property risk analysis
51
General comments
51
Risks relating to the property
52
Income risks
53
Development risks
53
Economic & property market risks
55
Valuation risks
57
Appendix 1
Terms of Engagement/ General Terms of Business for Russian Valuations
58
Appendix 2
Description of the Properties
59
1. Kazanskaya 36
69
2. Zolotaya Kazanskaya
71
3. Paradny Kvartal BC 11
73
4. Kazanskaya 60
76
5. Ruchyi/Tsvetnoy Gorod
78
6. Smolny Park
81
7. Radishcheva 39
84
8. Verona
86
9. Kovensky
88
10. Dom na Dvoryanskoy
90
11. Osobnyak Truvorova
92
12. Russkiy dom (Baskov)
94
13. Europa City
96
14. Tri Vetra
98
15. Moskovskoye Shosse, 3
100
16. Bogemia
102
Page 7
17. Yuzhnaya Aquatoriya
104
18. Sofiya
107
19. Kalina-Park
110
20. VIVA
112
21. Kvartet
114
22. Shuvalovsky
117
23. Ruchyi/Novaya Okhta
119
24. Ruchyi-7
122
25. Tsivilizatsiya
124
26. Zapovednaya
126
27. Aeroport Rzhevka
128
28. Kosmonavtov
130
29. Paradny Kvartal
132
30. Nevsky 1
134
31. Fontanka 3
137
32. Nevsky 68
139
33. Leningradskoye Shosse 58
141
34. Donskoy Olimp
144
36. ZILART
148
37. Luchi
151
38. iBitsa
154
39. Podolsk-Erino
156
40. Novoe Domodedovo
158
41. Nakhabino Yasnoe
160
42. Noviy Balchug
165
43. Avtozavodskaya
167
44. Davydkovskaya
169
45. Tverskoy Blvd
172
46. Rassvetniy
175
47. Khrustalniye Klyuchi
178
Page 8
48. Michurinskiy
181
49. Rastochnaya
186
50. Academicheskiy
189
51. Flagman
192
52. Shefskaya
195
Appendix 3
Market overview
198
Office market overview of St. Petersburg
199
Office market overview of Moscow
220
Residential market overview of St. Petersburg and Leningradskaya Oblast’
231
Residential market overview of Moscow
298
Residential market overview of Yekaterinburg
314
Appendix 4 –
Residential market segmentation according to the current classification
327
Appendix 5 –
Office market segmentation according to the current classification
330
Page 9
Galina Aleksandrovna Volchetskaya
LSR Group OJSC
15-H, liter , Kazanskaya St, St Petersburg, 190031, Russia
Date of issue: March 17, 2016
Ref: PO-17/2015
Dear Ms. Volchetskaya,
Property: the portfolio of real estate assets in St. Petersburg and Leningradskaya Oblast', Moscow and
Moskovskaya Oblast’, Yekaterinburg, Russia
1. Instructions
Engagement of Knight Frank Saint-Petersburg ZAO
Instructions
1.1 We refer to the Agreement PO-17/2015 and to our subsequent Terms of
Engagement letter and General Terms of Business for Valuations of December 04,
2015, to provide a valuation report on the portfolio of real estate assets in St.
Petersburg and Leningradskaya Oblast', Moscow and Moskovskaya Oblast’,
Yekaterinburg, Russia. Copies of Terms of Engagement letter and General Terms of
Business for Valuations are attached in Appendix 1.
The properties that are the subject of this Valuation Report, each a “Property” and
together the “Properties” are listed below as follows.
1.2 This valuation has been carried out in accordance with the Agreement PO-17/2015,
the Terms of Engagement and our General Terms of Business for Russian Valuations
(“General Terms of Business”), as attached in Appendix 1.
Client
1.3 Our client for this instruction is LSR Group OJSC (“the Client”).
Valuation
1.4 This valuation has been undertaken in accordance with the Royal Institution of
standards
Chartered Surveyors (RICS) Valuation - Professional Standards January 2014 Global &
UK edition (“the Red Book”) including the International Valuation Standards (2013).
The report provided under this instruction has no status of valuation services in
Russia and is not carried out in accordance with the requirements stipulated in the
Federal Law “On Valuation in the Russian Federation”
135 dated July 29, 1998 as
amended.
Valuation report A portfolio of real estate assets in St. Petersburg and Leningradskaya Oblast', Moscow, Yekaterinburg, Russia
KF Ref: PO-17/2015 Prepared on behalf of LSR Group OJSC Date of issue: March 17, 2016
Page 10
Purpose of
valuation
1.5 You have confirmed that this valuation report is required for the purposes of the
preparation of financial statements in accordance with International Financial
Reporting Standards for the year 2015. It also may be used for publication on the
Clients’ website and the attraction of investors.
In addition to the requirement to identify the asset to be valued in IVS 101 para 2(d)
the scope of work shall include confirmation of how that asset is used or classified by
the reporting entity.
The required accounting treatment for identical or similar assets or liabilities can
differ according to how they are used by an entity. Commercial Properties within the
portfolio are mainly owned by the entity for the purpose of the entity's business,
residential Properties are treated as stock in trade like in the case of a development
company.
Conflict of
interest
1.6 We confirm that we do not have any material connection or involvement giving rise
to a conflict of interest and are providing an objective and unbiased valuation.
1.7 We are acting as External Valuers, as defined in the Red Book.
Responsibility to
third parties
Disclosure &
publication
1.8 Our valuation report is only for the use of our Client and no responsibility is accepted
to any third party for the whole or any part of its contents.
1.9 Except as stated above, neither the whole nor any part of this valuation nor any
reference thereto may be included in any published document, circular or statement
nor published in any way without our prior written approval of the form or context in
which it may appear. If our opinion of values is disclosed to the parties other than the
addressee of this report, the basis of valuation should be stated.
Limitations on
liability
1.10 No claim arising out of or in connection with this valuation report may be brought
against any member, employee, partner or consultant of Knight Frank St Petersburg
ZAO. Those individuals will not have a personal duty of care to any party and any
claim for losses must be brought against Knight Frank St Petersburg ZAO.
1.11 Knight Frank St Petersburg ZAO’s total liability for any direct loss or damage caused
by negligence or breach of contract in relation to this instruction and valuation report
is limited to the amount specified in the Terms of Engagement letter/ General Terms
of Business, a copy of which is attached. We do not accept liability for any indirect or
consequential loss (such as loss of profits).
Page 11
Expertise
1.12 The valuer, on behalf of Knight Frank St Petersburg ZAO with the responsibility for
this report are
Olga Baranova MRICS Registered Valuer, Head of Valuations, Knight Frank AO;
Svetlana Shalaeva MRICS, RICS Registered Valuer, Head of Valuation Department,
Knight Frank St Petersburg ZAO.
Parts of this valuation have been undertaken by additional valuers: Anna Vasileva,
Dmitry Tsatskin, Senior Valuers, Evgenia Akulova, Project Manager, Konstantin Fomin,
Director, Key Client Manager, Valuations, as listed below in accordance with VPS 3 of
the Red Book.
We confirm that the valuers meet the requirements of the Red Book, having sufficient
current knowledge of the particular market and the skills and understanding to
undertake the valuation competently. Furthermore we confirm that valuation has
been undertaken by all the valuers involved in accordance with the Royal Institution
of Chartered Surveyors (RICS) Valuation - Professional Standards January 2014 Global
& UK edition (“the Red Book”) including the International Valuation Standards (2013)
Vetting
1.13 This report has been vetted as part of Knight Frank St Petersburg ZAO’s quality
assurance procedures.
Page 12
Table 1. List of the Properties within the portfolio
N
o
Development
Project
Address
Site Area,
ha
Saint-Petersburg and Leningradskaya Oblast'
Business centers
Lit , 36,
1
Kazanskaya 36
Kazanskaya St,
0.25
St.Petersburg
44, Kazanskaya
Zolotaya
2
St,
0.15
Kazanskaya
St.Petersburg
Lit A, 39,
Paradny Kvartal
3
Kirochnaya St,
9.57
BC 11*
St.Petersburg
Lit A, 18,
4
Kazanskaya 60
Fonarny Lane,
St.Petersburg
TOTAL,
business
9.97
centers
Properties for future development
5
RuchÌ Tsvetnoy
Gorod
RuchÌ Tsvetnoy
Gorod block 17
RuchÌ Tsvetnoy
Gorod, rest
TOTAL,
properties for
future
development
145,
Piskarevsky Av,
St.Petersburg
429.29
429.29
Gross
building area,
sq m
Net sellable /
leasable area,
excl. car
parking, sq m
Net unsold
/ unleased
net area,
excl. car
parking,
sq m
7,434.0
4,755
3,060.6
Breakdown of areas (unsold / unleased net area),
sq m
Construc
tion
start
date
(month /
year)
Estima
ted
comple
tion
date
(mont
h/
year)
Land plot
tenure
Stage of
development
LSR
share
,%
4,755
freehold
operating
offices
100%
2,672
2,672
leasehold
operating
offices
100%
3,717.8
3,718
3,718
leasehold
operating
offices
100%
2,212.8
2,027
2,027
land plot is
not formed
operating
offices
100%
16,425
13,172
13,172
5,458,098
2,960,380
2,960,380
2,509,690
100,000
100,000
100,000
2,860,380
2,860,380
2,409,690
2,960,380
2,960,380
5,458,098
Residentia
l
Offices
450,69
0
450,69
0
Retail
Othe
r
0
0
Parking
, lots
25,686
Mar-16
25,686
Valuation report A portfolio of real estate assets in St. Petersburg and Leningradskaya Oblast', Moscow and Moskovskaya Oblast’, Yekaterinburg, Russia
Page 13
freehold
100%
Projec
t
compl
etion,
% (to
the
borne
costs)
Presold /
prelease
d of net
sellable /
leasable
areas,
excl. car
parking,
%
4%
0%
freehold
design
13%
0%
freehold
concept
development
4%
0%
N
o
Development
Project
Address
Elite (A) class residential properties
Lit A, 4,
6
Smolny Park
Smolnogo St,
St.Petersburg
Phase 2, bldgs.
2,5,6
Phase 3
Phase 4
Lit M, 39,
Radishcheva
7
Radishcheva, 39
St,
St.Petersburg
Lit A, 29,
8
Verona
Morskoy Pr,
St.Petersburg
Lit A, 5,
9
Kovensky
Kovensky Lane,
St.Petersburg
Lit , 13,
Dom na
10
Kuybysheva St,
Dvoryanskoy
St.Petersburg
Lit A, 64,
Osobnyak
Martynova
11
Truvorova
Emb,
St.Petersburg
5, Korolenko
12
Russkiy Dom
St,
St.Petersburg
TOTAL, elite
(A) class
residential
properties
Site Area,
ha
Gross
building area,
sq m
Net sellable /
leasable area,
excl. car
parking, sq m
Net unsold
/ unleased
net area,
excl. car
parking,
sq m
8.65
131,411
73,179
40,032
sq m
Construc
tion
start
date
(month /
year)
Estima
ted
comple
tion
date
(mont
h/
year)
Land plot
tenure
Stage of
development
LSR
share
,%
Projec
t
compl
etion,
% (to
the
borne
costs)
Presold /
prelease
d of net
sellable /
leasable
areas,
excl. car
parking,
%
100%
92%
55%
Residentia
l
Offices
Retail
Othe
r
Parking
, lots
23,758
15,483
8,275
0
0
483
24,503
3,060
2,289
771
81
Mar-12
Mar-16
completed
100%
80%
49,844
41,535
22,949
25,727
1,054
19,643
1,054
12,139
7,504
287
115
Nov-12
Nov-13
Mar-16
Dec-18
completed
construction
100%
78%
80%
10%
0.85
31,923
20,879
1,504
444
989
22
Feb-13
Dec-18
freehold
completed
100%
100%
90%
0.36
20,830
11,593
5,731
5,195
537
111
Aug-15
Dec-19
freehold
construction
100%
25%
15%
0.39
12,324
5,871
749
749
8
Jun-11
Jun-16
leasehold
completed
100%
100%
84%
0.19
8,787
6,352
1,620
205
13
Feb-13
Dec-16
freehold
completed
100%
100%
69%
0.21
1,212
1,212
1,212
Oct-16
freehold
completed
100%
100%
0%
2.40
93,725
56,253
30,219
Jul-19
freehold
construction
100%
59%
33%
13.04
300,212
175,338
64,793
1,415
70
leasehold
1,212
26,341
3,877
519
Apr-15
OJSC Date of issue: March 17, 2016
Page 14
KF Ref: PO-17/2015
Prepared on behalf of LSR Group
N
o
Development
Project
Address
Site Area,
ha
Business (B) class residential properties
Lit , 10,
13
Europa City
Medikov Av,
7.36
St.Petersburg
Phase 3
Phase 4
Plot 151, Block
66a,
14
Tri Vetra
3.05
Savushkina St,
St.Petersburg
Lit ,
Moskovskoye
Moskovskoye
15
0.41
Shosse, 3
Hwy,
St.Petersburg
14,
Smolenskaya
16
Bogemia
0.69
St,
St.Petersburg
TOTAL,
business (B)
class
11.09
residential
properties
Mass market ( ) class residential properties
Block 28, 28a,
Yuzhnaya
17
Doblesti St,
23.90
Akvatoriya
St.Petersburg
Yuzhnaya
Aquatoria,
1.82
plot13
Yuzhnaya
Aquatoria,
2.85
plot14
Gross
building area,
sq m
Net sellable /
leasable area,
excl. car
parking, sq m
Net unsold
/ unleased
net area,
excl. car
parking,
sq m
135,554
84,259
70,109
65,445
sq m
Construc
tion
start
date
(month /
year)
Estima
ted
comple
tion
date
(mont
h/
year)
Land plot
tenure
Stage of
development
LSR
share
,%
Projec
t
compl
etion,
% (to
the
borne
costs)
Presold /
prelease
d of net
sellable /
leasable
areas,
excl. car
parking,
%
100%
77%
37%
100%
51%
62%
10%
Residentia
l
Offices
Retail
Othe
r
Parking
, lots
45,339
43,103
1,739
0
497
378
42,674
41,585
10,941
34,397
10,087
33,016
358
1,381
497
189
189
Mar-12
Apr-13
Dec-16
Dec-18
108,246
56,364
41,971
39,013
2,157
0
801
649
Jun-15
Dec-18
leasehold
construction
100%
29%
5%
13,369
9,550
8,389
8,115
0
274
81
Aug-15
Jun-18
freehold
construction
100%
21%
0%
34,352
21,965
21,130
20,141
989
154
Apr-15
Aug-19
freehold
design
100%
24%
0%
291,521
172,137
116,828
523,065
318,279
141,741
124,158
17,582
100%
44%
37%
64,609
39,004
1,710
1,710
0
300
Feb-13
Dec-16
construction
77%
75%
110,320
63,576
1,020
912
108
600
Nov-12
Jun-16
completed
100%
92%
0
0
freehold
2,464
completed
construction
leasehold
Page 15
KF Ref: PO-17/2015
N
o
Development
Project
Address
Yuzhnaya
Aquatoria,
plot24
Yuzhnaya
Aquatoria, plot9
Yuzhnaya
Aquatoria, plot1
Yuzhnaya
Aquatoria, plot2
Yuzhnaya
Aquatoria, plot6
18
Sophiya
19
Kalina Park
20
Viva
21
Kvartet
22
Shuvalovsky
23
Novaya Okhta
Plots 3, 8, 12,
5, 7, 3*, 13, 8*,
1, Lit , 49, 6,
Yuzhnoe Hwy,
St.Petersburg
12, Marshala
Blukhera,
St.Petersburg
Lit , 3,
Moskovskoe
Hwy,
St.Petersburg
Lit 1, Bldg 2,
27, Dunaysky
Av,
St.Petersburg
Plot 208,
Prigorodny
(Kamenka),
St.Petersburg
Murinskaya
Road,
St.Petersburg
sq m
Projec
t
compl
etion,
% (to
the
borne
costs)
Presold /
prelease
d of net
sellable /
leasable
areas,
excl. car
parking,
%
concept
development
0%
0%
construction
31%
18%
Construc
tion
start
date
(month /
year)
Estima
ted
comple
tion
date
(mont
h/
year)
300
Dec-16
Dec-19
2,018
334
Jul-14
Jun-18
759
848
30
Jun-14
Dec-16
construction
70%
56%
80,419
65,811
14,609
600
Aug-15
Jun-18
construction
11%
2%
31,507
1,300
1,300
300
Jan-14
Sep-17
construction
66%
75%
466,416
313,024
49,574
48,053
1,521
1,483
Mar-13
Dec-17
freehold
construction
100%
72%
67%
34.45
544,700
342,657
197,351
194,147
3,204
0
0
1,013
Feb-12
Dec-19
freehold
construction
100%
55%
34%
9.15
135,029
93,558
1,126
960
166
0
0
104
May-12
Dec-16
freehold
completed
100%
100%
98%
6.17
155,863
109,570
10,086
10,086
0
0
0
440
Nov-12
Dec-16
freehold
construction
100%
78%
82%
30.90
680,716
423,640
296,978
293,718
2,448
0
811
2,344
Jul-14
Dec-20
right to
acquire
freehold
construction
100%
21%
19%
104.74
1,241,545
780,501
333,934
325,086
8,848
0
0
5,926
Sep-12
Mar-21
freehold
construction
100%
55%
47%
Site Area,
ha
Gross
building area,
sq m
Net sellable /
leasable area,
excl. car
parking, sq m
Net unsold
/ unleased
net area,
excl. car
parking,
sq m
2.42
49,950
25,000
25,000
25,000
2.48
100,900
56,548
30,685
28,667
0.61
20,710
12,000
1,607
3.56
121,932
90,645
1.50
54,644
21.90
Residentia
l
Offices
Retail
Othe
r
Parking
, lots
Page 16
Land plot
tenure
leasehold
KF Ref: PO-17/2015
Stage of
development
LSR
share
,%
N
o
Development
Project
24
Ruchyi-7
25
Oktyabrskaya
Naberezhnaya
Address
145,
Piskarevsky Av,
St.Petersburg
42,
Oktyabrskaya
Emb,
St.Petersburg
Oktyabrskaya
Naberezhnaya
Rudas
Oktyabrskaya
Naberezhnaya
Barrikada
26
Zapovednaya
27
Aeroport
Rzhevka
28
Kosmonavtov
Plot 3,
Zapovednaya
St (north of Lit
A, 51 ,
Zapovednaya
St),
St.Petersburg
Airport
Rzhevka,
Kovalevo
Settlement,
Vsevolozhsky
District,
Leningradskay
a Oblast'
Plots 1, 2,
Kosmonavtov
Pr (south-east
of Svirskaya St
crossing),
St.Petersburg
Site Area,
ha
Gross
building area,
sq m
Net sellable /
leasable area,
excl. car
parking, sq m
Net unsold
/ unleased
net area,
excl. car
parking,
sq m
23.66
282,321
211,421
59.53
1,329,981
31.02
sq m
Construc
tion
start
date
(month /
year)
Estima
ted
comple
tion
date
(mont
h/
year)
Land plot
tenure
Stage of
development
Jan-18
Dec-21
freehold
design
LSR
share
,%
Projec
t
compl
etion,
% (to
the
borne
costs)
Presold /
prelease
d of net
sellable /
leasable
areas,
excl. car
parking,
%
100%
1%
0%
100%
3%
0%
Residentia
l
Offices
Retail
Othe
r
Parking
, lots
211,421
209,435
1,986
0
0
2,546
823,524
823,524
800,827
22,697
0
0
4,478
701,793
431,011
431,011
413,764
17,247
2,623
Mar-16
Dec-21
design
3%
0%
28.51
628,188
392,513
392,513
387,063
5,450
1,855
Feb-19
Mar-26
concept
development
4%
0%
5.92
146,664
88,667
88,667
86,687
1,980
744
Jan-17
Dec-20
freehold
concept
development
100%
18%
0%
175.00
1,637,974
1,025,000
1,025,000
1,000,000
25,000
12,462
Jul-17
Mar-26
freehold
concept
development
100%
4%
0%
2.43
64,317
45,900
45,900
45,400
500
255
Sep-18
Dec-20
leasehold
concept
development
100%
1%
0%
freehold
Page 17
KF Ref: PO-17/2015
N
o
Development
Project
Address
TOTAL, mass
market ( )
class
residential
properties
Commercial properties
29
Paradny Kvartal
1-3, Paradnaya
St,
St.Petersburg
Phase 5, bldgs.
17,18
30
31
32
Nevsky 1
1, Nevsky Av,
St.Petersburg
Site Area,
ha
Gross
building area,
sq m
Net sellable /
leasable area,
excl. car
parking, sq m
Net unsold
/ unleased
net area,
excl. car
parking,
sq m
497.75
7,208,591
4,575,742
3,225,302
9.57
12,607
12,074
12,074
9.57
12,607
12,074
12,074
2.50
9,709
7,181
7,181
Fontanka 3
3, Fontanka
River Emb,
St.Petersburg
0.19
8,772
5,317
5,317
Nevsky 68
68, Nevsky Av
/ Lit , 40/68,
Fontanka River
Emb,
St.Petersburg
0.15
8,614
5,962
5,962
12.41
39,702
30,533
30,533
974
13,314,550
7,927,301
6,411,008
TOTAL,
commercial
properties
TOTAL,
properties,
located in
SaintPetersburg
and
Leningradskay
a Oblast'
Moscow and Moscovskaya Oblast'
sq m
Residentia
l
Offices
Retail
Othe
r
0
12,074
0
0
Parking
, lots
Oct-12
2,109
4,620
3,677
Land plot
tenure
Stage of
development
LSR
share
,%
Projec
t
compl
etion,
% (to
the
borne
costs)
Presold /
prelease
d of net
sellable /
leasable
areas,
excl. car
parking,
%
0%
12,074
4,949
Construc
tion
start
date
(month /
year)
Estima
ted
comple
tion
date
(mont
h/
year)
21
Dec-16
RF freehold
completed
Dec-18
freehold
concept
development
0%
concept
development
0%
completed
697
45
Dec-18
leasehold
in
investment
terms
2,285
26
Dec-20
freehold
Page 18
KF Ref: PO-17/2015
100%
100%
0%
0%
N
o
Development
Project
33
Leningradskoe
shosse 58
34
Donskoy Olimp
35
Grunvald
36
ZiL
Address
Bldg 14, 21, 58
Leningradskoy
e Hwy,
Moscow
Bldg 19, 21,
Serpukhovsky
Val St, Moscow
Zarechye
Settlement,
Odintsovo
District,
Moscovskaya
Oblast'
23,
Avtozavodskay
a St, Moscow
Site Area,
ha
Gross
building area,
sq m
Net sellable /
leasable area,
excl. car
parking, sq m
Net unsold
/ unleased
net area,
excl. car
parking,
sq m
1.77
93,000
57,500
4.72
239,050
4.10
65.09
TOTAL,
business (B)
class
75.67
residential
properties
Bldg 6,
Proizvodstvenn
37
Luchi
39.12
aya St,
Moscow
Bachurino
Village,
Sosenskoye
38
iBitsa
59.85
settlement,
Novomoskovsk
y AD, Moscow
Phase 1
Phase 2
Phase 3
sq m
Presold /
prelease
d of net
sellable /
leasable
areas,
excl. car
parking,
%
concept
development
100%
16%
0%
Construc
tion
start
date
(month /
year)
Land plot
tenure
Stage of
development
500
Jul-16
Dec-19
freehold
Residentia
l
Offices
57,500
55,000
2,500
85,459
38,416
31,422
4,149
2,845
960
May-13
Nov-18
leasehold
construction
100%
57%
39%
58,331
27,260
1,727
166
593
968
101
Mar-05
Dec-17
freehold to
Housing
Code
completed
100%
100%
90%
1,215,040
979,127
963,896
746,494
217,40
2
10,916
Aug-15
Dec-25
leasehold
construction
100%
7%
0%
1,605,421
1,149,345
1,061,539
1,000,000
476,359
476,359
344,132
132,22
7
4,827
Dec-15
Jun-22
leasehold/f
reehold
design
100%
4%
0%
571,363
280,766
280,766
208,705
0
41,255
171,573
120,295
26,477
68,884
65,654
26,477
68,884
65,654
26,152
67,583
64,408
Sep-16
Jan-17
Sep-18
Dec-21
Dec-21
Dec-21
leasehold
leasehold
leasehold
design
design
design
100%
100%
100%
2%
0%
Retail
68,00
0
Othe
r
LSR
share
,%
Projec
t
compl
etion,
% (to
the
borne
costs)
Estima
ted
comple
tion
date
(mont
h/
year)
Parking
, lots
4,061
3,086
325
1,301
1,246
1,598
Page 19
KF Ref: PO-17/2015
N
o
Development
Project
Address
Site Area,
ha
Phase 4
Shopping and
entertainment
center
39
Podolsk-Erino
40
Novoe
Domodedovo
41
Nakhabino
Yasnoe
Near Sal'kovo
Village,
Ryazanovskoye
Settlement,
Novomoskovsk
y AD, Moscow
Zapadny
Neighbourhoo
d,
Domodedovo,
Moscovskaya
Oblast'
near Chernaya
Village, PavloSlobodskoye
Settlement,
Istrinsky
District,
Moscovskaya
Oblast'
TOTAL, mass
market ( )
class
residential
properties
42
Novy Balchug
TOTAL,
commercial
properties
Bldgs. 1, 2, 3, 9,
Sadovnicheska
ya St, Moscow
Gross
building area,
sq m
Net sellable /
leasable area,
excl. car
parking, sq m
Net unsold
/ unleased
net area,
excl. car
parking,
sq m
138,241
51,751
51,751
sq m
Residentia
l
Offices
Retail
50,563
Othe
r
Parking
, lots
1,189
1,488
68,00
0
100,000
68,000
68,000
0
87.70
900,720
358,800
358,800
303,600
6,900
39.33
567,063
318,274
7,895
2,792
5,103
30.01
243,461
147,464
86,021
82,538
2,976
256.02
3,282,607
1,581,663
1,209,841
0.40
24,815
11,222
11,222
8,527
2,695
0.40
24,815.00
11,222.27
11,222.27
48,30
0
507
Construc
tion
start
date
(month /
year)
Estima
ted
comple
tion
date
(mont
h/
year)
Land plot
tenure
Stage of
development
LSR
share
,%
Sep-19
Dec-21
leasehold
design
100%
100%
Projec
t
compl
etion,
% (to
the
borne
costs)
Presold /
prelease
d of net
sellable /
leasable
areas,
excl. car
parking,
%
Jul-19
Dec-21
leasehold
concept
development
4,112
Aug-17
Dec-23
leasehold /
freehold
registration
concept
development
100%
0%
0%
458
Aug-11
Nov-18
leasehold /
freehold
registration
construction
100%
91%
94%
300
Dec-12
Mar-19
freehold
construction
100%
47%
33%
170
Apr-16
Jun-20
leasehold
design
100%
46%
0%
Page 20
KF Ref: PO-17/2015
N
o
Development
Project
Address
sq m
Site Area,
ha
Gross
building area,
sq m
Net sellable /
leasable area,
excl. car
parking, sq m
Net unsold
/ unleased
net area,
excl. car
parking,
sq m
0.64
7,767
7,767
7,767
7,767
16
1.14
41,819
19,090
1,737
1,737
6
4,904
2,711
2,711
54,490
29,568
12,214.70
4,967,332
2,771,798
2,294,816
206,884
143,437
71,282
71,282
309,380
217,200
191,909
191,523
386
315,590
250,967
147,818
146,656
1,162
141,021
174,569
114,867
136,101
11,786
136,033
11,510
135,146
16,562
10,373
10,373
10,154
Residentia
l
Offices
Retail
Othe
r
Parking
, lots
Construc
tion
start
date
(month /
year)
Estima
ted
comple
tion
date
(mont
h/
year)
Land plot
tenure
Stage of
development
LSR
share
,%
leasehold
completed
100%
freehold to
Housing
Code
completed
100%
Projec
t
compl
etion,
% (to
the
borne
costs)
Presold /
prelease
d of net
sellable /
leasable
areas,
excl. car
parking,
%
Business centers
43
Avtozavodskaya
44
Davydkovskaya
22,
Avtozavodskay
a St, Moscow
16,
Davydkovskaya
St, Moscow
16, Tverskoy
Blvd, Moscow
16, Tverskoy
0.14
Blvd
TOTAL,
business
1.91
centers
TOTAL,
properties,
located in
334.00
Moscow and
Moscovskaya
Oblast'
Yekaterinburg
2B, 40-Letiya
46
Rassvetny
Komsomola St,
8.75
Yekaterinburg
Khrustalniye
Latviyskaya St,
47
11.02
Klyuchi
Yekaterinburg
Sukhodolskaya
48
Michurinsky
St,
46.85
Yekaterinburg
Phase 1
20.43
Phase 2
26.43
Rastochnaya
49
Rastochnaya
St,
0.54
Yekaterinburg
45
Mar-04
Mar-08
0%
100%
83%
operating
offices
/0!
Feb-14
Sep-18
freehold
construction
100%
60%
36%
Apr-14
Oct-21
leasehold
construction
100%
13%
8%
594
Nov-12
Dec-19
freehold
100%
47%
34%
276
887
594
Nov-12
Nov-12
Sep-16
Dec-19
freehold
freehold
construction
construction
100%
100%
95%
7%
74%
0%
219
70
Jan-16
Dec-17
freehold
design
100%
11%
0%
0
0
Page 21
KF Ref: PO-17/2015
N
o
Development
Project
50
Akademichesky
51
Flagman
52
Shefskaya 11
TOTAL,
properties,
located in
Yekaterinburg
TOTAL,
properties
Address
Verkhneuphale
yskaya St,
Yekaterinburg
Repina St,
Yekaterinburg
11, Shefskaya
St,
Yekaterinburg
sq m
LSR
share
,%
Projec
t
compl
etion,
% (to
the
borne
costs)
Presold /
prelease
d of net
sellable /
leasable
areas,
excl. car
parking,
%
Initial concept
& planning
100%
0%
0%
Construc
tion
start
date
(month /
year)
Estima
ted
comple
tion
date
(mont
h/
year)
Land plot
tenure
Stage of
development
600
Nov-16
Dec-20
freehold
Site Area,
ha
Gross
building area,
sq m
Net sellable /
leasable area,
excl. car
parking, sq m
Net unsold
/ unleased
net area,
excl. car
parking,
sq m
13.00
161,651
99,647
99,647
99,647
3.39
99,130
71,523
59,306
54,476
4,830
515
Apr-15
Dec-19
freehold
construction
100%
10%
6%
1.76
30,662
20,081
12,200
12,012
188
136
Nov-15
Mar-18
freehold
construction
100%
13%
11%
85.31
1,139,859
813,227
592,537
1,392.87
19,421,742
11,512,327
9,298,361
Residentia
l
Offices
Retail
Othe
r
Parking
, lots
Page 22
KF Ref: PO-17/2015
Scope of enquiries & investigations
Inspection
1.14 You have instructed us to undertake a restricted service, namely: we have carried out
limited external inspection of all the Properties within the portfolio, internal
inspection of business centres in St. Petersburg.
Our limited inspection of the Properties was undertaken on December 18, 2015 December 31, 2015 by
Olga Baranova MRICS Registered Valuer, Head of Valuations – in Yekaterinburg,
Evgenia Akulova, Project Manager, Konstantin Fomin, Director, Key Client
Manager, Valuations, Knight Frank AO – in Moscow,
Svetlana Shalaeva MRICS Registered Valuer, Head of Valuation Department and
Anna Vasileva and Dmitry Tsatskin, Senior Valuers, Knight Frank St Petersburg – in
St. Petersburg.
We assume there have been neither material changes to the physical attributes of the
property, nor changes to the nature of its location, since the last inspection up to
valuation date.
This fact significantly limits the extent to which reliance can be placed upon this
valuation report.
Investigations
1.15 The extent of enquiries/ investigations made is set out in our General Terms of
Business. In carrying out this instruction we have undertaken verbal/ web based
enquiries referred to in the relevant sections of this report. We have relied upon this
information as being accurate and complete.
Information
provided
1.16 In this report we have been provided with information by the Client. We have relied
upon this information as being materially correct in all aspects.
1.17 In particular, we detail the following:
Information relating to the extent of the property, produced by special services of
public authorities Title documents (ownership certificates and lease agreements);
Information relating to the proposed development scheme, produced by the
Client;
Information relating to the planning status of the Property, from the Client;
Information relating to the construction costs, terms of project realization of the
proposed development as produced by the Client;
Information relating to the sales prices of the proposed development as produced
by the Client.
The information pointed above is not attached to this report but is kept in the
valuers’ archive and can be provided at a request if necessary.
Page 23
1.18 In the absence of any documents or information provided, we have had to rely solely
upon our own enquiries as outlined in this report. Any assumptions resulting from
the lack of information are also set out in the relevant section of this report.
1.19 In the presence of data difference in the documents or information provided, we
have had to rely upon our own enquiries or more precise information provided by
the Client as outlined in this report. Any assumptions resulting from the lack of
information are also set out in the relevant section of this report.
Valuation bases
1.20 In accordance with your instructions, we have provided opinions of value on the
following bases:
Market Value
1.21 The Market Value (Fair value) of the freehold interest in the Properties in its current
Fair value
physical condition, subject to the existing tenancy / ies / with vacant possession
(where applicable) or intended for / in course of development according to the
proposed development scheme, produced by the Client (where applicable). Our key
assumptions are set out in the Valuation Section of this report.
Valuation date
1.22 The valuation date is December 31, 2015
2. The property
Location
Location
2.1.
The brief description of the location and the street plans of the Properties within the
portfolio are attached in Appendix 2.
Site
Site area
2.2.
The brief description of the sites of the Properties within the portfolio are attached in
Appendix 2.
Description
General
2.3.
information
The brief description of the Properties within the portfolio and its images are
attached in Appendix 2.
Accommodation
Measurement
2.4.
We were not able neither to inspect internally all the buildings and sites within the
portfolio nor to take sample check measurements to ensure that the measurements
fall within acceptable tolerance.
Thus we have relied upon the areas provided to us by the Client.
2.5.
A breakdown of floor areas by tenancy is not attached to this report but is kept in the
Page 24
valuers’ archive and can be provided at a request if necessary.
2.6.
The valuation given does not include any plant & machinery or contents within the
property.
Services
2.7.
In accordance with the General Terms of Business enclosed in Appendix 1, no tests
have been undertaken on any of the services.
2.8.
Specifications on connecting utilities are not provided.
We have assumed for the purposes of this valuation that mains heating, cold and hot
water, electricity, sewerage / drainage and telecommunications will be all available
for the properties under development (in course of construction).
We also have assumed that these services will have sufficient capacity to
accommodate the proposed development and that no works are required to upgrade
their capacity. Should any upgrades be required and the costs required are to be
borne by the Developer, our opinion of property value may be affected.
Legal title
Land register
searches
2.9.
As stated in our General Terms of Business, we do not undertake searches or
inspections of any kind (including web based searches) for title or price-paid
information in any publicly available land registers.
Sources of
Information
2.10. We have been provided with the Properties’ title information by the Client.
Nevertheless we have not been provided with all the ownership certificates and land
long-term lease agreements to verify it. Thus, in our valuation, we have assumed a
good and marketable freehold (to the land plots and buildings) or long-term
leasehold (to the land plots) title and that all documentation is satisfactorily drawn.
2.11. We recommend that our understanding of all legal title issues is referred to your
legal advisers for their confirmation that our understanding is correct. It is also
particularly important that your legal advisers should be asked to check whether
there have been any transactions relating to the property which reveal price paid
information which we should be made aware of.
2.12. If any matters come to light as a result of your legal adviser’s review of these issues,
we request that these matters are referred back to us as this information may have an
important bearing upon the values reported.
Tenure
2.13. Thus we have made the assumption that that title to the Properties is the following
(presented in the table below):
Page 25
Table 2. Tenure
No
Development Project
Address
Saint-Petersburg and Leningradskaya Oblast'
Business centers
Lit , 36, Kazanskaya
1 Kazanskaya 36
St, St.Petersburg
44, Kazanskaya St,
2 Zolotaya Kazanskaya
St.Petersburg
3
Paradny Kvartal BC 11*
Lit A, 39, Kirochnaya
St, St.Petersburg
4
Kazanskaya 60
Lit A, 18, Fonarny
Lane, St.Petersburg
TOTAL, business
centers
5
RuchÌ Tsvetnoy Gorod
145, Piskarevsky Av,
St.Petersburg
block 17
RuchÌ Tsvetnoy Gorod,
rest
TOTAL, properties for
future development
Elite (A) class residential properties
Lit A, 4, Smolnogo St,
6 Smolny Park
St.Petersburg
Phase 2, bldgs. 2,5,6
Phase 3
Phase 4
7
Radishcheva, 39
Lit M, 39, Radishcheva
St, St.Petersburg
Site Area,
ha
Gross
building
area, sq m
0.25
7,434.0
0.15
3,060.6
9.57
3,717.8
-
2,212.8
9.97
16,425
429.29
5,458,098
A Plus Estate
ZAO
A Plus Estate
ZAO
LSR.
Nedvizhimost'Severo-Zapad
OOO
A Plus Estate
ZAO
LSR.
OOO
Land plot/
buildings tenure
Freehold/ freehold
Leasehold/ freehold
The right of
permanent
(perpetual) use /
freehold
Land plot is not
formed/ freehold
Freehold
Freehold
429.29
5,458,098
8.65
131,411
Smolny Park
OOO
Leasehold
40,032
49,844
41,535
0.85
31,923
Verona
Lit A, 29, Morskoy Pr,
St.Petersburg
0.36
20,830
9
Kovensky
Lit A, 5, Kovensky
Lane, St.Petersburg
0.39
12,324
10
Dom na Dvoryanskoy
Lit , 13, Kuybysheva
St, St.Petersburg
0.19
8,787
11
Osobnyak Truvorova
Lit A, 64, Martynova
Emb, St.Petersburg
0.21
1,212
Russkiy Dom
5, Korolenko St,
St.Petersburg
TOTAL, elite (A) class
residential properties
A Plus Estate
ZAO
A Plus Estate
ZAO
Building
owner
Freehold
8
12
Land owner
2.40
93,725
13.04
300,212
Stroitelnaya
Korporatsiya
Vozrozhdeniye
SanktPeterburga
OAO
Stroitelnaya
Korporatsiya
Vozrozhdeniye
SanktPeterburga
OAO
Stroitelnaya
Korporatsiya
Vozrozhdeniye
SanktPeterburga
OAO
Stroitelnaya
Korporatsiya
Vozrozhdeniye
SanktPeterburga
OAO
Freehold
Stroitelnaya
Korporatsiya
Vozrozhdeniye
SanktPeterburga
OAO
Freehold
Leasehold
Freehold
Freehold
LSR.
OOO
Freehold
Page 26
No
Development Project
Address
Site Area,
ha
Gross
building
area, sq m
Land owner
135,554
Stroitelnaya
Korporatsiya
Vozrozhdeniye
SanktPeterburga
OAO
Building
owner
Land plot/
buildings tenure
13
Europa City
Lit , 10, Medikov Av,
St.Petersburg
7.36
Phase 3
70,109
Phase 4
65,445
14
Tri Vetra
Plot 151, Block 66a,
Savushkina St,
St.Petersburg
15
Moskovskoye Shosse, 3
Lit , Moskovskoye
Hwy, St.Petersburg
16
Bogemia
14, Smolenskaya St,
St.Petersburg
TOTAL, business (B)
class residential
properties
17
Yuzhnaya Akvatoriya
Freehold
Block 28, 28a, Doblesti
St, St.Petersburg
Yuzhnaya Aquatoria,
plot 13
Yuzhnaya Aquatoria,
plot 14
Yuzhnaya Aquatoria,
plot 24
Yuzhnaya Aquatoria,
plot 9
Yuzhnaya Aquatoria,
plot 1
Yuzhnaya Aquatoria,
plot 2
Yuzhnaya Aquatoria,
plot 6
3.05
108,246
13,369
0.69
34,352
11.09
291,521
23.90
523,065
1.82
64,609
2.85
110,320
2.42
49,950
2.48
100,900
0.61
20,710
3.56
121,932
1.50
54,644
18
Sophiya
Plots 3, 8, 12, 5, 7, 3*,
13, 8*, 1, Lit , 49, 6,
Yuzhnoe Hwy,
St.Petersburg
19
Kalina Park
12, Marshala Blukhera,
St.Petersburg
34.45
544,700
20
Viva
Lit , 3, Moskovskoe
Hwy, St.Petersburg
9.15
135,029
21
Kvartet
Lit 1, Bldg 2, 27,
Dunaysky Av,
St.Petersburg
6.17
155,863
21.90
466,416
Stroitelnaya
Korporatsiya
Vozrozhdeniye
SanktPeterburga
OAO
Zapadny
Skorostnoy
Diametr OAO
LSR.
OOO
LSR.
OOO
LSR.
OOO
Leasehold
Freehold
Freehold
Leasehold
Leasehold
LSR.
OOO
LSR.
OOO
LSR.
OOO
LSR.
OOO
Freehold
Freehold
Freehold
Freehold
Page 27
No
Site Area,
ha
Gross
building
area, sq m
Development Project
Address
22
Shuvalovsky
Plot 208, Prigorodny
(Kamenka),
St.Petersburg
30.90
680,716
23
Novaya Okhta
Murinskaya Road,
St.Petersburg
104.74
1,241,545
24
Ruchyi-7
145, Piskarevsky Av,
St.Petersburg
23.66
282,321
25
Oktyabrskaya
Naberezhnaya
42, Oktyabrskaya Emb,
St.Petersburg
59.53
1,329,981
26
27
28
Oktyabrskaya
Naberezhnaya Rudas
31.02
701,793
Oktyabrskaya
Naberezhnaya
Barrikada
28.51
628,188
5.92
146,664
Zapovednaya
Aeroport Rzhevka
Kosmonavtov
Plot 3, Zapovednaya St
(north of Lit A, 51 ,
Zapovednaya St),
St.Petersburg
Airport Rzhevka,
Kovalevo Settlement,
Vsevolozhsky District,
Leningradskaya
Oblast'
Plots 1, 2,
Kosmonavtov Pr
(south-east of
Svirskaya St crossing),
St.Petersburg
TOTAL, mass market
) class residential
properties
29
Paradny Kvartal
1-3, Paradnaya St,
St.Petersburg
Phase 5, bldgs. 17,18
Building
owner
LSR.
OOO
LSR.
OOO
LSR.
OOO
Land plot/
buildings tenure
Right to acquire
freehold
Freehold
Freehold
Freehold
LSR.
OOO / Aerok
SaintPetersburg
OOO
LSR.
OOO /
Oktyabrskaya,
42 OOO
LSR.
OOO
Freehold
1,637,974
LSR.
OOO
Freehold
2.43
64,317
LSR.
OOO
Leasehold
497.75
7,208,591
175.00
9.57
12,607
9.57
12,607
30
Nevsky 1
1, Nevsky Av,
St.Petersburg
2.50
9,709
31
Fontanka 3
3, Fontanka River Emb,
St.Petersburg
0.19
8,772
Nevsky 68
68, Nevsky Av / Lit ,
40/68, Fontanka River
Emb, St.Petersburg
32
Land owner
0.15
8,614
Stroitelnaya
Korporatsiya
Vozrozhdeniye
SanktPeterburga
OAO
Rf freehold
Stroitelnaya
Korporatsiya
Vozrozhdeniye
SanktPeterburga
OAO /
Nevinvest OOO
Royal Gardens
Hotel OOO
LSR.
OOO
Freehold
Leasehold in
investment terms
LSR.
OOO
Freehold
Page 28
No
Development Project
Address
TOTAL, commercial
properties
TOTAL, properties,
located in SaintPetersburg and
Leningradskaya
Oblast'
Bldg 14, 21, 58
Leningradskoe shosse
33
Leningradskoye Hwy,
58
Moscow
Bldg 19, 21,
34 Donskoy Olimp
Serpukhovsky Val St,
Moscow
Zarechye Settlement,
35 Grunvald
Odintsovo District,
Moscovskaya Oblast'
23, Avtozavodskaya St,
36 ZiL
Moscow
TOTAL, business (B)
class residential
properties
Bldg 6,
37 Luchi
Proizvodstvennaya St,
Moscow
Bachurino Village,
Sosenskoye
38 iBitsa
settlement,
Novomoskovsky AD,
Moscow
Phase 1
Phase 2
Phase 3
Phase 4
Shopping and
entertainment center
Near Sal'kovo Village,
Ryazanovskoye
39 Podolsk-Erino
Settlement,
Novomoskovsky AD,
Moscow
Zapadny
Neighbourhood,
40 Novoe Domodedovo
Domodedovo,
Moscovskaya Oblast'
near Chernaya Village,
Pavlo-Slobodskoye
41 Nakhabino Yasnoe
Settlement, Istrinsky
District, Moscovskaya
Oblast'
TOTAL, mass market
) class residential
properties
Bldgs. 1, 2, 3, 9,
42 Novy Balchug
Sadovnicheskaya St,
Moscow
TOTAL, commercial
properties
Business centers
22, Avtozavodskaya St,
43 Avtozavodskaya
Moscow
Site Area,
ha
Gross
building
area, sq m
12.41
39,702
974
13,314,550
1.77
93,000
MSR-BUTOVO
OOO
Freehold
4.72
239,050
LSR.
Nedvizhimost'M OOO
Leasehold
4.10
58,331
n/a
Freehold to housing
code
65.09
1,215,040
PROMOBYEKT
OOO
Leasehold
75.67
1,605,421
39.12
1,000,000
LSR.
Nedvizhimost'M OOO
Leasehold/freehold
59.85
571,363
41,255
171,573
120,295
138,241
Verkros OOO
Verkros OOO
Verkros OOO
Verkros OOO
Leasehold
Leasehold
Leasehold
Leasehold
100,000
Verkros OOO
Leasehold
87.70
900,720
LSR.
Nedvizhimost'M OOO
Leasehold /
freehold registration
39.33
567,063
LSR.
Nedvizhimost'M OOO
Leasehold /
freehold registration
30.01
243,461
LSR.
Nedvizhimost'M OOO
Freehold
256.02
3,282,607
0.40
24,815
Velikan-XXI vek
OOO
Leasehold
0.40
24,815.00
0.64
7,767
Land owner
A Plus Estate
AO
Building
owner
A Plus Estate
ZAO
Land plot/
buildings tenure
Leasehold
Page 29
No
Development Project
44
Davydkovskaya
45
16, Tverskoy Blvd
Address
16, Davydkovskaya St,
Moscow
16, Tverskoy Blvd,
Moscow
TOTAL, business
centers
TOTAL, properties,
located in Moscow
and Moscovskaya
Oblast'
Yekaterinburg
2B, 40-Letiya
46 Rassvetny
Komsomola St,
Yekaterinburg
Latviyskaya St,
47 Khrustalniye Klyuchi
Yekaterinburg
48
Sukhodolskaya St,
Yekaterinburg
Michurinsky
Phase 1
Phase 2
Site Area,
ha
Gross
building
area, sq m
1.14
41,819
0.14
4,904
1.91
54,490
334.00
4,967,332
8.75
206,884
11.02
309,380
46.85
315,590
20.43
26.43
141,021
174,569
Land owner
n/a
LSR.
Nedvizhimost'Ural ZAO
NOVA-stroy
ZAO
LSR.
Nedvizhimost'Ural ZAO /
NOVA-stroy
ZAO
Building
owner
Land plot/
buildings tenure
A Plus Estate
ZAO
Arkhproekt
MTO OAO
Freehold to housing
code
Freehold
Leasehold
Freehold
Freehold
Freehold
49
Rastochnaya
Rastochnaya St,
Yekaterinburg
0.54
16,562
LSR.
Freehold
50
Akademichesky
Verkhneuphaleyskaya
St, Yekaterinburg
13.00
161,651
n/a
Freehold
51
Flagman
Repina St,
Yekaterinburg
3.39
99,130
52
Shefskaya 11
11, Shefskaya St,
Yekaterinburg
1.76
30,662
85.31
1,139,859
1,392.87
19,421,742
TOTAL, properties,
located in
Yekaterinburg
TOTAL, properties
LSR.
LSR.
Freehold
Freehold
In the absence of a copy lease, we have assumed that normal covenants and liabilities
devolve upon the lessee. It is further assumed that there are no onerous restrictions
or outgoings contained within the lease that would impact on the valuation provided
within this report.
The owners of the Properties within the portfolio are several legal entities. We have
been informed by the Client that all these legal entities are parts of LSR Group OJSC.
Thus we assume that 100% ownership of LSR Group OJSC is to be valued.
To the title documents provided by the Client part of the Properties are either the
shared ownership or leasehold. For the shared ownership we assume it is the share of
freehold tenure of the Client in all the properties to be assessed. For leasehold
property we assume it is freehold tenure of the improvements and leasehold of the
land to be assessed.
2.14. These assumptions should be verified by your legal advisors. If they prove incorrect,
any variation may have a material impact on value and should be referred back to us
Page 30
for further comment.
Rights of way
2.15. From the title documents we noted rights of way and easements referred to some of
the Properties within the portfolio, which may potentially have a detrimental impact
upon the valuations in this report. We recommend that your legal advisers are
instructed to investigate this matter further.
Tenancies
Vacant
possession
2.16. Residential Properties. We have valued all the Properties within the portfolio being
either under development (in course of construction) or intended for future
development on the assumption of vacant possession.
Commercial Properties. As some commercial Properties and business centres within
the portfolio are multi-tenanted i.e. occupied by the owner and other tenants we
have valued it on the assumption of vacant possession after the lease expires.
Tenancy
information
2.17. Commercial Properties. We have been provided with the tenancy information by the
Client and have relied on that information as being correct. If the contract does not
specify the expiration date we assumed the contract shall expire with one year after
the valuation date. No additional verification has been undertaken.
Condition
Scope of
inspection
2.18. As stated in the General Terms of Business attached, we have not undertaken a
building or site survey of the property.
2.19. During our limited inspection we did not inspect any inaccessible areas .We are
unable to confirm whether the property is free from urgent or significant defects or
items of disrepair.
Comments
2.20. Apart from any matters specifically referred to below, we have assumed that it is in
sound order and free from structural faults, rot, infestation or other defects, and that
the services are in a satisfactory condition.
At the date of inspection, the buildings (where applicable) appeared to be in a
generally reasonable state of repair commensurate with their age and use. No
urgent or significant defects or items of disrepair were noted which would be likely to
give rise to substantial expenditure in the foreseeable future or which fall outside the
scope of the normal annual maintenance programme.
Ground
conditions
2.21. We have not been provided with a copy of a ground condition report for the sites.
Residential Properties. We have assumed that there are no adverse ground or soil
conditions and that the load bearing qualities of the site are sufficient to support the
building constructed thereon.
Residential Properties. We have also assumed that no special efforts related to site
preparation except already planned by the Client will be required for development.
Residential Properties. Should any preparations be required and the costs required
Page 31
are to be borne by the Developer, our opinion of property value may be affected.
Mining
2.22. The property is not situated in an area within which specialist consultants
recommend that an Archive Mining Survey is commissioned due to former mining.
Our valuation assumes that the property is not affected by mining, but, in the event
that a survey reveals an adverse position, our valuation could be materially affected.
Environmental considerations
Flooding
2.23. We have been unable to ascertain the risks of flooding relating to the subject
property. We have therefore assumed that the risk is low due to the existing flood
defence system of St Petersburg (Dam) and will not affect the property’s value.
Contamination
2.24. As stated in the General Terms of Business, investigations into environmental matters
would usually be commissioned from suitably qualified environmental specialists.
Knight Frank St Petersburg ZAO is not qualified to undertake scientific investigations
of sites or buildings to establish the existence or otherwise of any environmental
contamination, nor do we undertake searches of public archives to seek evidence of
past activities which might identify potential for contamination.
2.25. Subject to the above, while carrying out our valuation inspection, we have not been
made aware of any uses conducted at the subject property that would give cause for
concern as to possible environmental contamination. Our valuation is provided on
the assumption that the property is unaffected.
High voltage
equipment
1.23 The possible effects of electric and magnetic fields from high voltage electrical supply
equipment is a matter for specialist advice and we have assumed that there is no
adverse effect on value.
Noise pollution 2.26. There are no airports, underground or train way in the vicinity of the Properties’
location. Nevertheless measuring noise pollution is a matter for specialist advice and
we have assumed that there is no adverse effect on value.
Sustainability
Sustainability
2.27. The issue of sustainability is becoming increasingly important to participants in the
property market. There is a general expectation that buildings that minimise
environmental impact through all parts of the building life cycle and focus on
improved health for their occupiers may retain value over a longer term than those
that do not.
Sustainable buildings should optimise utility for their owners and occupiers and the
wider public, whilst minimising the use of natural resources and presenting low
environmental impact, including their impact on biodiversity. Definitions of
sustainability address both social equity, for example, indigenous and affordable
aspects, and environmental impacts, including energy use, both within and
“upstream” of the building itself, in terms of the resources consumed in creating and
operating it.
Page 32
2.28. Some of the key issues relating to a building’s sustainability are:
Land use;
Design and configuration;
Construction materials and services;
Location and accessibility considerations;
Fiscal and legislative considerations;
Management and leasing issues.
2.29. From a value perspective, sustainability is likely to be a long term issue and its
relative importance will change over time. Our valuation provides our opinion of
value at the valuation date based on market related factors at that date.
EPCs
2.30. The properties within the Russian Federation do not require an Energy Performance
Certificate (EPC) when bought, sold, built or rented. An EPC measures the asset rating
of a building in relation to its energy performance.
Planning (Residential Properties)
Sources of
2.31. We have not made any enquiries of the appropriate Planning Authority in respect of
planning
matters affecting the Properties. Where reassurance is required on planning matters,
information
we recommend that formal written enquiries should be undertaken by your legal
advisors who should also confirm the position with regard to any legal matters
referred to in our report. We assume that property will be constructed and will be
occupied or used in accordance with the appropriate permissions and that there are
no outstanding statutory notices.
2.32. These enquiries should not be taken as personal searches and information on the
relevant website is assumed to be both accurate and up to date. For a formal
planning enquiry to be made, the Local Authority will require written representation
which has not been possible as part of our report.
2.33. We have been informed by the Client that the Property is intended for residential
(residential premises) and commercial (apartments) development.
We have not been provided with further planning information by the local authorities
and we depend on all information provided by the Client.
Thus it is assumed that the buildings to be constructed will comply with all necessary
Planning and Building Regulation approvals as appropriate.
Construction
permit
2.34. The Client has provided us the copies of planning permissions for the Properties
within the portfolio under development (in some cases for the current phase of
construction). For the Properties intended for future development design projects are
being prepared; thus planning permissions are not still obtained.
Planning
2.35. The property is not located within a Conservation Area.
restrictions
Page 33
Highways and access
Highways
2.36. We are unaware of any highway proposals that may have a detrimental effect on the
value of the Properties.
Residential Properties. We have assumed that all estate roads within the proposed
scheme will be adopted and maintained at the expense of the Highways Authority.
Access
2.37. In reporting our opinion of value, we have assumed that there are no third party
interests between the boundary of the Properties and the adopted highways and that
accordingly the Properties has unfettered vehicular and pedestrian access.
2.38. We have assumed that there are no issues relating to visibility splays which may
impact upon the use or proposed use of the Properties.
Statutory licences & certificates
2.39. The Subject Property is represented by undeveloped or partly developed land plots
intended for residential and commercial development. Thus future development
requires project design preparation and approval, and further construction permit
obtaining. Construction permit is a document, which approves that project document
complies with construction land plan or complies with plan of the territory, complies
with survey of the territory in case of construction and re-construction of the
buildings, complies with all regulations, statutory licences & certificates including
health and safety standards, fire safety standards and access for disabled persons
provision standards.
Residential Properties. Hence we have assumed in our valuation that property
development will be undertaken in accordance with all regulations, statutory licences
& certificates necessary to be complied with.
Commercial Properties. For the commercial office buildings with related land plots
within the portfolio we have assumed in our valuation that all regulations have been
complied with.
Leadership in
2.40. Some properties may have a Leadership in Energy and Environmental Design
Energy and
Certificate (LEED) when they are constructed, let or sold. Leadership in Energy and
Environmental
Environmental Design (LEED) is one of the most popular green building certification
Design (LEED)
program used worldwide. Developed by the non-profit U.S. Green Building Council
(USGBC) it includes a set of rating systems for the design, construction, operation,
and maintenance of green buildings, homes, and neighborhoodsthat aims to help
building owners and operators be environmentally responsible and use resources
efficiently.
We are unaware of Client’s plans in respect of existing and future buildings LEED
Certification. We have not seen any such documents relating to the property and
cannot comment further in this regard.
Access for
2.41. Disability discrimination legislation provides that the majority of organisations must
Page 34
disabled persons
make provision for disabled persons to have access to the goods and services they
provide. This refers to both non-residential and residential buildings. This may
require an access audit of the property to be undertaken and for specific
arrangements relating to physical aspects of the building. We have not been
provided with any information in this respect and our valuation has been undertaken
on the assumption that the property is capable of being made fully compliant at no
significant additional cost with all relevant disability access requirements.
Fire safety
2.42. It is a requirement for a fire safety risk assessment to be carried out and for a fire
management plan to be maintained.
We have not viewed any such documents relating to the property and have assumed
for the purposes of our valuation that the relevant requirements will be fully
complied with.
3. Proposed development
Proposed scheme (Residential Properties)
Source of
3.1.
The Client provided us the design parameters for the construction of Properties
information
development considered in the valuation as the highest and best use.
Scheme outline 3.2.
The design parameters of Properties development, provided by the Client, are
attached in Appendix 2 within the description of the Properties.
Proposed
3.3.
accommodation
We have relied upon floor areas provided to us by the Client.
We recommend that the design parameters for the construction are confirmed by the
Developer’s architect.
3.4.
A summary of the proposed specification is set out in Appendix 2 within the
Properties’ description. In general terms we believe the proposed schemes are
adequate for the developments of this nature and in this location. This will have a
positive impact on the properties value because the costs to be beard will be
warranted by the achievable sales and rental rates.
Building
3.5.
Regulations
In reporting our opinions of value we have assumed that the schemes are compliant
with all Building Regulations and can be implemented in accordance with the plans
provided. In the event that amendments need to be made to the proposed scheme
as a consequence of it failing to meet statutory requirements, our opinions of value
may be affected.
Rights of lights
3.6.
We have assumed that the proposed scheme does not raise any issues with regard to
rights of light and that no third parties are entitled to compensation and that no
injunctions could be made in this respect.
Development costs (Residential Properties)
General
3.7.
As stated in our General Terms of Business, we strongly recommend that you supply
Page 35
comment
us with build cost and other relevant information prepared by a suitably qualified
construction cost professional, such as a quantity surveyor. We do not hold
ourselves out to have expertise in assessing build costs and any property valuation
advice provided by us will be stated to have been arrived at in reliance upon the
build cost information supplied to us by you.
3.8.
To verify build cost information supplied to us, we have had regard to published
build cost information. There are severe limitations on the accuracy of build costs
verified by this approach and professional advice on the build costs should be sought
by you. The reliance which can be placed upon our advice in these circumstances is
severely restricted. If you subsequently obtain specialist in build cost advice, we
recommend that we are instructed to review our advice.
Source of cost
information
3.9.
We have been supplied with a summary of the development project costs provided
by the Client.
Development project costs include construction costs, costs of utilities, site purchase
and preparation (demolition of existing building excluding monuments of culture and
art), project design and concept costs, engineering, and expenses for consultants and
miscellaneous.
Construction costs include all the fees, material and labour costs incurred in building
a structure. It involves construction of foundation, frames, overlappings, roof,
openings (doors and windows), external walls with fit-out, floors fit-out.
Utilities include electricity and lightening and low-voltage systems, water supply and
sewerage, gas.
Site preparation includes access road construction (if needed), existing buildings
demolition, land plot clearing and levelling, drainage systems construction.
We have been provided with the development project costs (project budget) by the
Client and have therefore relied upon them. Nevertheless we have undertaken web
based enquiries referred to the development cost figures to verify the data provided
by the Client. We have compared Client’s figures with the development cost figures
(excl. land plot acquisition costs) produced by other developers and published on
their web sites in the project declarations.
According to the opinion of experts from Knight Frank St Petersburg Strategic
Consulting Department the applied construction costs are in line with the market
level. The additional verification of the applied construction costs is based on the
experience of several consultancies for different development projects and on
information from quantity surveyor and construction companies.
Build costs
adopted
3.10. In light of the above evidence, we have adopted the Developer’s estimate of project
costs (project budget) outlined above within our assessment. These development
costs include VAT and exclude sales and marketing costs and legal and finance costs
required to complete the scheme as set out in the excel tables with input provided by
the Client.
Page 36
These development project costs consist of already incurred and estimated
outstanding costs. Since we provide our opinion on the value as of the valuation
date, in our calculations we have adopted only estimated outstanding costs.
The information provided by the Client and pointed above is not attached to this
report but is kept in the valuers’ archive and can be provided at a request if
necessary.
3.11. Our valuation has been undertaken upon the assumption that the build costs
adopted by us above are adequate to complete the development to the scheme
adopted by us. Any variation in the build costs may have a significant impact upon
the reported Market Value of the Properties. In this respect we additionally draw
your attention to the importance of our recommendation in relation to the
appointment of an independent quantity surveyor below.
Construction
3.12. We have assumed construction period in accordance with the Developer’s envisaged
period and
timetable when in our opinion this timetable complied with and reflected
phasing
construction periods witnessed at developments of a comparable scale.
Otherwise our knowledge of similar developments suggested a construction period
allowance of approximately 1 year (per phase if applicable).
3.13. We have assumed construction phasing in accordance with the Client’s envisaged
phasing. In the absence of construction phasing information provided by the Client,
we have adopted the most probable market construction phasing. We have assumed
100,000 – 200,000 sq. m of buildings constructed within 1 phase. We based on the
experience due to several consulting service for different development projects and
information from quantity surveyor and construction companies
3.14. Our assumed build costs have been inflated to account for predicted build cost
inflation through the life of the development. This is because we have assumed that
the Developer could not negotiate a fixed price contract at the outset of the
development at the level of our assumed costs due to the long term construction
period.
We have used the CPI forecast by the Ministry of Economic Development of Russian
Federation to index the construction costs.
4. Market analysis
Market commentary
4.1.
It should be appreciated that this section of the valuation report is published for
general information only and while rigorous research has been used in preparing this
analysis, the views and projections provided in the report should not form the basis
of any formal decision. Being a general report, the material does not necessarily
represent the view of Knight Frank St Petersburg ZAO in relation to specific
properties or projects and no responsibility can be accepted by Knight Frank St
Page 37
Petersburg ZAO resulting from the contents of the document.
Source of
4.2.
information
Our market analysis has been undertaken using market knowledge within Knight
Frank and Knight Frank St Petersburg ZAO, enquiries of other agents, searches of
property databases, as appropriate and any information provided to us.
Russia economic overview
4.3.
GDP growth in 2014: 0.7%; in 2015: -3.7%1; in 2016 – 0.7%, 2017 – 1.9%, 2018 –
2.4% (2016 – 2018 – base forecast prepared by Ministry of Economic Development
of the Russian Federation2)
Inflation in 2014: 11.4%; in 2015: 12.9%3; in 2016 – 6.4%, 2017 – 6.0%, 2018 – 5.1%
(2016 – 2018 – base forecast prepared by Ministry of Economic Development of
the Russian Federation4)
Unemployment rate in December 2014: 5.3%; November 2015: 5.8%5
Key rate: 11%
Exchange Rates as at December 31, 2015: RUB 72.8827 per 1 USD; RUB 79.6972
per 1 Euro6
EURIBOR 12M as at December 31, 2015: 0.0600%7
LIBOR USD 12M as at December 31, 2015: 1.1780%8
Investment market commentary
Background
4.4.
The oil price drop and the consequent weakening of the Russian ruble had a
significant impact on the investors’ mood in 2015. On the one hand, considerable
assets’ price decrease made commercial real estate more appealing for investors.
However, on the other hand, transition from dollar to ruble rental rates in the
commercial market made the rental income less attractive. Though high quality
assets still keep dollar pricing.
Financing
1
4.5.
Since sanctions limitations in 2014 Russian investors still are not able to attract
Preliminary estimate, source: http://www.gks.ru/bgd/free/B15_00/Main.htm
2
http://economy.gov.ru/minec/about/structure/depMacro/20151026
3
As a percentage of Inflation of December 2014 / 2015, source: http://www.gks.ru/bgd/free/B15_00/Main.htm
4
http://economy.gov.ru/minec/about/structure/depMacro/20151026
5
http://www.gks.ru/bgd/free/B14_00/Main.htm
http://www.gks.ru/bgd/free/B15_00/Main.htm
6
http://cbr.ru/
7
http://www.global-rates.com/interest-rates/euribor/euribor-interest-12-months.aspx
8
http://www.global-rates.com/interest-rates/libor/american-dollar/usd-libor-interest-rate-12-months.aspx
Page 38
available financing as opposed to international funds that have an access to global
capital markets. This fact resulted in the low investors’ activity.
Supply/
4.6.
Demand
In addition to traditionally active representatives of the United States and Europe,
new players started to heighten interest in Russian assets from mid-2014. They are
investment funds of the Middle East and Asia. However, it shall be emphasized that
not a single transaction was closed from the beginning of the year with the
participation of these companies. Investors from Asia express an interest in both
residential real estate and infrastructural projects along with the high quality
commercial properties. The volume of transactions with foreign investment
amounted to $540 million at the end of 2015, which is a minimum level since 2009.
Total investment volume in commercial real estate in 2015 amounted to $2.7 billion.
Compared to 2014 it reduced by 27%.
The average size of transaction was minimal since 2010 and amounted to $81 million.
Such a low value is due to a decrease in the assets’ value, and inaccessibility of debt
financing necessary for major acquisitions. Thus, in 2015 the number of transactions
up to $100 million has increased.
Investors in the market face the shortage of high-quality assets. Volatility in rental
income caused by the rental rates reduction and the tenants’ desire to revise tenancy
terms create a barrier to market entry for potential investors seeking stabilized assets.
Contrary to expectations, in 2015 there were only a few transactions of the ownership
of the real estate transferring to the banks. This was the result of the buyer’s fail to
pay the loan under the mortgage loan agreement. However, since further reduce in
the market in 2016 similar transactions may be more spread.
Evidence of
4.7.
investment sales
The current market fails to provide sales transactions on the properties under
development. A number of commercial real estate transactions the information on
which is complete and reliable is also quite few. Thus in our commercial Properties
valuation within the portfolio we relied upon the offer prices available in the market.
Capitalization
4.8.
rate
In 2015 Moscow prime yields remained at 10.50-11.00% and 11.00-12.00% for A and
B class offices respectively, 10.50-11.00% for shopping centres and 12.00-13.00% for
warehouses.
Potential
purchasers
4.9.
Potential purchasers of large-scale assets, i.e. land plots for residential development
are mainly domestic developer companies or, less likely, investment funds who look
for medium to long-term investment. Share of international players is very low and
tends to shrink further.
Potential purchasers of commercial real estate are mainly domestic investors, foreign
investors take ca 20%.
Office market overview
Summary
4.10. St Petersburg and Moscow office market overview are attached in Appendix 3.
Page 39
Evidence of
4.11. We’ve analysed both the office real estate market of St Petersburg and Moscow in
comparable
general and the competitive environment of the Projects particularly to determine
lettings and
the market rental, vacancy and capitalization rates and OPEX for the Properties. We
sales
used this information to compare it with the data provided by the Client and to
calculate the property value if the current rent does not correspond to market.
Furthermore we’ve analysed the supply of the similar properties for sale.
Competitive environment analysis for the commercial office Properties and business
centres within the portfolio follow appropriate office market overview (St Petersburg
and Moscow) and are attached in Appendix 3.
Residential market overview
Summary
4.12. St Petersburg, Moscow and Yekaterinburg residential market overview are attached in
Appendix 3.
Evidence of
4.13. We’ve analysed both the residential real estate market of St Petersburg and
comparable
Leningradskaya Oblast’, Moscow , Yekaterinburg in general and the competitive
sales
environment of the Projects particularly to determine market prices, sales pace per
quarter, price growth due to the inflation and project completion. We used this
information to compare it with the data provided by the Client and to calculate the
market sales prices if the current prices do not correspond to the market. We
assumed that sale prices information provided by the Client refers to the current
average prices for the appropriate unit (apartment (per unit), office or retail space
(per sq. m) or parking lot (per unit)) as if the property was commissioned at the
valuation date.
We’ve analysed average residential prices dynamics by classes and extrapolated it to
index the income from sales.
Competitive environment analysis for the Properties being either under residential
development (in course of construction) or intended for future residential
development within the portfolio follow appropriate residential market overview (St
Petersburg, Moscow and Yekaterinburg) and are attached in Appendix 3.
5. Valuation
Highest and Best Use analysis
5.1.
The analysis of relevant data to develop a market value opinion requires two
important steps in the valuation process before the applicable approaches to value
are applied. Market/marketability analysis begins the process of narrowing the focus
from a broader macro view to data that is especially pertinent to the appraised
property (see Section 4). Highest and best use relies on that analysis to identify the
most profitable, competitive use to which the subject property can be put. The
highest and best use is shaped by the competitive forces within the market where the
property is located and provides the foundation for a thorough investigation of the
Page 40
competitive position of the property in the minds of market participants.
5.2.
The highest and best use analysis allows to define the most profitable and
competitive use of the real estate property, i.e. the use, which guarantees the highest
value of the subject property.
The highest and best use includes four compulsory criteria:
Physical possibility – physical possibility of constructing a building for the highest
and best use of the subject site;
Legal possibility – planned use should correspond to the current legislation
restricting use of the site;
Financial feasibility – the legally acceptable use of the site should guarantee
income to the owner;
Highest effectiveness – the highest and best use implies either maximization of
owner's net income, or value of the subject property.
5.3.
Residential Properties. We have assumed that the development scheme of the
Properties within the portfolio either under development (in course of construction)
or intended for future development provided by the Client and described in this
report is consistent with the highest and best use of the Properties as of the valuation
date. Thus we recommend that our assumption on the proposed development
scheme adoption was referred to the appropriate legal and planning advisors. Any
alteration of the proposed scheme may cause the failure to maximising value.
Commercial Properties. We have assumed that the current use of the office real
estate within the portfolio is the highest and best use of the Properties at the
valuation date.
Methodology
5.4.
Our valuation has been undertaken using appropriate valuation methodology and
our professional judgement.
Comparative
5.5.
Method
Comparative Method of Valuation is the most commonly used and accepted method
in ascertaining the market value of properties. Under the Comparative Method, the
valuation approach entails comparing the subject property with similar properties
that were sold recently and those that are currently being offered for sale in the
vicinity or other comparable localities. The characteristics, merits and demerits of
these properties are noted and appropriate adjustments thereof are then made to
arrive at the value of the subject property.
5.6.
Residential Properties. Taking into account the type of the Properties within the
portfolio, namely being either under development or intended for future
development land plots assumed as suitable for residential and commercial
development, we believe that the Comparative Method is not appropriate for its
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valuation.
Commercial Properties. In undertaking our valuation of the commercial office
Properties within the portfolio, we made our assessment only on the basis of a
collation and analysis of appropriate comparable negotiations due to the lack of
evidence of comparable sales transactions.
5.7.
Comparative Method was applied to market value assessment of the commercial
office Properties within the portfolio.
Residual Method 5.8.
The Residual Method of Valuation is normally used for development land or projects.
The Residual Method is a generally accepted method for valuing properties that are
considered to have possible development potential.
This approach entails estimating the gross development value of the development
components and deducting them from the development costs to be incurred, i.e.
preliminary expenses, statutory payments, earthworks, infrastructure and building
construction costs, professional fees, contingencies, project management fees,
marketing and legal fees, financing costs, developer’s profits and other costs (if any)
to arrive at the residual value. This residual value appropriately discounted for the
period of development and sale is deemed to be the present market value of the
subject property.
5.9.
Taking into account the type of the properties, we believe that the Residual Method
is appropriate for its valuation.
Residential Properties. The Client’s projects are assumed to be the highest and best
development of Subject Properties. This concept requires estimating forthcoming net
operating income (NOI – sales or rental or both of them), deducting outstanding
development costs (total project budget) from NOI and discounting resulting cash
flow (CF) to calculate net present value (NPV). Thus, for the purposes of valuation the
concept of construction and future selling is considered.
Commercial Properties. Current use of commercial office Properties and business
centres within the portfolio is assumed to be the highest and best use. This concept
is applicable for the vacant commercial office Properties and requires estimating
forthcoming NOI (Effective Gross Income (EGI) purified from operating expenses
(OPEX)), and discounting resulting CF to calculate NPV. Thus, for the purposes of
valuation the concept of future letting and selling in the end of the forecast period is
considered.
Investment
Method
5.10. The Investment Method of valuation is usually applied for investment properties. In
this method, the annual rental income presently received or expected over a period
of time for the lease of the property is estimated and deducted from the expenses or
outgoings incidental to the ownership of the property to obtain the net annual rental
value. This net annual income is then capitalised by an appropriate capitalisation rate.
The relevant capitalisation rate is chosen based on the investment rate of return
expected (as derived from comparisons of other similar property investments) for the
Page 42
type of property concerned taking into consideration such factors as risk, capital
appreciation, security of income, ease of sale, management of the property, etc.
Investment Method is used for valuing properties that are potentially capable of
generating income like the rental properties which include non-owner occupied
building, houses and duplex, apartment building, etc. The income from rent that an
owner expects from a property is also a part of the value of that property. This
approach is not suitable for purely residential properties that do not generate any
income.
This approach to value is best suited for income generating property that has
adequate market data, because it is meant to reflect the behaviour and expectation
of participant of typical market.
5.11. Residential Properties. Russian secondary land rental market is quite undeveloped.
Partially developed land having encumbrance are not purchased as investment
property. Purchasing for further development is the most spread way of land
investment. Thus the future owner doesn’t rely on possible rental income from
property when taking a buying decision.
Thus rate of return expected from rent cannot arrive from comparisons of other
similar property investments for appropriate comparable buying and rental
transactions/ negotiations are lacking. This fact confirms that purchasing land
investment properties is not for rent for it does not result in the best rate of return on
assets.
The adequate market data on capitalization rate is lacking taking into account all the
aforesaid.
Taking into account the type of the property, namely residential (residential premises
and apartments) Properties being either under development (in course of
construction) or intended for future development within the portfolio, we believe that
Investment Method is not appropriate for its valuation.
Commercial Properties. Taking into account the type of the property, namely multitenanted commercial office Properties and business centres within the portfolio, we
have arrived at opinion that this approach to value is best suited. We also used the
modification of the Investment Method - Terms&Reversion method (where
applicable).
Profits method
5.12. The Profits Method of Valuation is used to determine the market value of properties
with special licensing requirements. It entails the use of the trading accounts derived
from the business operation of the subject property. The gross receipts are adjusted
to cover payments for purchases and stocks to determine the gross profit. The
operating expenses are then deducted to assess the net trading profit. This figure of
net trading profit less the remunerative interest on the tenant’s capital is the divisible
balance. A percentage of the divisible balance is deemed to be the estimated net
annual rental value of the subject property. This estimated net annual income is then
Page 43
capitalised by an appropriate capitalisation rate or Years’ Purchase figure to capitalise
the income to the present Capital Value of the property.
5.13. Taking into account the type of the property, namely partially developed land plots
suitable for development without special licensing requirements, we believe that
Profits Method is not appropriate for its valuation.
Depreciated
5.14. The Depreciated Replacement Cost (DRC) method is based on an estimate of the
replacement
Market Value for the existing use of the land, plus the current gross replacement
cost method
(reproduction) costs of the improvements, less allowances for physical deterioration
and all relevant forms of obsolescence and optimisation. The DRC method is used
for certain types of properties which are rarely, if ever, sold in the open market,
except by way of a sale of the business of which they are a part (called the business in
occupation), due to their uniqueness arising from the specialised nature and design
of the buildings, their configuration, size, location or otherwise.
5.15. Taking into account the type of the property, we believe that Depreciated
Replacement Cost Method is not appropriate for its valuation.
Valuation considerations
5.16.
Commercial Properties. We’ve analysed both the office real estate market of St
Petersburg and Moscow in general and the competitive environment of the
Projects particularly to determine the market rental, vacancy and capitalization
rates and OPEX for the Properties. We used this information to compare it with
the data provided by the Client and to calculate the market rents after the lease
expires if the current rent does not correspond to the market. Furthermore we’ve
analysed the supply of the similar properties for sale. Thus the value was
determined by reference to observable prices.
Residential Properties. We’ve analysed both the residential real estate market of St
Petersburg and Leningradskaya Oblast’, Moscow , Yekaterinburg in general and
the competitive environment of the Projects particularly to determine market
prices, sales pace per quarter, price growth due to the inflation, project
completion and construction costs. We used this information to compare it with
the data provided by the Client and to calculate the market sales prices if the
current prices do not correspond to the market. We assumed that sale prices
information provided by the Client refers to the current average prices for the
appropriate unit (apartment (per unit), office or retail space (per sq. m) or parking
lot (per unit)) as if the property was commissioned at the valuation date.
We have used the CPI forecast by the Ministry of Economic Development of
Russian Federation to index the construction costs.
Residential Properties. We’ve analysed average residential prices dynamics by
classes and extrapolated it on indexing the income from sales.
All the general comments set out in this report refer to all the Properties within
Page 44
the portfolio if only special assumption is not provided.
To the Tax Code of Russian Federation residential development performed by
contractors is not subject to VAT excluding commercial and parking construction
in case of charging VAT from selling prices. Thus VAT paid on construction and
other development costs can be offset only proportionally to the costs incurred in
non-residential construction. Commercial properties are subject to VAT fully
(long-term leasehold of the land plot) or in respect of the price apportioned to
the building (freehold of the land plot) if only the owner’s company is not using
Simplified Tax System. Thus we have assumed that all development costs and
prices provided by the Client include VAT (where applicable). In our value
calculations we have applied cash flows including VAT.
More detailed valuation considerations for the particular Properties within the
portfolio are expressed in the description placed in attachments to the report.
Development
costs
5.17.
We have adopted the Developer’s estimate of project costs (project budget)
within our assessment.
valuation date, in our calculations we have adopted only estimated outstanding
costs.
There are severe limitations on the accuracy of build costs applied by this
approach and professional advice on the build costs should be sought by you.
The reliance which can be placed upon our advice in these circumstances is
severely restricted. If you subsequently obtain specialist build cost advice, we
recommend that we are instructed to review our advice.
Financing and
discount rate
5.18. We’ve applied discount rate for the calculations using the Residual Method
(generally, for Residential Properties).
Despite the general shortage of construction financing in Russia – in particular
financing provided by Western banks – we have assumed in this particular case a
100% equity financing at an interest rate specified for every Property within its
description in the attachment. This interest rate was derived on the basis of the
government bonds yield (OFZ-46020-AD, maturity date – February 06, 2036, yield to
maturity – 9.79%)9 and a margin of approximately 8.00% to 18.00%.
The average applied nominal yield (discount rate) of 21.3% falls within the range of
discount rate of 17%-22% and equals to the average value of this range proposed by
Association of Banks of the North-West Russia for the period of 10.5% key interest
9
http://www.rusbonds.ru/quotes.asp?go=1&tool=%CE%D4%C7-46020-
%C0%C4&emit=0&sec=1&status=&cat=0&per=0&rate=0&ctype=0&pvt=0&grnt=0&conv=0&amm=0&mp=10013&dtd=29&dtm=12&d
ty=2014&bdate=&edate=&byeff=&eyeff=&bvol=&evol=&bsdvol=&esdvol=&btrade=&etrade=
Page 45
10
rate. At the valuation date key interest rate is 11% .
Thus, we are of opinion that the average nominal discount rate of 21.3% applied for
discounting the cash flow in the Residual Method used in undertaking our valuation
of the residential properties within the portfolio is adequate to the market data.
Capitalization
5.19. We have applied a capitalization rate (all-risk yield) of 9% to 11.5% for the Properties
rate
located in Moscow and of 10% to 11.5% for the Properties located in St. Petersburg
as explained in paragraph 4.8.
Calculation
5.20. This valuation does not reflect purchaser’s costs, which we would anticipate to be
approximately 1.5–2% of the property value, including legal and tax advisers’ fees.
The Value provided doesn’t include these fees.
The valuation calculations are attached as the Excel files in the electronic form.
Valuation bases
Market Value
5.21. Market Value is defined within RICS Valuation – Professional Standards as:
“The estimated amount for which an asset or liability should exchange on the
valuation date between a willing buyer and a willing seller in an arm’s length
transaction after proper marketing and where the parties had each acted
knowledgeably, prudently and without compulsion.”
Fair Value
5.22. Fair Value for financial reporting is defined within RICS Valuation – Professional
Standards / International Valuation Standards , adopting the definition of the
International Accounting Standards Board (IASB) in IFRS 13, as:
“The price that would be received to sell an asset or paid to transfer a liability in an
orderly transaction between market participants at the measurement date.”
Portfolios
5.23. In a valuation of a property portfolio, we have valued the individual properties
separately and we have assumed that the individual properties have been marketed
in an orderly way.
Valuation date
Valuation date
5.24. The valuation date is December 31, 2015.
Market Value
Assumptions
5.25. Our valuation is necessarily based on a number of assumptions which have been
drawn to your attention in our Agreement
PO-17/2015 dated December 04, 2015,
General Terms of Business, Terms of Engagement Letter and within this report.
Key assumptions 5.26. Whilst we have not provided a summary of all these assumptions here, we would in
10
http://www.nwab.ru/common/search?q=%D1%81%D1%82%D0%B0%D0%B2%D0%BA%D0%B0%20%D0%B4%D0%B8%D1%81%D0%BA%
D0%BE%D0%BD%D1%82%D0%B8%D1%80%D0%BE%D0%B2%D0%B0%D0%BD%D0%B8%D1%8F
Page 46
particular draw your attention to a key assumption that state assumptions which are
particularly important / relevant as instructed by you so drawn to your attention within
this report:
The Subject Property is represented by vacant, partly or completely developed
land plots intended for residential (residential premises) and commercial
(apartments) development (hereinafter referred to as “Residential Properties”) and
by commercial office buildings with related land plots (hereinafter referred to as
“Commercial Properties”). It is assumed that the buildings under construction will
be completed in accordance with the identified plans and specification provided
by the Client.
We have been provided with the Properties’ title information by the Client.
Nevertheless we have not been provided with all the ownership certificates and
land long-term lease agreements to verify it. Thus, in our valuation, we have
assumed a good and marketable freehold (to the land plots and buildings) or
long-term leasehold (to the land plots) title and that all documentation is
satisfactorily drawn.
The owners of the Properties within the portfolio are several legal entities. We
have been informed by the Client that all these legal entities are parts of LSR
Group OJSC. Thus we assume that 100% ownership of LSR Group OJSC is to be
valued.
To the title documents provided by the Client part of the Properties are either the
shared ownership or leasehold. For the shared ownership we assume it is the
share of freehold tenure of the Client in all the properties to be assessed. For
leasehold property we assume it is freehold tenure of the improvements and
leasehold of the land to be assessed.
We assume that all the utilities (heating, cold and hot water, electricity, sewerage /
drainage and telecommunications) are available to the Property at the site
borders.
We assume that public and social (including school) facilities for the future
development are sufficient.
We have adopted the Developer’s estimate of project costs (project budget)
within our assessment.
valuation date, in our calculations we have adopted only estimated outstanding
costs.
Residential Properties. Sales proceeds provided by the Client consist of
anticipated income from already sold but unpaid units and estimated income
from the unsold units. In our DCF calculations we have adopted only estimated
income from the unsold units. We have assumed that a hypothetic potential
Page 47
purchaser of the Property would normally be entitled to all the Property rights
including claim rights for the payment for sold unpaid units. Thus, we have added
anticipated income from already sold but unpaid units to the NPV.
We have assumed construction period in accordance with the Developer’s
envisaged timetable when in our opinion this timetable complied with
construction periods witnessed at developments of a comparable scale Otherwise
our knowledge of similar developments suggested a construction period
allowance of approximately 1 year (per phase if applicable).
Residential Properties. We have assumed construction phasing in accordance with
the Client’s envisaged phasing. In the absence of construction phasing
information provided by the Client, we have adopted the most probable market
construction phasing. We have assumed 100,000 – 200,000 sq. m of buildings
constructed within 1 phase.
If a whole portfolio, or a substantial number of properties within it, were to be
placed on the market at the same time, it could effectively flood the market,
leading to a reduction in values. Conversely, the opportunity to purchase a
particular group of properties might produce a premium. In other words, the
value of the whole could exceed the sum of the individual parts, and vice versa.
Since valuing is for a purpose of inclusion in financial statements that assumes
that the portfolio will continue to remain in the existing ownership or occupation,
it would be inappropriate to make any reduction or allowance in the valuation to
reflect the possible effect of flooding the market.
To the Terms of Engagement the valuation of portfolio should be presented in the
format of the report. Market researches, competitors analyses and description of
the Properties within the Portfolio are placed in the attachments to the report.
We draw your attention to the fact that values change over time and a valuation
given on a particular date may not be valid on an earlier or later date. Our opinion
of value is only current at the valuation date. This is particularly important in
current market conditions and subsequent re-valuation(s) may need to be
considered to reflect any changes in inputs after the valuation date.
To comply with the requirement to state restrictions on use, distribution or
publication in IVS 103 para 5(j) the report shall include reference to any conditions
on how it may be reproduced or referred to in the published financial statements
of the entity. The extent and form of any references to the valuation that may
appear in the published financial statements is stated within the relevant sections
of this report and in the Terms of Engagement.
The extent of the valuers' duty including the response to any questions on the
valuation raised by the entity's auditor is stated within the relevant sections of this
report and in the Terms of Engagement.
Market Value
5.27. We are of the opinion that the Market Value of the Properties within the portfolio at
Page 48
the valuation date is:
136,037,713,000 (One Hundred Thirty-Six Billion Thirty-Seven Million Seven
Hundred Thirteen Thousand) RUB.
Table 3. Market Value of the Properties within the portfolio
No
1
2
3
4
5
6
7
8
9
10
11
12
13
Development Project
Saint-Petersburg and
Leningradskaya Oblast'
Business centers
Kazanskaya 36
Zolotaya Kazanskaya
Paradny Kvartal BC 11*
Kazanskaya 60
TOTAL, business centers
RuchÌ Tsvetnoy Gorod block 17
RuchÌ Tsvetnoy Gorod, rest
TOTAL, properties for future
development
Elite (A) class residential
properties
Smolny Park
Phase 2, bldgs. 2,5,6
Phase 3
Phase 4
Radishcheva, 39
Verona
Kovensky
Dom na Dvoryanskoy
Osobnyak Truvorova
Russkiy Dom
TOTAL, elite (A) class residential
properties
Business (B) class residential
properties
Europa City
Phase 3
Phase 4
14
Tri Vetra
15
16
Moskovskoye Shosse, 3
Bogemiya
TOTAL, business (B) class
Mass market ( ) class residential
properties
Yuzhnaya Aquatoriya
17
Market Value of
100%
ownership, RUB,
incl. VAT
Address
LSR
share,
%
Lit , 36, Kazanskaya St, St.Petersburg
44, Kazanskaya St, St.Petersburg
Lit A, 39, Kirochnaya St, St.Petersburg
Lit A, 18, Fonarny Lane, St.Petersburg
100%
100%
100%
100%
569,208,000
282,476,000
426,407,000
237,820,000
1,515,911,000
145, Piskarevsky Av, St.Petersburg
100%
10,492,929,000
354,445,341
10,138,483,659
incl. income
from deals
before
December 31,
2015, RUB, incl.
VAT
10,492,929,000
Lit A, 4, Smolnogo St, St.Petersburg
100%
Lit M, 39, Radishcheva St, St.Petersburg
Lit A, 29, Morskoy Pr, St.Petersburg
Lit A, 5, Kovensky Lane, St.Petersburg
Lit , 13, Kuybysheva St, St.Petersburg
Lit A, 64, Martynova Emb, St.Petersburg
5, Korolenko St, St.Petersburg
100%
100%
100%
100%
100%
100%
5,581,203,000
1,868,808,047
1,750,279,592
1,962,115,361
409,193,000
1,557,785,000
137,496,000
311,601,000
520,000,000
2,706,390,000
1,422,753,907
201,681,008
276,963,886
944,109,013
130,265,359
1,075,040,816
22,638,806
37,663,478
1,283,250,877
11,223,668,000
Lit
, 10, Medikov Av, St.Petersburg
Plot 151, Block 66a, Savushkina St,
St.Petersburg
Lit , Moskovskoye Hwy, St.Petersburg
14, Smolenskaya St, St.Petersburg
100%
4,374,548,000
2,215,552,417
2,158,995,583
1,097,621,026
663,832,225
433,788,801
100%
2,415,881,000
1,470,932,594
100%
100%
666,152,000
855,495,000
231,295,989
121,580,305
8,312,076,000
Block 28, 28a, Doblesti St, St.Petersburg
100%
5,223,365,000
640,109,454
1,043,359,639
410,281,758
928,017,621
196,936,557
1,487,597,464
3,435,205,879
525,885,162
73,960,230
1,438,933,707
262,400,475
805,841,214
Page 49
No
Development Project
18
Sophiya
19
20
Kalina Park
Viva
21
Kvartet
22
Shuvalovsky
23
24
25
Novaya Okhta
Ruch’i-7
Tsivilizatsiya
Oktyabrskaya Naberezhnaya Rudas
Oktyabrskaya Naberezhnaya
Barrikada
26
Zapovednaya
27
Aeroport Rzhevka
28
Kosmonavtov
29
30
31
TOTAL, mass market ( ) class
Paradny Kvartal
Phase 5, bldgs. 17,18
Nevsky 1
Fontanka 3
32
Nevsky 68
Address
Plots 3, 8, 12, 5, 7, 3*, 13, 8*, 1, Lit , 49, 6,
Yuzhnoe Hwy, St.Petersburg
12, Marshala Blukhera, St.Petersburg
Lit , 3, Moskovskoe Hwy, St.Petersburg
Lit 1, Bldg 2, 27, Dunaysky Av,
St.Petersburg
Plot 208, Prigorodny (Kamenka),
St.Petersburg
Murinskaya Road, St.Petersburg
145, Piskarevsky Av, St.Petersburg
42, Oktyabrskaya Emb, St.Petersburg
517,062,509
incl. income
from deals
before
December 31,
2015, RUB, incl.
VAT
328,185,092
100%
3,973,981,000
4,245,541,089
100%
100%
7,790,894,000
202,431,000
2,401,734,477
31,314,817
100%
485,599,000
604,045,632
100%
2,515,077,000
3,143,724,890
100%
100%
100%
4,111,896,000
1,856,362,000
4,546,611,000
2,258,510,000
3,414,437,410
LSR
share,
%
2,288,101,000
Plot 3, Zapovednaya St (north of Lit A,
51 , Zapovednaya St), St.Petersburg
Airport Rzhevka, Kovalevo Settlement,
Vsevolozhsky District, Leningradskaya
Oblast'
Plots 1, 2, Kosmonavtov Pr (south-east of
Svirskaya St crossing), St.Petersburg
100%
2,503,789,000
100%
2,172,110,000
100%
547,150,000
35,929,265,000
1-3, Paradnaya St, St.Petersburg
100%
1, Nevsky Av, St.Petersburg
3, Fontanka River Emb, St.Petersburg
68, Nevsky Av / Lit , 40/68, Fontanka
River Emb, St.Petersburg
100%
TOTAL, commercial properties
TOTAL, properties, located in
Saint-Petersburg and
Leningradskaya Oblast'
Business (B) class residential
properties
33
Leningradskoe shosse 58
34
Donskoy Olimp
35
Grunvald
36
37
ZILART
TOTAL, business (B) class
properties
Luchi
38
iBitsa
Phase 1
Phase 2
Phase 3
Phase 4
Shopping and entertainment center
Market Value of
100%
ownership, RUB,
incl. VAT
1,198,289,000
1,198,289,000
1,696,734,000
970,308,000
2,795,754,000
6,661,085,000
74,134,934,000
Bldg 14, 21, 58 Leningradskoye Hwy,
Moscow
Bldg 19, 21, Serpukhovsky Val St, Moscow
Zarechye Settlement, Odintsovo District,
Moscovskaya Oblast'
23, Avtozavodskaya St, Moscow
100%
3,458,946,000
100%
6,681,489,000
1,616,961,330
100%
334,634,000
43,759,124
100%
22,121,905,000
1,779,299,976
32,596,974,000
Bldg 6, Proizvodstvennaya St, Moscow
Bachurino Village, Sosenskoye settlement,
Novomoskovsky AD, Moscow
100%
7,454,796,000
6,111,779,000
100%
100%
100%
100%
100%
576,366,472
1,499,475,387
1,429,167,704
1,126,529,764
1,480,239,673
Page 50
No
Development Project
39
Podolsk-Erino
40
Novoe Domodedovo
41
Nakhabino Yasnoe
Address
LSR
share,
%
Near Sal'kovo Village, Ryazanovskoye
100%
Settlement, Novomoskovsky AD, Moscow
Zapadny Neighbourhood, Domodedovo,
100%
Moscovskaya Oblast'
near Chernaya Village, Pavlo-Slobodskoye
Settlement, Istrinsky District, Moscovskaya 100%
Oblast'
TOTAL, mass market ( ) class
42
43
44
45
TOTAL, commercial properties
Business centers
Avtozavodskaya
Davydkovskaya
16, Tverskoy Blvd
TOTAL, business centers
Yekaterinburg
properties
46
Rassvetny
47
48
Khrustalniye Klyuchi
Michurinsky
Phase 1
Phase 2
Rastochnaya
Akademichesky
Flagman
Shefskaya 11
Yekaterinburg
TOTAL, properties
49
50
51
52
incl. income
from deals
before
December 31,
2015, RUB, incl.
VAT
1,849,725,000
52,333,000
641,171,040
3,284,210,000
344,431,140
18,752,843,000
Bldgs. 1, 2, 3, 9, Sadovnicheskaya St,
Moscow
Novy Balchug
Market Value of
100%
ownership, RUB,
incl. VAT
100%
2,076,886,000
2,076,886,000
16, Davydkovskaya St, Moscow
16, Tverskoy Blvd, Moscow
100%
100%
1,148,208,000
262,475,000
1,101,112,000
2,511,795,000
55,938,498,000
2B, 40-Letiya Komsomola St,
Yekaterinburg
Latviyskaya St, Yekaterinburg
Sukhodolskaya St, Yekaterinburg
Rastochnaya St, Yekaterinburg
Verkhneuphaleyskaya St, Yekaterinburg
Repina St, Yekaterinburg
11, Shefskaya St, Yekaterinburg
100%
2,395,317,000
1,124,926,609
100%
100%
100%
100%
100%
100%
100%
100%
614,742,000
1,701,989,000
664,406,000
1,037,583,000
97,980,000
212,459,000
698,959,000
242,835,000
252,844,179
298,769,658
298,769,658
491,107,693
343,614,837
5,964,281,000
136,037,713,000
6. Property risk analysis
General comments
6.1.
In this section of our report we summarise the property related risks which we have
identified as part of our valuation report and which we consider should be drawn to
your attention. This summary should not be taken to be exhaustive and must be
considered in conjunction with the remainder of the report. Nothing in this section
should be construed as being a recommendation of taking any particular course of
action.
Page 51
Risks relating to the property
Location
6.2.
We assume a high level attraction of the location of Properties within the portfolio
for future tenants and customers.
Contamination
6.3.
While carrying out our valuation inspection, we have not been made aware of any
uses conducted at the subject property that would give cause for concern as to
possible environmental contamination. Our valuation is provided on the assumption
that the property is unaffected.
For the purposes of valuation we referred to the design parameters for the
construction according to the Properties development, provided by the Client. We
consider these parameters especially for residential construction satisfy sanitary
requirements.
Nevertheless in our opinion the absence of the existing sanitary protection zone
requires further investigation.
Planning
6.4.
We have been informed by the Client that the Property is intended for residential and
commercial development.
We assume that all necessary permissions for the scheme described in this report will
be obtained and that this scheme will be completed, in order to arrive at our opinion
of the Market Value of the Property.
We recommend that our assumption on the proposed development scheme
adoption was referred to the appropriate legal and planning advisers.
Legal title
6.5.
Any legal title issues are matters which should be referred to your legal advisers.
However the following matters have come to our attention which we consider require
further investigation
We have been provided with the Properties’ title information by the Client.
Nevertheless we have not been provided with all the ownership certificates and land
long-term lease agreements to verify it. Thus, in our valuation, we have assumed a
good and marketable freehold (to the land plots and buildings) or long-term
leasehold (to the land plots) title and that all documentation is satisfactorily drawn.
We recommend that our assumption on the good and marketable title was referred
to the appropriate legal advisers.
Tenancies
6.6.
Any tenancy issues are matters which should be referred to your legal advisors.
However the following matters have come to our attention which we consider require
further investigation.
Commercial Properties. As some commercial office Properties and business centres
within the portfolio are multi-tenanted i.e. occupied by the owner and other tenants
we have valued it on the assumption of vacant possession after the lease expires.
We have been provided with the tenancy information by the Client and have relied
on that information as being correct. If the contract does not specify the expiration
Page 52
date we assumed the contract shall expire with one year after the valuation date. No
additional verification has been undertaken.
We recommend that our understanding of the expiration date of the current lease
agreements is referred to your legal advisers. Should this be subject to any
amendment our valuation should be reviewed.
Income risks
Tenant covenant 6.7.
Due to the quality of the future building we estimate high quality of tenants and
buyers interested in renting and living space in the Subject Property.
Cashflow
6.8.
Residential Properties. The apartments and residential premises are or will be put on
sale at the early stage of construction that would guarantee stable cash flow. The
pace of sales and prices for the discounted cash flow calculations are in line with
market. Nevertheless in current market conditions there is a higher than normal
degree of uncertainty attached to our opinion of the stability of cash flows.
Commercial Properties. Some commercial office Properties and business centres
within the portfolio are multi-tenanted i.e. occupied by the owner and other tenants.
Most of the contracts do not specify the expiration date thus we assumed the
contract shall expire with one year after the valuation date.
The necessity of new tenants searching may result in cash flows. Nevertheless taking
into account that most of the commercial office Properties and business centres
within the portfolio are owner occupied and intended for further owner occupation
and not for income gaining and will continue to remain in the existing ownership or
occupation uncertainty attached to our opinion of the stability of cash flows is not so
significant.
Reletting
6.9.
Commercial Properties. As the commercial office Properties and business centres
within the portfolio will continue to remain in the existing ownership or occupation
the risk of reletting the premises might be low.
Void costs
6.10. As a result of stable cash flow and low reletting uncertainty the void costs tend to
decrease which also means lower expenses for agent’s rewarding.
Development risks
Construction
costs
6.11. Capital expenditures are to be incurred in course of the actual project development –
construction of utilities and buildings. The scope of estimating both the parameters
of future development and the construction and other costs is beyond the scope of
our expertise. We recommend that our understanding of the parameters of future
development is referred to a project surveyor for confirmation that our
understanding is correct. We recommend that our understanding of the development
costs is referred to a quantity surveyor for confirmation that our understanding is
correct. Should this be subject to material amendment our valuation should be
reviewed.
Page 53
Cost over-runs
6.12. The development scheme described in this report is not unusual type of construction.
Nevertheless we would like to draw your attention to the fact that in current market
conditions the construction of buildings especially within the integrated development
of the territory or any contingencies related to environmental, planning and site
conditions may cause additional costs difficult to pin down in advance. Thus we
recommend that the construction costs should be carefully reviewed by a quantity
surveyor after the building project approval and building permit obtaining.
Time over-runs
6.13. Consequential losses may arise if the development over-runs and the construction
term increases. Thus we recommend that the construction costs should be carefully
reviewed by a quantity surveyor after the building project approval and building
permit obtaining.
Design concerns 6.14. The development scheme of the Properties within the portfolio described in this
report is highest and best use of the Property at the valuation date. Thus we
recommend that our assumption on the proposed development scheme adoption
was referred to the appropriate legal and planning advisers. Any alteration to the
proposed scheme may cause the failure to maximising value.
Discount and
6.15. Appraisal is based on the current market discount and capitalization rates based
capitalization
frequently on estimations and expert opinions of capital markets specialists due to
rate increases
the fact that the buildings sales market is not transparent. We draw to your attention
that in the current economic climate there is a higher than normal degree of
uncertainty attached to our opinion of discount and capitalization rates at the date of
valuation.
Sales rate
(market
absorption)
6.16. Sales rates assumed are in line with the market data.
Commercial Properties. For the commercial office Properties and business centres
within the portfolio intended for remaining in the existing ownership and mostly
owner occupation Comparative Method is the most appropriate. Due to the lack of
evidence of comparable sales transactions we made our assessment only on the basis
of a collation and analysis of appropriate comparable negotiations. Nevertheless the
discounts applied to the asking price are in line with the market.
Profitability of
scheme
Cancellation of
off-plan sales or
6.17. Scheme generates a property value if average profit level in the current market
adopted.
6.18. The scheme is in line with the market data and doesn’t assume a high level of off-plan
sales. Pre-lets are not assumed.
pre-lets
Movement in
6.19. We highlight that our opinion of value is only current at the valuation date. This is
inputs after
particularly important in current market conditions and subsequent re-valuation(s)
valuation date
may need to be considered to reflect any changes in inputs after the valuation date.
Page 54
Economic & property market risks
Market
uncertainty
6.20. We refer to the RICS Valuation – Professional Standards, Guidance Note 1 (Valuation
Certainty). Our opinion of value represents our professional view based upon any
available market evidence and our professional judgement. In the current market,
there is a general lack of market evidence. The lack of market evidence means that
the speed with which values are moving is very difficult to assess. As a result, we need
to place a high degree of reliance upon our professional judgement in arriving at our
opinion of value.
As for commercial real estate investor sentiment towards property investment has
weakened considerably over the past months. Far fewer negotiations are resulting in
transactions as many investors wait to see how market pricing will ultimately adjust
to changing economic and restrictive credit conditions. In consequence, there is a
limited number of comparable transactions. You should note that our opinion of
Market Value is provided in light of these conditions. Accordingly, given the current
economic and property market volatility, we recommend that the valuation is kept
under regular review.
We draw to your attention that in the current economic climate there is a higher than
normal degree of uncertainty attached to our opinion of value at the date of
valuation. We also highlight that our opinion of value is only current at the valuation
date. This is particularly important in current market conditions and subsequent revaluation(s) may need to be considered to reflect any changes in value after the
valuation date.
The further impact of the changing economic and restrictive credit conditions on the
Russian economy is currently unclear.
Macro
6.21. Macro risks refer to types of economic factors which influence the volatility over time
economic/
of investments and the value of properties. The further significant changes in the
political risks
interest rates, inflation or exchange rate may cause changes in value after the valuation
date. We draw to your attention that our opinion of value is only current at the
valuation date.
Demand from
owners /
occupiers
6.22. Residential Properties. The market showed high buying activity relating to the
residential (residential premises or flats) and commercial (apartments) properties.
Commercial Properties. Commercial real estate investor sentiment towards property
investment has weakened considerably over the past year. Volatility in rental income
caused by the rental rates reduction and the tenants’ desire to revise tenancy terms
create a barrier to market entry for potential investors seeking stabilized assets. Far
fewer negotiations are resulting in transactions as many investors wait to see how
market pricing will ultimately adjust to changing economic and restrictive credit
conditions. The market of the properties acquired for owner occupation is almost
completely intransparent. Thus there is a general lack of market evidence.
Page 55
Supply of similar 6.23. Commercial Properties. The average weighted vacancy rate of similar properties in the
properties
area (the existing direct and indirect competitors in the zone of influence) is not high
and doesn’t exceed 15%.
The vacancy rates of the Properties within the portfolio (except 1 building - bldgs. 17,
18, 1-3, Paradnaya St, St.Petersburg) are low or absent at all. This fact corresponds with
the market data and forecast as of the valuation date.
Availability of
finance
Liquidity of the
6.24. The shortage of bank financing, especially for investment and from Western banks, is
now felt in the current real estate market.
6.25. Residential Properties. The Properties may take unusually long time to sell butit
property type /
normally will continue to remain partially in the existing ownership or occupation up to
Time to sell
the completion of the costruction and selling of the units (flats, apartments, built-in
premises and car-parking spaces with related land plots).
Commercial Properties. The Properties would take unusually long time to sell but it
normally will continue to remain in the existing ownership or occupation.
Page 56
Valuation risks
Methodology
6.26. You need to be aware that the residual method requires the input of a large amount
of data, which are rarely absolute or precise, together with making of a large number
of assumptions. Small changes in any of the inputs can cumulatively lead to a large
change in the site value. Some of the inputs can be assessed with reasonable
objectivity, but others require a high degree of professional judgement.
Quality /
6.27. The real estate market in Russia is very opaque. Information on our provided sales
quantity of
and lease comparables is based on published information and internal marketing
comparables
researches of Knight Frank Research Departments.
Signature
Olga Baranova
RICS Registered Valuer
Head of Valuations
Svetlana Shalaeva
Head of Valuation
Konstantin Fomin
Evgenia Akulova
Director, Key Client Manager
Project Manager
Anna Vasileva
Dmitry Tsatskin
Senior Valuer
Senior Valuer
For and on behalf of Knight Frank St Petersburg ZAO
Page 57
Appendix 1
Terms of Engagement/ General Terms of Business for
Russian Valuations
Page 58
LSR Group OJSC
St. Petersburg
Russia
December 4, 2015
Dear Sir/Madam
Our Terms of Engagement for a Valuation of the property, located in St. Petersburg and Leningradskaya
Oblast', Moscow and Moskovskaya Oblast’, and Yekaterinburg, Russia
We are writing to set out our Terms of Engagement for carrying out a valuation of the above property.
Our Terms of Engagement for this instruction comprise our “General Terms of Business for Valuations” which
are attached to this letter, together with the specific terms contained within this letter. This letter shall take
precedence, to the extent that there is any inconsistency with the General Terms of Business for Valuations. A
copy of this letter and our General Terms of Business for Valuations are attached for you to sign and return to
us, signifying your acceptance of the terms.
In addition to our General Terms of Business for Valuations, our Terms of Engagement for carrying out this
instruction are as follows:
Our Client
Our client for this instruction is LSR Group OJSC.
Fees
Our fee for undertaking this instruction will be 4,500,000 Rubles inclusive of VAT 18%.
Conflicts of interest
We confirm that we do not have any material connection or involvement giving rise to a conflict of
interest and are in a position to provide an objective and unbiased valuation.
Page 59
Limitation of liability and restrictions on use
Clause 3 of our General Terms of Business for Valuations limits our liability under this instruction.
Third party liability
Additionally, as stated in Clause 3.1 of our General Terms of Business for Valuations, no liability is
accepted to any third party for the whole or any part of the valuation report.
Disclosure
The valuation report is confidential to the Client.
Valuation standards
The valuation will be undertaken in accordance with the Royal Institution of Chartered Surveyors
(RICS) Valuation - Professional Standards January 2014 Global & UK edition (“the Red Book”)
including the International Valuation Standards (2013)
Status of valuer
External valuers, as defined in the Red Book.
Valuer and Competence Disclosure
The valuer, on behalf of Knight Frank St Petersburg ZAO with the responsibility for this report is
Svetlana Shalaeva MRICS, RICS Registered Valuer, Head of Valuation Department, Knight Frank St
Petersburg ZAO;
Parts of this valuation will be undertaken by additional valuers. We confirm that the valuer and the
additional valuers meet the requirements of the Red Book, having sufficient current knowledge of the
particular market and the skills and understanding to undertake the valuation competently.
Purpose of valuation
The valuation is required for the purposes of publication on the Clients’ website, providing it to the
lient's counterparties, attraction of investors and for the preparation of financial statements in
accordance with International Financial Reporting Standards for the year 2015.
Property to be valued
The list of the property to be valued (the Portfolio) is presented in the Appendix 1 to the Agreement
No. PO-17/2015 dated December 04, 2015 (hereinafter the Agreement).
Page 60
Interest to be valued
Freehold/ leasehold.
Property type and use
Vacant, partly or completely developed land plots intended for residential and commercial
development; commercial office buildings with related land plots.
Basis of valuation
As defined in the RICS Red Book, our valuation will be undertaken on the following bases:
Market Value.
Special Assumptions and Assumptions
Our valuation will necessarily be based upon a number of assumptions, as set out in the General
Terms of Business for Valuations, this letter and within our valuation report.
Valuation date
December 31, 2015.
Currency to be adopted
Russian ruble (RUB).
Extent of inspection and investigations
Our General Terms of Business set out the scope of our on-site inspection and investigations.
Unless prevented from doing so, we will inspect the properties internally. For properties to which
access cannot be gained the valuation will be on a “drive by” basis.
You should note that this significantly limits the extent to which reliance can be placed upon our
valuation report.
Information to be relied upon
In the following a list of Required Information that we need in order to undertake our valuation is set
out:
Information relating to the extent of the property, produced by special services of public
authorities Title documents (ownership certificates and lease agreements);
Information relating to the proposed development scheme, produced by the Client;
Page 61
Information relating to the planning status of the Property, from the Client;
Information relating to the construction costs, terms of project realization of the proposed
development as produced by the Client;
Information relating to the sales prices of the proposed development as produced by the Client.
This information will be relied upon by us in our final valuation report, subject only to any verification
that we have agreed to undertake.
Where we express an opinion of legal issues, any such opinion must be verified by your legal advisors
before the valuation can be relied upon or published.
Report format
Our valuation report will be prepared in our standard format which will be compliant with VPS 3 of
the Red Book. Market researches, competitors’ analyses, and description of the Properties within the
Portfolio will be placed in attachments to the report.
If any of the details set out above are incorrect please let us know – we will assume they are correct unless you
tell us otherwise.
Please will you sign and return the duplicate copy of this Terms of Engagement letter, signifying your
agreement to the terms contained therein. We should point out that the report will not be discussed or
disclosed before these Terms have been returned.
Thank you for instructing Knight Frank ZAO.
Yours faithfully
Svetlana Shalaeva
Head of Valuation
Knight Frank St Petersburg ZAO
[email protected]
Enclosed:
General Terms of Business for Russian Valuations
…………………………………………………..
…………….
Signed for and on behalf of LSR Group OJSC
Date
Page 62
General Terms of Business for Russian Valuations
These General Terms of Business comprise a part of our Terms of Engagement. The following General Terms of Business apply to all
valuations and appraisals undertaken by Knight Frank Saint-Petersburg ZAO unless specifically agreed otherwise in confirming
instructions and so stated within the main body of the valuation report.
1. Knight Frank St.Petersburg
Knight Frank Saint-Petersburg ZAO,
Liter A, 3B Mayakovskogo St., St Petersburg, 191025, Russia
2. Jurisdiction
Russian law shall apply in every respect in relation to the valuation and the agreement with the client which shall be deemed to
have been made in Russia (the Agreement). In the event of a dispute arising in connection with a valuation, unless expressly
agreed otherwise in writing by Knight Frank Saint-Petersburg ZAO, the client, and any third party using the valuation, will submit
to the jurisdiction of the Russian Courts only. This will apply wherever the property or the client is located or the advice is
provided.
3. Limitations on Liability
3.1. Our valuation is confidential to the party to whom it is addressed for the stated purpose and no liability is accepted to any
third party for the whole or any part of its contents. Liability will not subsequently be extended to any other party save on the
basis of written and agreed instructions; this may incur an additional fee. Except as set out in 3.2 below the terms of the
Agreement between Knight Frank Saint-Petersburg ZAO and the client are not enforceable by any third party.
3.2. No claim arising out of or in connection with the Agreement may be brought against any member, employee, partner or
consultant of Knight Frank Saint-Petersburg ZAO (each called a ‘Knight Frank Person’). Those individuals will not have a
personal duty of care to the client or any other party and any such claim for losses must be brought against Knight Frank
Saint-Petersburg ZAO.
3.3. Our maximum total liability for any direct loss or damage whether caused by our negligence or breach of contract or
otherwise is limited to Knight Frank Saint-Petersburg ZAO’s fee under the instruction set out in the Terms of Engagement
letter and the Agreement which will be sent to the client.
3.4. We do not accept liability for any indirect or consequential loss (such as loss of profits). Nothing in these Terms of Business
(or in our Terms of Engagement letter) shall exclude or limit our liability in respect of fraud or for death or personal injury
caused by our negligence or for any other liability to the extent that such liability may not be excluded or limited as a matter
of law.
4. Severance
If any provision of the Agreement is or becomes invalid, illegal or unenforceable, it shall be deemed modified to the minimum
extent necessary to make it valid, legal and enforceable. If such modification is not possible, the relevant provision shall be
deemed deleted. Any modification to or deletion of a provision under this clause shall not affect the validity and enforceability of
the rest of the Agreement.
If any provision is invalid, illegal or unenforceable, the parties shall negotiate in good faith to amend such provision so that, as
amended, it is legal, valid and enforceable and, to the greatest extent possible, achieve the intended commercial result of the
original provision.
5. Disclosure and Publication
Page 63
If our opinion of value is disclosed to persons other than the addressees of our report, the basis of valuation should be stated.
6. Complaints Procedure
If you have any concerns about our service, please raise them in the first instance with the valuer concerned. If this does not result
in a satisfactory resolution, please contact the relevant Head of Department. As required by RICS, we will send you a copy of our
Complaints Procedure on request.
7. Our Fees
The Fee terms are stipulated in the Agreement.
8. Disclosable Interests
We may offer the following services to prospective purchasers and similarly the services may be offered to them by another
organisation in circumstances where we may benefit financially: financial services, property letting and management services,
building construction, refurbishment and maintenance services and the sale of the prospective purchaser’s property.
9. RICS Valuation – Professional Standards - "The Red Book"
Valuations and appraisals will be carried out in accordance with the relevant edition of the RICS Valuation - Professional Standards
by valuers who conform to its requirements and with regard to relevant statutes or regulations. Compliance with The Red Book is
mandatory for Chartered Surveyors in the interests of maintaining high standards of service and for the protection of clients.
10. Monitoring
The valuation may be subject to monitoring under the RICS conduct and disciplinary regulations.
11. Valuation Basis
Valuations and appraisals are carried out on a basis appropriate to the purpose for which they are intended and in accordance
with the relevant definitions, commentary and assumptions contained in The Red Book. The basis of valuation will be agreed with
you in the letter covering the specific terms for the instruction.
12. Portfolios
Where requested to value a portfolio, unless specifically agreed with you otherwise, we will value the individual properties
separately, upon the assumption that the properties have been marketed in an orderly manner.
13. Land Register Inspection and Searches
We do not undertake searches or inspections of any kind (including web based searches) for title or price paid information in any
publicly available land registers.
14. Title and Burdens
We do not read documents of title although, where provided, we consider and take account of matters referred to in solicitor’s
reports or certificates of title. We would normally assume, unless specifically informed and stated otherwise, that each property
has good and marketable title and that all documentation is satisfactorily drawn and that there are no unusual outgoings,
planning proposals, onerous restrictions or local authority intentions which affect the property, nor any material litigation pending.
15. Disposal Costs and Liabilities
No allowance is made in our valuation for expenses of realisation or for taxation which may arise in the event of a disposal and our
valuation is expressed as exclusive of any VAT that may become chargeable. Properties are valued disregarding any mortgages or
other charges.
Page 64
16. Sources of Information
We rely upon the information provided to us, by the sources listed, as to details of tenure and tenancies (subject to 'Leases'
below), planning consents and other relevant matters, as summarised in our report. We assume that this information is complete
and correct.
17. Identity of Property to be Valued
We will exercise reasonable care and skill (but will not have an absolute obligation to you) to ensure that the property, identified
by the property address in your instructions, is the property inspected by us and contained within our valuation report. If there is
ambiguity as to the property address, or the extent of the property to be valued, this should be drawn to our attention in your
instructions or immediately upon receipt of our report.
18. Boundaries
Plans accompanying reports are for identification purposes only and should not be relied upon to define boundaries, title or
easements. The extent of the site is outlined in accordance with information given to us and/or our understanding of the
boundaries.
19. Planning, Highway and Other Statutory Regulations
Enquiries of the relevant Planning and Highways Authorities in respect of matters affecting the property, where considered
appropriate, are normally only obtained verbally or from a Local Authority web site, and this information is given to us, and
accepted by us, on the basis that it should not be relied upon. Written enquiries can take several weeks for response and incur
charges. Where reassurance is required on planning matters, we recommend that formal written enquiries should be undertaken
by the client’s solicitors who should also confirm the position with regard to any legal matters referred to in our report. We
assume that properties have been constructed, or are being constructed, and are occupied or used in accordance with the
appropriate consents and that there are no outstanding statutory notices.
We assume that the premises comply with all relevant statutory requirements including fire and building regulations.
20. Property Insurance
Our valuation assumes that the property would, in all respects, be insurable against all usual risks including terrorism, flooding and
rising water table at normal, commercially acceptable premiums.
21. Building Areas and Age
Where so instructed, areas provided from a quoted source will be relied upon. Where the age of the building is estimated, this is
for guidance only.
22. Structural Condition
Building, structural and ground condition surveys are detailed investigations of the building, the structure, technical services
and ground and soil conditions undertaken by specialist building surveyors or engineers and fall outside the normal remit of a
valuation. Since we will not have carried out any of these investigations, except where separately instructed to do so, we are
unable to report that the property is free of any structural fault, rot, infestation or defects of any other nature, including
inherent weaknesses due to the use in construction of deleterious materials. We do reflect the contents of any building survey
report referred to us or any defects or items of disrepair of which we are advised or which we note during the course of our
valuation inspections but otherwise assume properties to be free from defect.
23. Ground Conditions
We assume there to be no unidentified adverse ground or soil conditions and that the load bearing qualities of the sites of
each property are sufficient to support the building constructed or to be constructed thereon.
Page 65
24. Environmental Issues
Investigations into environmental matters would usually be commissioned of suitably qualified environmental specialists by
most responsible purchasers of higher value properties or where there was any reason to suspect contamination or a potential
future liability. Furthermore, such investigation would be pursued to the point at which any inherent risk was identified and
quantified before a purchase proceeded. Anyone averse to risk is strongly recommended to have a proper environmental
investigation undertaken and, besides, a favourable report may be of assistance to any future sale of the property. Where we
are provided with the conclusive results of such investigations, on which we are instructed to rely, these will be reflected in our
valuations with reference to the source and nature of the enquiries. We would endeavour to point out any obvious indications
or occurrences known to us of harmful contamination encountered during the course of our valuation enquiries.
We are not, however, environmental specialists and therefore we do not carry out any scientific investigations of sites or
buildings to establish the existence or otherwise of any environmental contamination, nor do we undertake searches of public
archives to seek evidence of past activities which might identify potential for contamination. In the absence of appropriate
investigations and where there is no apparent reason to suspect potential for contamination, our valuation will be on the
assumption that the property is unaffected. Where contamination is suspected or confirmed, but adequate investigation has
not been carried out and made available to us, then the valuation will be qualified by reference to appropriate sections of The
Red Book.
25. Leases
The client should confirm to us in writing if they require us to read leases. Where we do read leases reliance must not be
placed on our interpretation of these documents without reference to solicitors, particularly where purchase or lending against
the security of a property is involved.
26. Covenant
We reflect our general appreciation of potential purchasers' likely perceptions of the financial status of tenants. We do not,
however, carry out detailed investigations as to the financial standing of the tenants, except where specifically instructed, and
assume, unless informed otherwise, that in all cases there are no significant arrears of payment and that they are capable of
meeting their obligations under the terms of leases and agreements.
27. Loan Security
Where instructed to comment on the suitability of property as a loan security we are only able to comment on any inherent
property risk. Determination of the degree and adequacy of capital and income cover for loans is the responsibility of the
lender having regard to the terms of the loan.
28. Build Cost Information
Where our instruction requires us to have regard to build cost information, for example in the valuation of properties with
development potential, we strongly recommend that you supply us with build cost and other relevant information prepared
by a suitably qualified construction cost professional, such as a quantity surveyor. We do not hold ourselves out to have
expertise in assessing build costs and any property valuation advice provided by us will be stated to have been arrived at in
reliance upon the build cost information supplied to us by you. In the absence of any build cost information supplied to us, we
may have regard to published build cost information. There are severe limitations on the accuracy of build costs applied by this
approach and professional advice on the build costs should be sought by you. The reliance which can be placed upon our
advice in these circumstances is severely restricted. If you subsequently obtain specialist build cost advice, we recommend that
we are instructed to review our advice.
Page 66
29. Reinstatement Assessments
A reinstatement assessment for insurance purposes is a specialist service and we recommend that separate instructions are
issued for this specific purpose. If advice is required as a check against the adequacy of existing cover this should be specified
as part of the initial instruction. Any indication given is provided only for guidance and must not be relied upon as the basis for
insurance cover. Our reinstatement assessment should be compared with the owner’s and if there is a material difference, then
a full reinstatement valuation should be considered.
30. Comparable Evidence
Where comparable evidence information is included in our report, this information is often based upon our oral enquiries and
its accuracy cannot always be assured, or may be subject to undertakings as to confidentiality. However, such information
would only be referred to where we had reason to believe its general accuracy or where it was in accordance with expectation.
In addition, we have not inspected comparable properties.
31. Regulated Purpose Valuations (RPV)
RICS has established particular requirements in circumstances where a valuation although provided for a client may also be of
use to third parties, for instance, the shareholders in a company, defined by the RICS as “Regulated Purpose Valuations”.
When instructed in a continuing role as a Valuer it is Knight Frank Saint-Petersburg ZAO’s policy to rotate persons responsible
for valuations and the signatory to the report, on a seven yearly basis, unless specifically agreed otherwise.
Valuation Bases
1. Market Value (MV):
Market Value is defined as:
The estimated amount for which an asset or liability should exchange on the valuation date between a willing buyer and a
willing seller in an arm’s length transaction after proper marketing and where the parties had each acted knowledgeably,
prudently and without compulsion.
2. Market Rent (MR):
Market Rent is defined as:
The estimated amount for which a property would be leased on the valuation date between a willing lessor and a willing lessee
on appropriate lease terms in an arm’s length transaction, after proper marketing and where the parties had each acted
knowledgeably, prudently and without compulsion.
3. Fair Value
The definition of Fair Value adopted by the International Accounting Standards Board is:
The price that would be received to sell an asset, or paid to transfer a liability in an orderly transaction between market
participants at the measurement date.
4. Investment Value
Investment Value (or Worth) is defined as:
Investment Value is the value of an asset to the owner or a prospective owner for individual investment or operational
objectives.
5. Projected Market Value (PMV) of Residential Property only
Projected Market Value is designed to provide residential mortgage lenders with a simple numeric indication of the valuer’s
opinion of short-term market trends and is defined as:
The estimated amount for which a property is expected to exchange at a date, after the valuation date and specified by the
valuer, between a willing buyer and a willing seller, in an arm’s-length transaction, after proper marketing wherein the parties
had each acted knowledgeably, prudently and without compulsion.
Page 67
Appendix 2
Description of the Properties
Page 68
1. Kazanskaya 36
Property type
Operating office
Address
Litera , 36, Kazanskaya St., St Petersburg
Location
The Property is located in Admiralteysky District of St Petersburg within 10-minute walk
from Sadovaya, Spasskaya and Sennaya Ploschad metro stations, convenient transport
available. The following landmarks are situated in close proximity to the Property:
Palace Square, Hermitage Museum, Senatskaya Square, St. Kazansky Cathedral,
Kazanskaya Square, Nikolskaya Square, Teatralnaya Square and etc. The variety of
restaurants, bars, boutiques and stores are located on Nevsky Ave. Bolshoy Gostiny
Dvor Shopping Centre is located within a 20-minute walk of the Property.
Description
Image 1
Image 2
The Property comprises an office scheme building around a square courtyard with
vehicular access via the front facade. The five- to eight- floor scheme retains its historic
facade and provides partitioned class office accommodation with completed
finishing. There is internal parking for 6 parking spaces in the five-floor section. 15
open-air parking spaces are provided in the internal yard.
Page 69
Stage of
development
Completed
Development
Hold
strategy
Areas
Total building area –7,434 sq m;
GLA – 4,755.2 sq m (GLA Ratio – 64% of the total area);
Land plot – 0.25 hectares (2,526.4 sq m)
Tenure
Buildings – freehold (ownership certificates 78359968 dated June 10, 2014; 78-
359967 dated June 10, 2014; 78-
359971 dated June 10, 2014)
Land plot – freehold (ownership certificate 78-
359970 dated June 10., 78-
359969 dated June 10)
Tenancies
At the valuation date all the premises of the Property are leased by the companies
affiliated with LSR Group.
Valuation
considerations
Terms and Reversion Method and Comparative Method were applied.
Terms and Reversion Method considerations:
Average rental rate (Terms /Reversion period), rubles per sq m p.a.: 13,634/17,814;
Average OpEx, rubles per sq m p.a.: 3,114
Caprate (Terms /Reversion period): 10%/11%;
Comparative Method considerations:
Comparative method was based on the data of offers of comparable subjects. The
regression model was used to determine the Value.
Valuation date
December 31, 2015
Inspection date
December 28, 2015
Market value
569,208,000 RUB
Page 70
2. Zolotaya Kazanskaya
Property type
Operating office
Address
44, Kazanskaya St., St Petersburg
Location
The Property is located in Admiralteysky District of St Petersburg within 15-minutes
walk from Sadovaya, Spasskaya and Sennaya Ploschad metro stations, convenient
transport access available. The following landmarks are situated in close proximity to
the Property: Palace Square, Hermitage Museum, Senatskaya Square, St. Kazansky
Cathedral, Kazanskaya Square, Nikolskaya Square, Teatralnaya Square and etc. The
variety of restaurants, bars, boutiques and stores are located on Nevsky Ave. Bolshoy
Gostiny Dvor Shopping Centre is located within a 20-minute walk of the Property.
Image 3
Description
Image 4
The Property comprises an office scheme building around a square courtyard with
vehicular access via the front facade. The five-floor scheme retains its historic facade
and provides partitioned class office accommodation fully fitted out. There is a
parking for 10 cars in the internal yard.
Page 71
Stage of
development
Completed
Development
Hold
strategy
Areas
Total building area –3,060.6 sq m;
Land plot – 0.15 hectares (1,475 sq m)
Tenure
Buildings – freehold (ownership certificates 78-
055289 dated September 4, 2013;
7878-
055287 dated September 4, 2013; 78055408 dated September 4, 2013; 78-
78-
055401 dated September 4, 2013; 78-
78-
7878-
78-
78-
7878-
78-
78-
7878-
78-
78-
479049 dated September 2, 2014)
Tenancies
Valuation
considerations
Valuation date
December 31, 2015
Inspection date
December 28, 2015
Market value
282,476,000 RUB
Page 72
3. Paradny Kvartal BC 11
Property type
Operating office
Address
liter A, 39, Kirochnaya St, St Petersburg
Location
The office center is located in Central District of St Petersburg, it takes 10 minutes to
walk from Chernyshevskaya metro station. The access to the Property is provides from
Paradnaya St. or Kirochnaya St. The proximity of main thoroughfares such as
Suvorovskiy Ave, Nevsky Ave, Ligovsky Ave, Voskresenskaya and Smolnaya
Embankments provides easy access the Property from various parts of the city. The
following landmarks are situated in the surroundings of the Property: Tavrichesky
Garden and Palace, Smolny Cathedral, Suvorov Museum. Paradny Kvatal is a mixed-use
complex. It is implied the residents will access the diverse infrastructure of this
residential complex consisting of stores, supermarkets, educational facilities and a
fitness center nearby.
Image 5
Image 6
Page 73
Description
At the valuation date the Property comprises the office complex (3 floors above ground
and 1 underground) with a preserved historic facade. The building was built in 18021805 years and after reconstruction in 2010 bacame a part of Paradny Kvartal mixedused complex. At the valuation date the Property is used by the owner (LSR group). The
construction scheme, the floor layouts and the finishing of the Property matches
standards of A-class business center.
Stage of
Completed
development
Development
Hold
strategy
Areas
Land plot – 9.57 hectares (the part of the land plot related to the Property is not
isolated)
Tenure
Building – freehold (ownership certificates 7878-
837256 dated February 8, 2013; 78837258 dated February 8, 2013; 78-
Tenancies
837255 dated February 8, 2013;
837257 dated February 8, 2013; 78-
837259 dated February 8, 2013; 78-
837380 dated February 8, 2013; 78-
837381 dated February 8, 2013; 78-
837382 dated February 8, 2013; 78-
837383 dated February 8, 2013; 78-
837384 dated February 8, 2013; 78-
837385 dated February 8, 2013; 78-
837400 dated February 8, 2013; 78-
837386 dated February 8, 2013; 78-
837387 dated February 8, 2013; 78-
837388 dated February 8, 2013; 78-
837389 dated February 8, 2013; 78-
837390 dated February 8, 2013; 78-
837391 dated February 8, 2013; 78-
837392 dated February 8, 2013; 78-
837393 dated February 8, 2013; 78-
837394 dated February 8, 2013; 78-
837395 dated February 8, 2013; 78-
837396 dated February 8, 2013; 78-
837397 dated February 8, 2013; 78-
837399 dated February 8, 2013)
Valuation
considerations
Valuation date
December 31, 2015
Page 74
Inspection date
December 23, 2015
Market value
426,407,000 RUB
Page 75
4. Kazanskaya 60
Property type
Operating office
Address
liter A, 18, Fonarny lane, St Petersburg
Location
The Property is located in Admiralteysky District of St Petersburg within a 10-minute
walk from Sadovaya/Spasskaya/Sennaya Ploschad metro stations. The entrance to the
office center is available from Kazanskaya St. The Property is easily accessible from the
main thoroughfares of the district such as Nevsky Ave, Sadovaya St. and Fontanka River
Embankment. The main landmarks of the city are situated in the neighbourhood of the
Property: Hermitage Museum, Palace Square, Admiralty, Senatskaya Square, Kazansky
Cathedral, Kazanskaya Square, Nikolskaya Square and Teatralnaya Square. A great
number of restaurants, bars, boutiques and stores are located in the neighborhood.
Image 7
Description
Image 8
The Property comprises an office center complex with vehicular access via the front
facade. The 6-floor scheme (6 floors on one side and 5 floors with mansard on the
other) retains its historic facade and provides partitioned class
office with completed
finishing.
Page 76
Stage of
development
Completed
Development
Hold
strategy
Areas
isolated)
Tenure
Buildings – freehold (ownership certificates 78-AZ 113626 dated October 9, 2013;
78-AZ 113628 dated October 9, 2013; 78-AZ 304014 dated February 21, 2014; 78351209 dated November 24, 2011; 7878-
351361 dated November 24, 2011; 78-
2011; 78-
351516 dated November
351953 dated November 18, 2011; 78-
December 20, 2011; 78April 4, 2012; 7878-
351514 dated November 11,
351515 dated November 11, 2011; 78-
11, 2011; 78-
2012; 78-
351210 dated November 24, 2011;
418336 dated January 11, 2012; 78-
518971 dated April 7, 2012; 78-
629149 dated June 9, 2012; 78-
419033 dated January 30, 2012; 78518130 dated April 7, 2012; 78-
dated April 7, 2012; 78-
417754 dated
518398 dated
580081 dated May 22,
750904 dated October 17, 2012;
419213 dated February 1, 2012; 78-
518131 dated April 7, 2012; 78-
630698 dated July 31, 2012; 78-
518132
751253 dated
November 10, 2012)
Tenancies
Valuation
considerations
Valuation date
December 31, 2015
Inspection date
December 28, 2015
Market value
237,820,000 RUB
Page 77
5. Ruchyi/Tsvetnoy Gorod
Property type
Held for future development
Address
145, Piskarevsky Av., St Petersburg
Location
The Property located at the North-East of St Petersburg, along the border with
Leningradskaya Oblast’. The surrounding area consists of former agricultural land plots,
private cottages and territories of new residential development. The infrastructure of
this area is not developed, but all the projects of complex development imply the
construction of infrastructure objects.
The immediate proximity of St Petersburg Ring road and Piskarevsky Ave provides easy
access to the Property from other districts of the city.
Public transport accessibility at the valuation date is unsatisfactory but due to current
residential development of this district the situation with public transport will be
improved in process of completing projects.
Image 9
Image 10
Page 78
Description
At the valuation date the land plots are vacant of any improvements. The project is
currently in the design and survey stage. Pre-construction works are being held at
a part of land plots.
The future housing complex will consist of residential buildings of different number of
floors with integrated commercial premises, multilevel aboveground ventilated parking,
and social facilities: 8 schools, 16 kindergartens, 4 clinics and 1 hospital.
The construction stage of the 1st phase is planned to start in 2016.
Stage of
development
Design/Concept development
Development
Build and sell
strategy
Areas
Total buildings area –5,458,098 sq m;
NSA (excluding parking) – 2,960,380 sq m;
Residential premises area – 2,509,690 sq m;
Commercial premises area – 450,690 sq m;
Parking – 25,686 parking lots/321,075 sq m;
Land plot – 429.29 hectares
Tenure
Land plots – freehold (ownership certificates: 7878-
868643 dated February 20, 2013; 78-
602858 dated October 25, 2014; 78dated February 20, 201378-
868654 dated February 20, 2013; 78-
602859 dated October 25, 2014; 78-
603174 dated November 14, 2014; 78-
868716
603175 dated
November 14, 2014;, 78-
603193 dated November 14, 2014; 78-
603194 dated
November 14, 2014; 78-
603044 dated November 14, 2014; 78-
603171 dated
November 14, 2014; 78-
603046 dated November 14, 2014; 78-
603172 dated
November 14, 2014; 78-
603048 dated November 14, 2014; 78-
603113 dated
November 14, 2014; 78-
603114 dated November 14, 2014; 78-
603115 dated
November 14, 2014; 78-
603116 dated November 14, 2014; 78-
603117 dated
November 14, 2014; 78-
603118 dated November 14, 2014; 78-
603119 dated
November 14, 2014; 78-
603120 dated November 14, 2014; 78-
603121 dated
November 14, 2014; 78-
603122 dated November 14, 2014; 78-
603123 dated
November 14, 2014; 78-
603173 dated November 14, 2014; 78-
603050 dated
November 14, 2014; 78-
603051 dated November 14, 2014; 78-
603052 dated
November 14, 2014; 78-
603053 dated November 14, 2014; 78-
603054 dated
November 14, 2014; 78-
603055 dated November 14, 2014; 78-
603056 dated
November 14, 2014; 78-
603057 dated November 14, 2014; 78-
603058 dated
November 14, 2014; 78-
603059 dated November 14, 2014; 78-
603060 dated
November 14, 2014; 78-
603104 dated November 14, 2014; 78-
603105 dated
November 14, 2014; 78-
603106 dated November 14, 2014; 78-
603107 dated
November 14, 2014; 78-
603108 dated November 14, 2014; 78-
603109 dated
November 14, 2014; 78-
603110 dated November 14, 2014; 78-
603111 dated
Page 79
November 14, 2014; 78February 20, 2013; 782011; 7878-
603112 dated November 14, 2014; 78234734 dated June 01, 2011; 78-
234623 dated June 01, 2011; 78-
234733 dated June 01, 2011; , 78-
868652 dated
234732 dated June 01,
868659 dated February 20, 2013; 78-
868715 dated February 20, 2013; 78-
868714 dated February 20, 2013; 78-
868713 dated February 20, 2013; 78-
868712 dated February 20, 2013; 78-
868711 dated February 20, 2013; 78-
868644 dated February 20, 2013; 78-
327802 dated September 13, 2011; 78868723 dated February 20, 2013; 78dated July 3, 2015; 78-
868777 dated February 21, 2013; 78095584 dated July 3, 2015; 78-
095586 dated July 3, 2015; 78-
095585
095596 dated July 3,
2015)
Valuation
Applied method(-s) of valuation: Residual (DCF);
considerations
Construction start/completion dates: April 2016/December 2025;
Sales start/completion dates: June 2016/December 2025;
Number of phases: 17 (Valuer’s forecast according to tempo of sales);
Estimated costs after the valuation date: 154,593,711,000 RUB
Prices per sq m or parking unit: (residential (17th block): 57,000 RUB; residential
(other): 60,000 RUB; commercial premises: 100,000 RUB; parking: 350,000 RUB)
Estimated Revenue (in current prices): 204,340,500,000 RUB
Discount Rate: 27.66%
Valuation date
December 31, 2015
Inspection date
December 23, 2015
Market value
10,492,929,000 RUB
Page 80
6. Smolny Park
Property type
Elite class residential
Address
Liter A, 4, Smolnogo St., St Petersburg
Location
The Property is located in the Central Administrative District of St Petersburg, on
Smolnogo St., within a 25-minute walk from Chernyshevskaya metro station. The
Property is situated in the historical centre of the city, a short distance from
Shpalernaya St. and Suvorovsky Ave that provide direct access to Vosstaniya Square
and Nevsky Prospect (approx., 3.3 km from the Property), and borders Smolnaya
Embankment. The Smolny Cathedral, Alexander Institute for Noble Maidens, the Parter
Garden with fountains comprises the immediate surroundings of the Property.
The existing amenities will be further improved by retail premises on the ground floors
of the Smolniy Park residential buildings and of the Basel
, where a supermarket and
a fitness-centre are planned. The scheme will provide residential accommodation in a
quiet park zone in the very centre of the city with educational institutions nearby.
Description
Page 81
Image 11
Image 12
Elite-class residential complex of 14 buildings, 4 of which are reconstructed buildings of
historical value. The scheme varies in height between 1 and 8 above ground floors with
3-3.45 m ceiling height, comprises office and retail space, and an underground car park
with 1025 car spaces and elevators connecting parking and apartments.
Stage of
Completed/construction
development
Development
Build and sell
strategy
Areas
Total buildings area –131,411 sq m (Ph.2: 40,032 sq m; Ph.3: 49,844 sq m; Ph.4:
41,535 sq m);
NSA (excluding parking)– 73,179 sq m (Ph.2: 24,503 sq m; Ph.3: 22,949 sq m; Ph.4:
25,727 sq m);
Residential premises area – 63,032 sq m (Ph.2: 22,667 sq m; Ph.3: 22,949 sq m; Ph.4:
17,417 sq m);
Commercial premises area – 10,146 sq m (Ph.2: 1,837 sq m; Ph.3: 0 sq m; Ph.4: 8,310
sq m);
Parking – 849 parking lots/10,612.5 sq m (Ph.2: 245 lots; Ph.3: 489 lots; Ph.4: 115
lots);
Available residential premises area – 15,483 sq m (Ph.2: 2,289 sq m; Ph.3: 1,054 sq m;
Ph.4: 12,139 sq m);
Available commercial premises area – 8,275 sq m (Ph.2: 771 sq m; Ph.3: 0 sq m; Ph.4:
7,504 sq m);
Available parking lots – 483 parking lots (Ph.2: 81 lots; Ph.3: 287 lots; Ph.4: 115 lots).
Land plots – 8.65 hectares.
Tenure
Land plots – leasehold (lease agreement on investment terms 20/ZK-02037 dated
June 24, 2004; Addendumdated July 18, 2006; Addendusq m dated December 28,
2006; Addendumdated September 6, 2007; Addendum4 dated August 20, 2009;
Addendum5 dated May 12, 2010)
Valuation
considerations
Construction start/completion dates: March 2012/December 2016;
Sales start/completion dates: July 2012/December 2018
Stage of development: Ph.2, Ph.3 – completed; Ph.4 – construction;
Number of phases: 3 (according to provided data);
Estimated costs after the valuation date: 781,059,000 RUB
Prices per sq m or parking unit: residential Ph.2: 300,000 RUB; residential Ph.3:
270,000 RUB; residential Ph.4: 300,000 RUB; commercial Ph.2: 150,000 RUB;
commercial Ph.4: 133,175 RUB; parking: 2,100,000 RUB
Estimated Revenue (in current prices): 8,165,313,000 RUB (including
1,422,754,000 RUB for bargains before December 31, 2015);
Page 82
Valuation date
December 31, 2015
Inspection date
December 23, 2015
Market value
5,581,203,000 RUB
Page 83
7. Radishcheva 39
Property type
Elite Class Residential
Address
39 Litera M, Radishcheva St., St Petersburg
Location
The Property is located in the Central District of St Petersburg, within a 10-minute walk
from Chernyshevskaya metro station. The Property borders the mix-used complex of
“Paradny Kvartal” and is logical extension of its concept. The landmarks and recreation
subjects in the surrounding are Tavrichesky Garden, Tavrichesky Palace, Suvorov
Museum. Also a number of educational facilities are in close proximity to the Property.
Description
Image 13
Image 14
Mixed use complex of 8 above ground and 1 underground floors comprising elite-class
residential with 148 app., office and retail space, and an underground car park for 189
car spaces. The Property comprises a regularly shaped land plot. The complex has
neoclassic style façade made as individual design project.
Stage of
Completed
development
Page 84
Development
Sell
strategy
Areas
Total buildings area –31,923 sq m;
NSA (excluding parking)– 20,879 sq m;
Residential premises area – 18,768 sq m;
Other premises area (self-storage) – 112.6 sq m;
Parking – 197 parking lots/2,367 sq m;
Available residential premises area – 444 sq m;
Available commercial premises area – 989 sq m;
Available other premises area (self-storage) – 70 sq m;
Available parking lots – 22 parking lots.
Tenure
Land plot – freehold (ownership certificates 78
Valuation
considerations
Construction start/completion dates: February 2013/August 2015;
11435 dated August 31, 2006)
Sales start/completion dates: October 2012/December 2018;
Stage of development: Completed;
Number of phases: 1;
Estimated costs after the valuation date: 0 RUB
Prices per sq m or parking unit: (residential: 300,000 RUB; commercial: 140,000 RUB;
parking: 2,100,000 RUB)
Estimated Revenue (in current prices): 448,121,000 RUB (including 130,265,000 RUB
for bargains before December 31, 2015);
Valuation date
December 31, 2015
Inspection date
December 23, 2015
Market value
409,193,000 RUB
Page 85
8. Verona
Property type
Address
Litera A, 29, Morskoy Ave , St Petersburg
Location
The Property is located in Petrogradsky District of St Petersburg, in the central part of
Kresotvsky Island and is within a 5-minute walk from Krestovsky Ostrov metro station.
The surrounding of the land plot is represented by elite residential complexes. There is
a park zone a short walking distance to the east of the Property. Also the landmarks in
the neighborhood are Elagin Palace, Divo-Ostrov entertainment park, two yacht-clubs,
restaurants, sporting and educational facilities. The construction of the new Zenit
football team stadium is underway in the eastern part of Krestovsky Island.
Description
Image 15
Mixed-use complex comprising 80 elite-class residential premises with 3-3.2 m ceiling
height, office and retail premises with practical layout, and an underground car park for
90 car spaces. . The Property comprises the modern security system, business-grade
Page 86
elevators and modern building engineering systems.
Stage of
Construction
development
Development
Sell
strategy
Areas
Available residential premises area – 5,195 sq m;
Tenure
029869 dated November 18,
2010)
Valuation
considerations
Construction start/completion dates: August 2015/August 2017;
Sales start/completion dates: December 2014/December 2019;
Prices per sq m or parking unit: (residential: 350,000 RUB; commercial: 240,000 RUB;
Valuation date
December 31, 2015
Inspection date
December 23, 2015
Market value
1,557,785,000 RUB
Page 87
9. Kovensky
Property type
Address
Litera A, 5, Kovenskiy Line, St Petersburg
Location
The Property is located in the Central District of St Petersburg within a 10-minute walk
of Mayakovskaya, Ploshchad Vosstaniya and Chernischevskaya metro stations. The
immediate neighborhood of the Property is comprised of historical buildings (such as
the Madonna of Lurd catholic church, Golitsyn princes’ house (Kovensky, 1)). Nevsky
Prospect, St.Petersburg's prime retail street with its numerous restaurants, cafes, shops,
museums and exhibition halls is located within a 10-minute walking distance from the
Property. There are two large shopping centres – Nevsky Center and Galeria - are
located close to Ploshchad Vosstaniya, within a 20-minute walk of the Property. This
part of the city is also rich in educational amenities from kindergartens and leisure
centres to higher education institutions.
Description
Page 88
Image 16
Image 17
Mixed-use office and residential complex of 5 above floors comprising elite-class
apartments, office, retail premises and a car parking.
Stage of
Completed
development
Development
Sell
strategy
Areas
Retail premisesarea – 148.6 sq m;
Parking – 42 parking lots/726 sq m;
Tenure
Land plot – freehold (ownership certificate)
Valuation
considerations
Construction start/completion dates: June 2011/April 2013;
Sales start/completion dates: August 2011/June 2016;
Prices per sq m or parking unit: (commercial: 150,000 RUB; parking: 1,900,000 RUB)
Valuation date
December 31, 2015
Inspection date
December 23, 2015
Market value
137,496,000 RUB
Page 89
10. Dom na Dvoryanskoy
Property type
Address
liter , 13, Kuybysheva St, St Petersburg
Location
The Property is located in the Petrogradsky District of St Petersburg, it takes 10-min
walking to reach the Property from Gorkovskaya metro station. This exact area is where
St Petersburg was initially founded, a lot of beautiful and historical buildings are
situated here. St Petersburg's most gorgeous landmarks such as Peter and Paul's
Fortress (often named "the heart of the city") with its Cathedral, Aurora cruiser,
St Petersburg Cathedral Mosque, and recreational facilities (Summer Garden and
Marsovo Pole) are located nearby. Also the Artillery museum, St Petersburg's zoo and
Planetarium, the Music hall, Entertainment center Velican Park, a few theatres and
cinemas create the great cultural and entertainment infrastructure. The Business
Centres, educational facilities, restaurants and stores are highly concentrated in the
neighborhood as well.
Description
Page 90
Image 18
Image 19
"Dom na Dvoryanskoy" is an elite-class residential 8-floor building with two main
entrances and 57 apartments. The style of the complex can be described as modern,
the same as the other buildings in the area. The curved shape of window openings on
the upper floors and ornaments in facades add expressiveness and emphasize the style
of affiliation. Huge windows let in plenty of light: this method is actively used the
outstanding architects of the late XIX century.
Stage of
development
Completed
Development
Sell
strategy
Areas
Total buildings area – 8,787 sq m;
Commercial premises area – 743 sq m;
Parking – 35 parking lots/437.5 sq m;
Tenure
Valuation
considerations
Land plot – freehold ( ownership certificate 78
953380 dated March 05, 2009)
Construction start/completion dates: February 2013/June 2015;
Sales start/completion dates: August 2011/December 2017;
Prices per sq m or parking unit: (residential: 190,000 commercial: 140,000 RUB;
Valuation date
December 31, 2015
Inspection date
December 23, 2015
Market value
311,601,000 RUB
Page 91
11. Osobnyak Truvorova
Property type
Address
liter A, 64, Martynova Emb., St Petersburg
Location
Osobnyak Truvorova has the premium location for elite residential property in
St Petersburg – on Krestovsky island. A lot of high-end real estate is concentrated here.
The main advantages of the place are comfortability, calmness and safety due to the
extended park area located in immediate proximity. Many cafes, restaurants, sports
facilities (for instance, courts for lawn tennis, football fields, etc.), entertainment services
are situated in the neighborhood.
Image 20
Description
The mansion that belonged to Askalon Truvorov, famous St Petersburg archeografer,
was built in the neoclassical style on Krestovsky Island in 1893 by architect Rukteshel.
Osobnyak Truvorova was renovated with care for its historic appearance. It has its own
landscaped area, separated from Martynova Emb. The main facade overlooks
Page 92
Srednyaya Nevka embankment and Elagin Island. The building looks impressive: the
front facade is decorated with columns and mascarons (lion masks), large arched
windows. The building is colored in light yellow. The Property may have a different
purpose of use – from the comfortable living residence to an apartment of class de
luxe, as well as any commercial purpose. The house consists of 3 floors including the
basement.
Stage of
Completed
development
Development
Sell
strategy
Areas
Building – 1,212 sq m
Tenure
Valuation
considerations
The Client hasn’t provided us with any Title Documents. In accordance with the
information of the Client type of the tenure for land plot and the building –freehold
Applied method(-s) of valuation: Comparative Method;
Valuation date
December 31, 2015
Inspection date
December 23, 2015
Market value
520,000,000 RUB
Page 93
12. Russkiy dom (Baskov)
Property type
Address
5/5A, Korolenko St., St Petersburg
Location
The Property is located in the Central District of St Petersburg within a 10-minute walk
from Chernyshevskaya metro station. The proximity of main thoroughfares such as
Nevsky Ave, Ligovsky Ave, Voskresenskaya and Smolnaya Embankments provides easy
access the Property from various parts of the city.
The Property is surrounded by the administrative buildings built in the 18th-19th
centuries, many of which are of historical value. The largest orthodox church in the city,
Spaso-Preobrazhensky Cathedral is in close proximity to the Property.
Image 21
Description
A land plot with an elite residential complex under construction. The object is planned
to be completed in 2017. Compositional decision of the project is based on a
Page 94
combination of open pedestrian area and two spacious private courtyards. The core of
the composition is the courtyard space visually opened to Baskov Lane. Dynamic
silhouette, expressiveness of the facade composition, the presence of bay windows,
towers allow the new complex to become an organic element of the existing historic
look of the city.
Stage of
Construction
development
Development
Build and sell
strategy
Areas
Total building area – 93,725 sq m;
Commercial premises area – 6,931sq m;
Available commercial premises area – 3,877 sq m;
Land plots – 2.4 hectares
Tenure
Land plots – freehold (ownership certificate)
Valuation
considerations
Construction start/completion dates: April 2015/December 2017;
Sales start/completion dates: December 2014/July 2019;
Prices per sq m or parking unit: (residential: 215,000 commercial: 190,000 RUB;
Valuation date
December 31, 2015
Inspection date
December 23, 2015
Market value
2,706,390,000 RUB
Page 95
13. Europa City
Property type
Business class residential
Address
Litera
, 10, Medikov Ave, St Petersburg
Location
The Property is located to the north-east of the Petrogradsky District of St Petersburg,
within a 10-minute walk from Petrogradskaya metro station. The project has a good
transport accessibility from vary districts of the city due to the main thoroughfares of
Petrogradsky District – Medikov Ave, Kamennoostrovsky Ave and Bolshoy
Petrogradskoi Storony Ave, Aptekarskaya Embankment. The major arterial routes of
Petrogradsky District have a large number of retail shops, restaurants, cinemas and
modern business centers. Botanical Garden and Lopuhinskiy Garden are within a 10minute walk from the site.
Image 22
Description
Image 23
Business-class residential complex comprising 17 residential buildings of varied height
(9 and 14 floors), some of which comprise ground floor commercial premises. The
construction of the housing divided into 4 Phases. At the valuation date the 1st, the 2nd
and the 3rd phases have been constructed, the 4th phase is being constructed. The
project includes a kindergarten, an underground car park, a surface parking and green
Page 96
areas with a unique landscape design.
Stage of
Completed/construction
development
Development
Build and sell
strategy
Areas
Total buildings area –135,554 sq m (Ph.3: 70,109 sq m; Ph.4: 65,445 sq m);
NSA (excluding parking)– 84,259 sq m (Ph.3: 42,674 sq m; Ph.4: 41,585 sq m);
Residential premises area – 71,829 sq m (Ph.3: 36,743 sq m; Ph.4: 35,086 sq m);
Commercial premises area – 11,933 sq m (Ph.3: 5,434 sq m; Ph.4: 6,499 sq m);
Self-storage premises area – 497 sq m (only within the 3rd phase);
Parking – 492 parking lots/6,150 sq m (Ph.3: 303 lots; Ph.4: 189 lots);
Available residential premises area – 43,103 sq m (Ph.3: 10,087 sq m; Ph.4:
33,016 sq m);
Available commercial premises area – 1,739 sq m (Ph.3: 358 sq m; Ph.4: 1,381 sq m);
Available self-storage premises area – 497 sq m (only within the 3rd phase);
Available parking lots – 378 parking lots (Ph.3: 189 lots; Ph.4: 189 lots);
Tenure
Valuation
considerations
Construction start/completion dates: March 2012/September 2017 ;
570124 dated June 26, 2012)
Sales start/completion dates: May 2014/December 2018;
Stage of development: Ph.1, Ph.2, Ph.3, – completed; Ph.4 – construction;
Number of phases: 4 (according to provided data);
120,000 RUB; commercial Ph.3: 160,000 RUB; commercial Ph.4: 140,000 RUB; self
storage: 40,000 RUB, parking: 1,450,000 RUB
Valuation date
December 31, 2015
Inspection date
December 23, 2015
Market value
4,374,548,000 RUB
Page 97
14. Tri Vetra
Property type
Address
Plot 151, Block 66a, Savushkina St., St Petersburg
Location
The Property is located in the Primorsky District of St Petersburg. The neighborhood of
the Property includes new built housing complexes, shopping centers, hypermarkets.
Despite of the location in the district with a difficult transport accessibility, the Property
has a beneficial location due to the proximity to the new thoroughfare – West highspeed Diameter (ZSD).
The other benefit of the Property location is the proximity to the Gulf of Finland. The
city park (“Park 300-letiya Sankt-Peterburga”) is in 10-minutes walk from the Property.
The closest metro station - Staraya Derevnya is in 10-minutes drive by public transport
from the Property.
Image 24
Page 98
Description
Business class residential complex comprising 3 residential 13-floor buildings including
in total 758 apartments. The Property comprises commercial premises, an underground
parking and two multilevel above ground parking buildings for 703 parking spaces in
total.
Stage of
Construction
development
Development
strategy
Areas
Build and sell
Self-storage premises area – 801 sq m;
Available self-storage premises area – 801 sq m;
Tenure
Land plots – leasehold (land lease agreement 17/
-03630 dated January 20, 2006,
and #2 dated September 1, 2011)
Valuation
considerations
Construction start/completion dates: June 2015/June 2018 ;
Sales start/completion dates: April 2015/December 2018;
Prices per sq m or parking unit: residential: 120,000 RUB; commercial: 150,000 RUB;
self storage: 65,000 RUB, parking: 923,948 RUB)
Valuation date
December 31, 2015
Inspection date
December 23, 2015
Market value
2,415,881,000 RUB
Page 99
15. Moskovskoye Shosse, 3
Property type
Address
liter , Moscovskoye Hw., St Petersburg
Location
Moskovskoye
Shosse 3
The Property is located in Moskovsky District of St Petersburg, at the crossroads of
Moskovskoye Highway and Dunaisky Ave. "Moskovskoye Shosse 3" is located in 15
minutes walk from Zvezdnaya metro station. Moskovskoye and Pulkovskoye Highways
provide easy and direct access both to the city center and to the areas beyond the
St Petersburg ring road, and to Pulkovo Airport also. Dunaysky Ave is also an important
thoroughfare connecting the south districts of the city.
The commercial infrastructure of the neighborhood is represented by hypermarkets
(Lenta, O'Key, METRO Cash & Carry, OBI, Castorama). In the proximity to the Property
two new shopping and entertainment centers are located – Kontinent and Torgovy
Dvor. Park Gorodov Geroyev, a large green area with a pond, is only 100 m from the
Property.
Image 25
Image 26
Page 100
Description
At the valuation date the residential complex is being constructed. The business class
residential complex comprises 89 residential premises, parking for 81 cars, self-storage
premises. The Property is located at its own land plot closely to Viva housing complex,
but belongs to the higher class. Proximity to the housing complex of Viva makes its
infrastructure available.
Stage of
Construction
development
Development
Build and sell
strategy
Areas
Parking – 81 parking lots/1,012.5 sq m;
Land plot – 0.41 hectares (the Property is on the land plot of Viva housing complex
with the total area of 1.15 hectares)
Tenure
910247 dated March 25, 2013)
Valuation
considerations
Construction start/completion dates: August 2015/December 2017;
Sales start/completion dates: September 2015/June 2018;
Prices per sq m or parking unit: residential: 182,070 RUB; self storage: 100,000 RUB,
231,296,000 RUB for bargains before December 31, 2015);
Valuation date
December 31, 2015
Inspection date
December 23, 2015
Market value
666,152,000 RUB
Page 101
16. Bogemia
Property type
Address
14, Smolenskaya St, St Petersburg
Location
Bogemia complex is located in Moskovsky District of St Petersburg, within 7 min walk
of Frunzenskaya metro station. "Bogemia" is situated in close proximity to Moskovsky
Ave - one of the main thoroughfares of the city, but at the same time it is in a quiet
area of Smolenskaya St., far from the bustle of the city noises. In recent years
Moskovsky district became a business district due to a lot of new constructed business
centers. On the other side there are respectable residential blocks located along
Moskovsky Ave. The infrastructure was mainly formed long time ago, so it is convenient
to live there closely to shops, supermarkets, entertainment of all kinds, etc.
Page 102
Image 27
Description
The business class residential complex is to be constructed in 2018, currently there are
old buildings on the land plot. The existing buildings will be demolished within the
development process. The new building will have from 7 to 14 floors, 228 apartments, a
few of the apartments will comprise the large terraces. Wide halls and corridors, large
windows, high ceilings - these all are advantages of grand neoclassical building. In front
of the house there will be nice courtyard. For vehicles of residents "Bohemia" will
provide underground parking for 154 cars. On the ground floor the commercial
premises will be located.
Stage of
development
Design
Development
Build and sell
strategy
Areas
Total buildings area (of the future buildings) – 34,352 sq m;
Tenure
Valuation
considerations
978449 dated June 14, 2013)
Construction start/completion dates: April 2015/September 2018;
Sales start/completion dates: November 2015/August 2019;
Prices per sq m or parking unit: residential: 133,819 RUB; commercial: 120,000 RUB,
Valuation date
December 31, 2015
Inspection date
December 23, 2015
Market value
855,495,000 RUB
Page 103
17. Yuzhnaya Aquatoriya
Property type
Mass-market residential
Address
Block 28, 28a, Doblesti St, St Petersburg
Location
The Property is located in the northwestern part of Krasnoselsky District of
St Petersburg, in the block bordered with Marshala Kazakova St., Doblesti St., Leninsky
Ave., Geroyev Ave and also in the planned block bordered with Marshala Kazakova St.,
Geroyev Ave., Leninsky Ave., Patriotov Ave. The neighborhood is not serviced by metro
stations, the nearest metro stations - Leninsky Prospekt and Prospect Veteranov are
located in 6 km from the Property. The new metro station, Prospekt Geroev, is planned
to be built by 2025 in close proximity to the Property.
Image 28
Description
Image 29
Mass-market residential complex consists of several residential buildings of 7 - 25
floors with commercial premises, a multilevel above ground parking, and a guest
parking zone. The complex comprises sport outside facilities, children playgrounds,
Page 104
promenades and green zones. At the valuation date the construction is held on plots
No 1, 6, 9, 13, 2, the buildings on plot 14 are completed and commissioned.
Stage of
development
Construction
Development
Build and sell
strategy
Areas
NSA (excluding parking)– 318,279 sq m (Plot 13: 39,004 sq m, Plot 14: 63,576 sq m,
Plot 24: 25,000 sq m, Plot 9: 56,548 sq m, Plot 1: 12,000 sq m, Plot 2: 90,645 sq m,
Plot 6: 31,507 sq m);
Residential premises area – 295,087 sq m (Plot 13: 38,759 sq m, Plot 14: 61,750 sq m,
Plot 24: 25,000 sq m, Plot 9: 52,129 sq m, Plot 1: 10,889 sq m, Plot 2: 75,220 sq m,
Plot 6: 31,340 sq m);
Commercial premises area – 23,192 sq m (Plot 13: 245 sq m, Plot 14: 1,826 sq m,
Plot 24: 0 sq m, Plot 9: 4,418 sq m, Plot 1: 1,111 sq m, Plot 2: 15,425 sq m, Plot 6:
167 sq m);
Parking – 2,509 parking lots/32,112.5 sq m (Plot 13: 300 lots, Plot 14: 600 lots, Plot
24: 300 lots, Plot 9: 334 lots, Plot 1: 75 lots, Plot 2: 600 lots, Plot 6: 300 lots);
Available residential premises area – 124,158 sq m (Plot 13: 1,710 sq m, Plot 14: 912
sq m, Plot 24: 25,000 sq m, Plot 9: 28,667 sq m, Plot 1: 759 sq m, Plot 2: 65,811 sq m,
Plot 6: 1,300 sq m);
Available commercial premises area – 17,582 sq m (Plot 13: 0 sq m, Plot 14:
108 sq m, Plot 24: 0 sq m, Plot 9: 2,018 sq m, Plot 1: 848 sq m, Plot 2: 14,609 sq m,
Plot 6: 0 sq m);
Available parking lots – 2,464 parking lots (Plot 13: 300 lots, Plot 14: 600 lots, Plot
24: 300 lots, Plot 9: 334 lots, Plot 1: 30 lots, Plot 2: 600 lots, Plot 6: 300 lots).
Tenure
Land plots – leasehold (lease agreement 08-
-02441 dated December 2, 2013,,
08-
-02442 dated December 2, 2013, 08-
-02443 dated December 2, 2013,
0808-
-02444 dated December 2, 2013, 08-02446 dated December 2, 2013, 08-
08-
08-
08-
-02450 dated December 2, 2013, 08-
-02453 dated December 2,
2013, 082013, 08-
-02454 dated December 2, 2013, 08-02451 dated December 2, 2013, 08-
2013, 08-
-02455 dated December 2, 2013, 08-
2013, 08-
-02458 dated December 2, 2013, 08-
2013, 08-02460 dated December 2, 2013, 08-02461 dated December 2,
2013, Addendum7 to the lease agreement 08/ZKS-000069 dated June 8, 2007)
Valuation
considerations
Construction start/completion dates: November 2012/December 2019;
Sales start/completion dates: November 2012/December 2019;
Page 105
Prices per sq m or parking unit: residential (econom): 73,798 – 90,000 RUB;
residential (comfort): 96,853 RUB; commercial: 120,000 – 150,000 RUB, parking:
300,000 – 500,000 RUB)
Valuation date
December 31, 2015
Inspection date
December 23, 2015
Market value
5,223,365,000 RUB
Page 106
18. Sofiya
Property type
Address
Plots 3, 8, 12, 5, 7, 3*, 13, 8*, 1, Lit , 49, 6, Yuzhnoe Hwy, St Petersburg
Location
The Property is located in Frunzensky District, in the south of St Petersburg, in the block
formed by Sofiyskaya St., Dimitrova St., Bukharestskaya St. and Yuzhnoye Highway.
Bukharestskaya St. provides direct access to the city centre via Ligovsky Ave, and
Sofyskaya St. provides direct access to the St Petersburg's Ring Road (KAD) in circa 3.3
km from the Property. The nearest metro station, Mezhdunarodnaya, is located in a 5
minute distance by public transport. Another metro station, Prospect Slavy, located
within a short walking distance from the Property, is planned for completion at 2018.
There are vast green areas with large ponds along the northern and southern borders
of the Property. The surrounding buildings to the west, north and south (beyond the
green zones) are mostly mass market residential with accompanying amenities. A large
industrial zone lies to the east of the Property. There are two modern retail subjects in
the neighborhood – Yuzhny Polus shopping centre and Lenta hypermarket.
Page 107
Description
Image 30
Image 31
The residential complex comprising several residential buildings of 20 - 25 floors with
integrated commercial space, multilevel above ground ventilated parking and a guest
parking zone. The complex comprises commercial buildings, social infrastructure, sport
outside facilities, children playgrounds, promenades and green zones as a fully fittedout residential accommodation. The construction of the residential complex is divided
into 5 phases. At the valuation date two of them are completed, other phases are being
constructed.
Stage of
Construction
development
Development
strategy
Build and sell
Areas
NSA (excluding parking)– 313,024.1 sq m;
Parking – 1,698 parking lots/ 21,225.0 sq m;
Available parking lots – 1,483 parking lots.
Tenure
854249 dated February 14,
2013; 78-
897211 dated March 28, 2013; 78-
2013; 782013; 78-
897209 dated March 28, 2013; 78897212 dated March 28, 2013; 78-
897210 dated March 28, 2013;
78-
854234 dated February 14, 2013; 78-
78-
854233 dated February 14, 2013; 78-
7878-
78-
854643 dated February 18, 2013; 78-
78-
854638 dated February 18, 2013; 78-
7878-
854239 dated February 14, 2013; 78854241 dated February 14, 2013;
897206 dated March 28, 2013; 78854243 dated February 14, 2013)
Valuation
considerations
Construction start/completion dates: March 2013/March 2018;
Sales start/completion dates: June 2013/December 2017;
Prices per sq m or parking unit: residential (econom): 87,465 RUB; commercial:
133,548 RUB, parking: 547,978 RUB)
Page 108
Valuation date
December 31, 2015
Inspection date
December 23, 2015
Market value
3,973,981,000 RUB
Page 109
19. Kalina-Park
Property type
Address
12, Marshala Blukhera, St Petersburg
Location
The Property is situated in Kalininsky District of St Petersburg, in the block bordered by
Marshala Blyukhera Ave, Laboratorniy Ave, Bestuzhevskaya St. and railroad. The
neighborhood is represented by new developed residential area with associated social
and commercial infrastructure. The Property has good accessibility. All types of public
transport are good developed in the subject district. The metro stations Lesnaya and
Ploshad Muzhestva are located in 3 and 5 km from the Property respectively.
Description
Image 32
Image 33
The residential complex consisting of several buildings of 9 - 25 floors with integrated
commercial premises and multilevel above ground parking. Fully fitted-out residential
accommodation is to include children playgrounds, boulevard, green zones and sport
outside facilities.
The housing complex is divided into 4 phases (1-3 phases are named “Kalina Park”, the
Page 110
4th phase has the name of “Cinema”). At the valuation date the first phase is completed
and commissioned, other phases are being constructed.
Stage of
development
Construction
Development
Build and sell
strategy
Areas
Parking – 1,416 parking lots/ 17,700 sq m;
Tenure
Land plots – freehold (ownership certificates: 782013; 78-
111932 dated October 15, 2013; 78-
H 835679 dated February 21,
H 976434 dated March 15,
2013; 78- 166099 dated November 20, 2013; 78- 338382 dated April 24, 2014;
78- 111930 dated October 15, 2013; 78- H 932559 dated 23.04.2013; 78338381 dated April 24, 2014; 78dated October 15, 2013; 78dated October 15, 2013; 78-
111928 dated October 15, 2013; 78-
111927 dated October 15, 2013; 78111925 dated October 15, 2013)
Valuation
considerations
Construction start/completion dates: February 2012/December 2019;
111929
111926
Sales start/completion dates: February 2013/December 2019;
Development strategy: Build and Sell;
Stage of development: construction;
parking: 500,000 RUB)
Valuation date
December 31, 2015
Inspection date
December 23, 2015
Market value
7,790,894,000 RUB
Page 111
20. VIVA
Property type
Address
3, Moskovskoye Highway, St Petersburg
Location
The Property is located in Moskovsky District of St Petersburg, at the crossroads of
Moskovskoye Highway and Dunaisky Ave. "Viva" is located in 15 minutes’ walk from
Zvezdnaya metro station. Moskovskoye and Pulkovskoye Highways provides easy and
direct access both to the city center and to the areas beyond the St Petersburg ring
road and to Pulkovo Airport also. Dunaysky Ave is also important thoroughfare
connecting south districts of the city.
The commercial infrastructure of the neighborhood is represented by hypermarkets
(Lenta, O'Key, METRO Cash & Carry, OBI, Castorama). In the proximity to the Property
two new shopping and entertainment centers are located – Kontinent and Torgovy
Dvor. Park Gorodov Geroyev, a large green area with pond, is only 100 m from the
Property.
Image 34
Image 35
Page 112
Description
The residential comfort-class complex consisting of several residential buildings of 18 25 floors including 2067 apartments, commercial premises on the ground floor and
multilevel above ground parking.
The construction of the residential complex was divided into 3 phases. At the valuation
date all the phases are completed.
Stage of
Completed
development
Development
Sell
strategy
Areas
Parking – 499 parking lots/ 6,238 sq m;
Tenure
Land plots – freehold (ownership certificates 78061948 dated October 30, 2015;
78061953 dated October 30, 2015; 78061947 dated October 30, 2015; 78061946 dated October 30, 2015; 78-
061943 dated October 30, 2015; 78-
061952 dated October 30, 2015; 78-
061950 dated October 30, 2015; 78-
061945 dated October 30, 2015; 78061942 dated October 30, 2015; 78-
061944 dated October 30, 2015; 78061941 dated October 30, 2015; 78-
061951 dated October 30, 2015; 78-
061949 dated October 30, 2015)
Valuation
considerations
Construction start/completion dates: May 2012/June 2015;
Sales start/completion dates: February 2013/December 2016;
Valuation date
December 31, 2015
Inspection date
December 23, 2015
Market value
202,431,000 RUB
Page 113
21. Kvartet
Property type
Address
Lit 1, Bldg 2, 27, Dunaysky Av, St Petersburg
Location
The Property is located in Moskovsky District of St Petersburg, to the southwest from
crossroad of Dunaysky Ave and Vitebsky Ave. The Property is located within a 5 minute
walk from Kupchino metro station. The land plot is located in close proximity to 3
important thoroughfares of the city: Vitebsky Ave, Dunaysky Ave and Kosmonavtov
Ave. Moskovskoye Highway and St Petersburg ring road (the KAD) are located at a
distance of 5 minutes’ drive from the Property, which provides easy and direct access
both to the city centre and to suburban areas. The Property is located on the former
industrial land plot. The complex development of the territory implies the creation of
associated social and commercial infrastructure within the block. The Property benefits
from the well-developed business, retail and social infrastructure in the zones of metro
stations Zvezdnaya and Kupchino. Park Gorodov Geroyev, a large green area with a
pond, is located in 2 km from the Property.
Page 114
Image 36
Description
Image 37
The residential complex consisting of 4 residential buildings of 25 floors including 2,049
apartments with integrated commercial space and multilevel above ground ventilated
parking. The residential buildings are to be of reinforced concrete construction and
provide fully fitted-out residential accommodation.
Areas
Stage of
Parking – 583parking lots/ 7,287.5 sq m;
Construction
development
Development
Build and sell
strategy
Tenure
910243 dated March 25, 2013; 78-
910244 dated March 25, 2013; 78910245 dated March 25, 2013)
910246 dated March 25, 2013;
865240 dated 12.02.2013; 78-
910240 dated March 25, 2013; 78-
Valuation
considerations
Construction start/completion dates: November 2012/December 2016;
Sales start/completion dates: April 2013/December 2017 (Valuer’s forecast);
Stage of development: construction;
Estimated costs after the valuation date: 1,132.532,000 RUB
Prices per sq m or parking unit: residential: 85,000 RUB; parking: 500,000 RUB)
Page 115
Valuation date
December 31, 2015
Inspection date
December 23, 2015
Market value
485,599,000 RUB
Page 116
22. Shuvalovsky
Property type
Mass market residential
Address
plot 208 (Kamenka), Prigorodny, St Petersburg
Location
The Property is situated in Primorsky District of St-Petersburg. The Property is located
within 10 min drive from Pionerskaya and Komendantskiy Prospekt metro stations. The
Property is located close to the main thoroughfares of the district. The neighborhood
benefits from the number of nearby leisure, retail and social amenities. There is
Novoorlovsky forest and a nature reserve, Yuntolovskaya Dacha, in close proximity to
the Property which features an artificial lake, playgrounds and walking paths.
Image 38
Description
Image 39
The building is under construction, works are currently in progress. It is intended to be
developed for a mass-market residential complex. The complex will comprise several
residential buildings of 16-25 floors with supportive commercial premises on ground
floors, and multi-level aboveground parking. The construction of the residential is
divided into 5 phases.
Page 117
Stage of
development
Construction
Development
Build and sell
strategy
Areas
Parking – 2,506 parking lots/ 31,325 sq m;
Tenure
Land plots – freehold (ownership certificates: 78419547 dated June 16, 2014; 78dated June 16, 2014; 7810, 2014; 7878-
419548 dated June 16, 2014; 78-
418929 dated June 10, 2014; 78-
419398 dated June 10, 2014; 78-
481973 dated August 28, 2014; 78-
419396 dated June 10, 2014; 78dated June 10, 2014; 78-
429741 dated July 03, 2014; 78419545
419392 dated June
481971 dated August 28, 2014;
419395 dated June 10, 2014; 78-
419397 dated June 10, 2014; 78-
418931 dated June 10, 2014; 78-
419391
419394 dated June
10, 2014)
Valuation
considerations
Construction start/completion dates: July 2014/December 2020;
Sales start/completion dates: July 2014/ December 2020;
Prices per sq m or parking unit: residential: 79,808 RUB; commercial: 120,000; selfstorage: 80,000 sq m; parking: 400,000 RUB)
Valuation date
December 31, 2015
Inspection date
December 23, 2015
Market value
2,515,077,000 RUB
Page 118
23. Ruchyi/Novaya Okhta
Property type
Address
Murinskaya road, St Petersburg
Location
The Property is located along Murinskaya Road, near St Petersburg Ring Road (
KAD), in Krasnogvardeysky District of St- Petersburg. The proximity to KAD provides
access to diferrent parts of the city. The nearest metro stations are Devyatkino and
Grazhdansky Prospect (5 min drive from the Property). The Property is surrounded by
agricultural land, parkland and Okhta River and Tsvetnoy Gorod development projects.
Image 40
Description
Image 41
The Property is a residential complex under construction, a part of the project of
complex development. The residential complex will consist of several residential
buildings of different number of floors with integrated commercial premises and
multilevel above ground parking. Also the subjects of social infrastructure are planned
to build within the development process: 3 schools, 5 kindergartens and 2 clinics.
Stage of
Construction
Page 119
development
Development
Build and sell
strategy
Areas
Total buildings area – 1,241,545 sq m;
Parking – 6,163 parking lots/77,037.5 sq m;
Tenure
Land plots - freehold (ownership certificates: 78905259 dated April 5, 2013;
78905267 dated April 5, 2013; 78- 604988 dated December 10, 2014; 78604989 dated December 10, 2014 , 78- 735321 dated April 6, 2015, 78735322 dated April 6, 2015; 78868640 dated February 19, 2013; 78- 455203
dated August 20, 2014; 78- 455204 dated August 20, 2014; 78- 455206 dated
August 20, 2014; 78868590 dated February 19, 2013; 78868639 dated
February 19, 2013; 78- 602322 dated October 31, 2014; 78- 602320 dated
October 31, 2014; 78- 602321 dated October 31, 2014; 78- 698172 dated
February 12, 2015; 78- 698165 dated February 12, 2015; 78- 673998 dated
August 20, 2014; 78869977 dated March 15, 2013; 78905260 dated April
5, 2013; 78905261 dated April 5, 2013; 78905262 dated April 5, 2013;
78905263 dated April 5, 2013; 78905264 dated April 5, 2013; 78905265 dated April 5, 2013; 78905266 dated April 5, 2013)
Valuation
considerations
Construction start/completion dates: September2012/December 2022;
Sales start/completion dates: May 2013/ March 2021;
Prices per sq m or parking unit: residential: 60,000 RUB; commercial: 118,885;
Page 120
Valuation date
December 31, 2015
Inspection date
December 24, 2015
Market value
4,111,896,000 RUB
Page 121
24. Ruchyi-7
Property type
Address
145, Piskarevsky Av., St Petersburg
Location
The Property located at the North-East of St Petersburg, along the border with
Leningradskaya Oblast’. The surrounding area consists of former agricultural land plots,
private cottages and territories of new residential development. The infrastructure of
this area is not developed, but all the projects of complex development imply the
construction of infrastructure objects.
The immediate proximity of St Petersburg Ring road and Piskarevsky Ave provides easy
access to the Property from other districts of the city.
Public transport accessibility at the valuation date is unsatisfactory but due to current
residential development of this district the situation with public transport will be
improved in process of completing projects.
Image 42
Description
Image 43
The construction is planned to set up in 2017. At the valuation date the projecting
Page 122
stage is on. The residential complex will consist of several residential blocks of variable
storeys with built-in commercial premises, multilevel parking and detached objects of
social infrastructure: a school and 2 kindergartens.
Stage of
development
Design
Development
Build and sell
strategy
Areas
Tenure
Land plots - freehold (ownership certificates: 78-
2013; 78-
904413 dated March 25, 2013; 78-
2013; 78-
868583 dated February 19, 2013; 78-
2013)
Valuation
considerations
Construction start/completion dates: January 2018/December 2020;
Sales start/completion dates: June 2019/ December 2021;
Number of phases: 2 (Valuer’s forecast);
Prices per sq m or parking unit: residential: 60,000 RUB; commercial: 80,000; parking:
350,000 RUB)
Estimated Revenue (in current prices): 13,616,080,000 RUB;
Valuation date
December 31, 2015
Inspection date
December 24, 2015
Market value
1,856,362,000 RUB
Page 123
25. Tsivilizatsiya
Property type
Address
42, Oktyabrskaya Emb., St Petersburg
Location
The Property is located in Nevsky District of St Petersburg within a 20-40 min walk of
Ulitsa Dybenko metro station. The Property is conveniently accessible from
Oktyabrskaya Embankment, which allows to easily reach all city districts and KAD.
The following subjects are situated in the neighborhood and surroundings: Park
Stroiteley, sporting and cultural centers - Ledovy Dvoretz sports center, stadium of
watersports Nevskaya Volna, retail and entertainment center London Mall, variety of
supermarkets - Karusel, Lenta, Castorama, Leroy Merlin, and also fitness center Olympic
and Gazprom sports club.
Image 44
Description
Image 45
At the valuation date the land plots are occupied with factories. The Project implies the
demolition of current improvements located on the land plots and re-development of
Page 124
the territory for residential use (Tsivilizatsia residential complex). The project
development scheme consists of 8 phases. The buildings will be made of monolithand-brick or prefabricated concrete panels, and will provide fitted-out or Shell&Core
residential accommodation.
Stage of
Design/Concept development
development
Development
Build and sell
strategy
Areas
Tenure
H 923942 dated April 30, 2013;
78-
659643 dated December 27, 2014: 78-
659642 dated December 27, 2014:
78-
659644 dated December 27, 2014: 78-
659645 dated December 27, 2014:
78-
000463 dated July 4, 2013; 78-
256014 dated February 14, 2014;78-
252233 dated December 05, 2013; 78-
252231 dated December 05, 2013)
Valuation
considerations
Construction start/completion dates: March 2016/December 2025;
Sales start/completion dates: March 2016/ March 2026;
Number of phases: 10 (Valuer’s forecast);
Prices per sq m or parking unit: residential: 89,490-95,000 RUB; commercial: 120,000;
parking: 350,000-500,000 RUB)
Valuation date
December 31, 2015
Inspection date
December 23, 2015
Market value
4,546,611,000 RUB
Page 125
26. Zapovednaya
Property type
Address
plot 3, Zapovednaya St, St Petersburg
Location
The object is located in Primorsky district of St Petersburg, between Suzdalsky Ave and
Zapovednaya St., 7 km from the metro station "Prospect Prosvescheniya" 3.5 km from
Vyborgskoe Ave, 3 km from the Parachutnaya St, 7 km from the Ring Road (KAD). 2
new metro stations "Kamenka" and "Shuvalovskiy Prospect" are scheduled for opening
in 2025. Novoorlovsky forest park is located at a distance of 1-2 km from the Property.
Objects of social and commercial infrastructure are available in nearby neighborhood,
at a distance 2 km from the property. At a distance of 4-5 km from the facilities there
are hypermarkets "Lenta", "K-RAUTA», "Okay".
Image 46
Description
Image 47
At the valuation date the land plot is vacant. The project implies the construction of
residential complex. It is planned to build circa 150 thousand sq m of real estate, of
which 86,687 sq m will be residential and the rest refers to where commercial premises
Page 126
and parking for 744 cars will take place.
Stage of
development
Concept development
Development
Build and sell
strategy
Areas
Tenure
Land plots - freehold (ownership certificates : 7878-
732571 dated April 3, 2015,
731751 dated April 3, 2015)
Valuation
considerations
Construction start/completion dates: January 2017/August 2019;
Sales start/completion dates: March 2016/ December 2020;
Valuation date
December 31, 2015
Inspection date
December 23, 2015
Market value
2,503,789,000 RUB
Page 127
27. Aeroport Rzhevka
Property type
Address
Aeroport Rzhevka, Kovalevo village, Vsevolozhskiy district, Leningradskaya Oblast’
Location
The Property is located in Vsevolozhsky district of Leningradskaya Oblast’, 8 km from St
Petersburg's border. It is 4 km distance from Ryabovsky Ave., 4 km from the Ring Road
(KAD). The closest metro station Ladozhskaya is at 12 km distance. The object is
bordered on the North-East by the Kovalevo village. Kovalevo with the rest side of the
object is surrounded by forest. The infrastructure in the neighborhood is poorly
developed; the nearest social and commercial facilities are located at a distance of 7-8
km from the Property.
Image 48
Description
Image 49
The land plot is vacant at the valuation date. The Project is at the designing and
projecting stage. The future residential complex is to comprise buildings of different
height, multi-storey car parkings and appropriate commercial and social infrastructure.
Stage of
Concept development
development
Page 128
Development
strategy
Build and sell
Areas
NSA (excluding parking)– 1,025,000 sq m;
Residential premises area – 1,000,000 sq m;
Land plots – 175 hectares
Tenure
380711 dated April 21, 2014,
380712 dated April 21, 2014)
Valuation
considerations
Construction start/completion dates: July 2017/December 2026 (Valuer’s forecast);
Sales start/completion dates: July 2016/ December 2027 (Valuer’s forecast);
Prices per sq m or parking unit: residential: 65,000 RUB; commercial: 90,000; parking:
200,000 RUB)
Valuation date
December 31, 2015
Inspection date
December 24, 2015
Market value
2,172,110,000 RUB
Page 129
28. Kosmonavtov
Property type
Address
1,2 plots, Kosmonavtov Av., St Petersburg
Location
Kosmonavto
The Property is located in Moskovskiy district of St Petersburg. This vacant land plot is
located to the South-East of crossroads of Kosmonavtov Ave. and Svirskaya St.
However, the location is rather close to metro station "Zvezdnaya" (9 min walk) and
"Kupchino" (4 min drive by car). Also Moskovskoye Highway is at the distance of less
than 1 km that provides the Property with easy access to different districts of the city.
Pulkovskoye highway is also in convenient distance from the Property that provides
access to the airport of St Petersburg (it takes about 15 min driving). The infrastructure
in the neighbourhood is not formed completely yet, but within the process of complex
development of the territory the situation will be improved. Also there are several malls
with all kinds of shops, supermarkets, sports facilities etc. in this part of Moskovsky
district. They are basically located near "Kupchino" and "Zvezdnaya" metro stations.
Page 130
Image 50
Description
Image 51
The project implies the construction of residential complex. At the valuation date the
land plot is vacant, the project is on the stage of the conception working out. The
Property is located on the neighbor land plot with the site of Kvartet residential
complex.
Stage of
Concept development
development
Development
Build and sell
strategy
Areas
Parking – 255 parking lots/3,187.5 sq m;
Tenure
Land plots – leasehold (Lease agreement 12/
and 12/
-10017 dated November 16, 2015;
-10018 dated November 16, 2015)
Valuation
considerations
Construction start/completion dates: September 2018/December 2020;
Stage of development: working out of the concept;
Valuation date
December 31, 2015
Inspection date
December 23, 2015
Market value
547,150,000 RUB
Page 131
29. Paradny Kvartal
Property type
Commercial
Address
1-3, Paradnaya St, St Petersburg
Location
The office center is located in Central District of St Petersburg, it takes 15 minutes to
walk from Chernyshevskaya metro station. The access to the Property is provides from
Vilensky Lane. The proximity of main thoroughfares such as Suvorovskiy Ave, Nevsky
Ave, Ligovsky Ave, Voskresenskaya and Smolnaya Embankments provides easy access
the Property from various parts of the city. The following landmarks are situated in the
neighborhood: Tavrichesky Garden and Palace, Smolny Cathedral, Suvorov Museum.
Paradny Kvatal is a mixed-use complex. It is implied the residents will access the diverse
infrastructure of this residential complex consisting of stores, supermarkets, educational
facilities and a fitness center nearby.
Description
Image 53
Image 52
The Property is the office building, completed in May 2014. The office building
comprises 4 floors and an underground parking for 60 cars. The office premises in the
building can be classified as A-class offices. All the office premises are in shell & core
fit-out.
Page 132
Stage of
development
Completed
Development
Sell
strategy
Areas
Total building area – 155,863 sq m
NSA/GLA – 12,074 sq m
isolated)
Tenure
Building – freehold (ownership certificate 78-
Valuation
Applied method(-s) of valuation: Residual (DCF) (for rent strategy and for sales
considerations
strategy) and Comparative Method;
Residual method considerations (for sales strategy)
Construction start/completion dates: October 2012/May 2014;
Sales start/completion dates: January 2013/ December 2018 (Valuer’s forecast);
Prices per sq m: 128,378 RUB
Residual method considerations (for sales strategy)
Rental rate RUB per sq m p.a.: 16,872;
OpEx, rubles per sq m p.a.: 4,430;
Capitalization rate: 11,5%;
Discount rate: 19,66%;
Valuation date
December 31, 2015
Inspection date
December 23, 2015
Market value
1,198,289,000 RUB
Page 133
30. Nevsky 1
Property type
Commercial
Address
1, Nevsky Av, St Petersburg
Location
The Property is located in Central District of St Petersburg within a 10-minute walk of
Nevsky Prospekt and Gostinyi Dvor metro stations. The following landmarks are
situated in close proximity to the Property: Hermitage Museum, Palace Square, The
Admiralty, Senatskaya Square, St. Isaac's Cathedral. A great amount of restaurants, bars,
boutiques and stores are located on Nevsky Ave. Bolshoy Gostiny Dvor Shopping
Center is located within a 15-minute walk of the Property.
Image 54
Description
Image 55
The Property comprises a building being a monument of a historical interest. According
to the project development scheme it is planned to internally refurbish the premises
only and renovate the facade. It is forbidden to demolish the building due to its'
Page 134
historical interest. The redeveloped brick / monolith-concrete building will comprise
apartments, retail premises on the ground floor and parking for 21 cars.
Stage of
development
Concept development
Development
Build and sell
strategy
Areas
Apartments area – 4,949 sq m;
Land plots – 2,503 sq m (0.25 hectares)
Tenure
Building - – freehold (ownership certificates 78807894 dated January 12, 2013;
78- 955118 dated January 30, 2004; 78- 955124 dated January 30, 2004; 78955103 dated January 30, 2004; 78-
955109 dated January 30, 2004; 78-
955104 dated January 30, 2004; 78-
955108 dated January 30, 2004; 78-
955105 dated January 30, 2004; 78955110 dated January 30, 2004; 78-
955101 dated January 30, 2004; 78517007 dated July 22, 2008; 78- 308928
dated March 11, 2008; 78-
953038 dated January 30, 2004; 78-
953123 dated
January 30, 2004; 78-
720253 dated February 17, 2006; 78-
January 30, 2004; 78January 30, 2004; 78-
955107 dated January 30, 2004; 78- 953035 dated
551995 dated June 6, 2006; 78- 953037 dated January
30, 2004; 78-
551996 dated June 6, 2006; 78-
953034 dated
551997 dated June 6, 2006; 78-
859514 dated September 27, 2007; 78- 551998 dated June 6, 2006; 78955114 dated January 30, 2004; 78- 955106 dated January 30, 2004; 78308926 dated March 11, 2008; 78-
955130 dated January 30, 2004; 78-
955128 dated January 30, 2004; 78-
552001 dated June 6, 2006; 78-
dated June 6, 2006; 78- 552003 dated June 6, 2006; 78January 30, 2004; 78- 572822 dated March 13, 2007).
552002
955127 dated
Valuation
considerations
Construction start/completion dates: September 2018/December 2020;
Valuation date
December 31, 2015
Page 135
Inspection date
December 23, 2015
Market value
1,696,734,000 RUB
Page 136
31. Fontanka 3
Property type
Commercial
Address
3, Fontanka River Emb, St Petersburg
Location
The commercial property "Fontanka 3" is located in Central district of St Petersburg, on
the riv. Fontanka embankment. The property is 0.7 km far from the metro station
"Gostiny Dvor", and also at a distance of 0.4 km from Nevsky Ave., which is considered
the main St. of St Petersburg. The object is at 2 km distance from Palace Square
(ultimate city center) and 20 km from Pulkovo airport. Therefore, the building is located
in the historical part of the city. The facility is located in a zone of "Golden Triangle" in
the neighborhood are business centres, highest class hotels, landmarks such as
Mikhailovsky Castle, Hermitage museum, Summer Garden, Mikhailovsky Garden,
Russian Museum. In the immediate neighborhood there are various restaurants, cafes,
shops as well.
Image 56
Page 137
Description
The project of reconstruction of the building implies creating of apartments, integrated
commercial and service premises and parking for 45 cars. At the valuation date there is
a permit for construction, but also there are some difficulties with city-heritage
preserving organisations. The valuation was based on the assumption that the
construction is legally permissible.
Stage of
Concept development
development
Development
Build and sell
strategy
Areas
Tenure
Land plots - freehold (ownership certificates)
Encumbrances
The monument of historical importance.
Valuation
considerations
Construction start/completion dates: January 2016/December 2018;
Sales start/completion dates: April 2016/ December 2018;
Valuation date
December 31, 2015
Inspection date
December 23, 2015
Market value
970,308,000 RUB
Page 138
32. Nevsky 68
Property type
Commercial
Address
liter B, building 40/68, riv. Fontanka Emb., St Petersburg
Location
The Property is located in Central District of St Petersburg within a 5-minute walk of
Mayakovskaya and Gostiny Dvor metro stations.
The Property is located at the main throughfare of St Petersburg – Nevsky Ave.
The following landmarks are situated in the neighborhood: Kazansky Cathedral,
Vosstaniya Square, Aleksandrinsky theatre, Anichkov bridge. A huge amount of
restaurants, bars, boutiques and stores are located on Nevsky Ave. The following retail
centres are located in close proximity to the Property: Nevsky Centre, Galereya,
Nevsky Atrium, Gostiny Dvor and Passage.
Image 57
Description
According to the project development scheme, the building comprises apartments,
Page 139
retail premises on the ground and first floors and underground parking for 26 cars. The
project was completely finished in 2013.
Stage of
Completed
development
Development
Sell
strategy
Areas
NSA (excluding parking)– 5,961.8 sq m;
Apartments area – 3,676.8 sq m;
Tenure
Building – – freehold (ownership certificate 78Land plot - – freehold (ownership certificate 78-
688901 dated March 3, 2015)
688900 dated March 3, 2015)
Valuation
considerations
Sales start/completion dates: May 2015/ December 2020;
Valuation date
December 31, 2015
Inspection date
December 23, 2015
Market value
2,795,754,000 RUB
Page 140
33. Leningradskoye Shosse 58
Property type
Address
Bldg 14, 21, 58 Leningradskoye Hwy, Moscow
Location
Leningradskoye Shosse
Residential complex is located in North district of Moscow on the second line close to
Leningradsky Ave. The development project is located at the Research Institute of
Mechanical Engineering (OAO «NIMI»). The subject property has beneficial location in
terms of convenient pedestrian and transport access. “Vodniy stadion” metro station is
located at the distance of 400 m from the Property, an access to the Property is
provided by Leningradsky Ave. It is necessary to note a proximity to Sheremet'yevo
International Airport – 15 km and center of Moscow – 12 km.
The surrounding area has a mix of administrative and business properties and
residential area. There is construction of a new Business Centre with an apartments
section.
Page 141
Image 58
Description
Image 59
The Subject Property is a multifunctional residential development complex located on a
1.77 ha fenced land plot. Residential complex with 40 stores, 4 level underground
parking and commercial premises.
Stage of
development
Concept development
Development
Build and sell
strategy
Areas
Tenure
Land plot with total area of 17,656 sq m– freehold (ownership certificate freehold
(ownership certificate 77
389 417 dated July, 15, 2015)
Non-residential building with total area of 2,682.6 sq m freehold (ownership
certificate 77
389420 dated July, 15, 2015);
Non-residential building with total area of 640 sq m freehold (ownership certificate
77
389419 dated July, 15, 2015).
Valuation
considerations
Construction start/completion dates: June 2016/November 2018;
Sales start/completion dates: September 2016/ December 2019;
Valuation date
December 31, 2015.
Inspection date
December 28, 2015.
Page 142
Market value
3,458,946,000 RUB
Page 143
34. Donskoy Olimp
Property type
Address
Bldg 19, 21, Serpukhovsky Val St, Moscow
Location
Donskoy Olimp
The residential complex development scheme will be developed on the land plot
located at 22, Serpukhovskoy Val St., Danilovsky sub-district, South Administrative
District. The sub-district has a well-developed social, transport and engineering
infrastructure. It benefits from good transport accessibility through Leninsky Ave. and
Varshavskoe Highway which lead to the Third Transport Road and Moscow Ring Road
(MKAD). The residential complex is located in
5-minute walk from Shabolovskaya
metro station. In the nearest surroundings there are residential buildings, offices,
government agencies and industrial enterprises.
Image 60
Image 61
Page 144
Description
A business class residential complex Donskoy Olimp is being constructed in the Southof Moscow. The design and construction of the complex involves several stages.
According to the architectural concept of the project in addition to residential
buildings, the complex includes commercial areas and an underground parking lot.
Stage of
Construction
development
Development
Build and sell
strategy
Areas
Other premises area – 3,701 sq m;
Available other premises area – 2,845 sq m;
Tenure
Land plot with total area of 47,200 sq m – short term lease agreement
09/2013 dated September, 4, 2013);
Valuation
considerations
Construction start/completion dates: May 2013/March 2017;
01-
Sales start/completion dates: November 2013/ November 2018;
Prices per sq m or parking unit: residential: 225,500 RUB; commercial: 280,000; other:
82,600; parking: 1,900,000 RUB)
1,616,961,000 RUB for bargains before December 31,2015);
Valuation date
December 31, 2015.
Inspection date
December 28, 2015.
Market value
6,681,489,000 RUB
Page 145
35. Grunvald
Property type
Address
Zarechye Settlement, Odintsovo District, Moscovskaya Oblast'
Location
Grunvald
The Grunvald residential complex, surrounded by a park, is situated in an environmentfriendly part of the Moscow region, a short way from the western boundaries of
Moscow. The complex has a good link with Moscow’s centre via Skolkovskoye Shosse.
The neighbourhood has a well-developed infrastructure – elite gymnasiums, schools
and kindergartens together with tennis courts and golf courses are located just a short
distance away. A close vicinity of the future Silicon Valley in Skolkovo will add to the
project’s attractiveness.
Image 62
Image 63
Page 146
Description
New residential complex consists of 13 detached six-storey buildings with up to 20
residential premises in each one, providing a limited number of neighbors for comfort
living conditions. The complex will include commercial properties and an underground
parking as well as a large fitness center with a sports pool. Each house of the Grunwald
residential complex has its own distinguishing features but together they form a unique
architectural solution.
Stage of
Completed
development
Development
Sell
strategy
Areas
Tenure
Parking – 270 parking lots;
Available other premises area – 968 sq m;
Freehold
Valuation
considerations
Construction start/completion dates: March 2005/January 2011;
Prices per sq m or parking unit: residential: 215,700 RUB; commercial: 130,000; other:
69,260; parking: 1,775,000 RUB)
for bargains before December 31,2015);
Valuation date
December 31, 2015.
Inspection date
December 28, 2015.
Market value
334,634,000 RUB
Page 147
36. ZILART
Property type
Address
Location
ZILART
Development project is located in South district at Avtozavodskaya St. The site is
located in 5 minutes by the car from Tulskaya and Avtozavodskaya subway stations.
Railway station “ZIL” is situated close to the property. From the North side the property
is boarded by the Third Transport Ring. From the East side of the land plot is Railway
Small Ring. The sub-district has a well-developed social, transport and engineering
infrastructure. It benefits from good transport accessibility through Third Transport
Ring.
Image 64
Description
Image 65
The subject property is a multifunctional residential development complex located on a
Page 148
65.087 hectares of land plots. Under the proposed development the project will
comprise a business class residential complex with parking lot and commercial
premises. The whole street will be pedestrian with limited public transport. The future
residential building will consist of variable storey from 6 to 15. Furthermore concept of
development scheme plans call for open spaces, park, schools other social facilities.
Stage of
Construction
development
Development
Build and sell
strategy
Areas
Available parking lots – 10,916 parking lots;
Tenure
Land plot with total area of 22,907 sq m – long term lease agreement
- 05-
045473 dated October, 7, 2014);
– 05-
045499 dated October, 15, 2014);
– 05-
045500 dated October, 15, 2014);
Land plot with total area of 14738 sq m – long term lease agreement
-05-
045501 dated October, 15, 2014);
-05-
045502 dated October, 15, 2014);
-05-
045503 dated October, 15, 2014);
Land plot with total area of 17071 sq m – long term lease agreement
-05-
045504 dated October, 15, 2014);
-05-
045505 dated October, 15, 2014);
-05-
045506 dated October, 15, 2014);
-05-
045536 dated October, 23, 2014);
-05-
045537 dated October, 23, 2014);
Page 149
-05-
045538 dated October, 23, 2014);
-05-
045541 dated October, 23, 2014);
-05-
045544 dated October, 23, 2014);
-05-
045546 dated October, 23, 2014);
-05-
045547 dated October, 23, 2014);
-05-
045549 dated October, 23, 2014);
Land plots with total area of 96,233 sq m – long term lease agreement
-05-
045552 dated October, 23, 2014);
-05-
047612 dated August, 31, 2015);
-05-
044956 dated May, 30, 2014).
Valuation
considerations
Construction start/completion dates: August 2015/ December 2024;
1,779,300,000 RUB for bargains before December 31,2015);
Valuation date
December 31, 2015.
Inspection date
December 28, 2015.
Market value
22,121,905,000 RUB
Page 150
37. Luchi
Property type
Address
Bldg 6, Proizvodstvennaya St, Moscow
Location
Luchi
“Luchi” is a mass market (comfort class) residential complex, located in the Siltsevo
district of Moscow. The development is within a 7-10 minute drive from Salarevo metro
station and in reasonable proximity to a railway station Novoperedelkino. The area also
benefits from its proximity to several parks, such as Balkovsky and Ulyanivsky parks.
The transport system is well developed and allows easy access to the city centre. The
site close to the development in the end of 2017 plans call for opening metro station
Solncevo.
Image 66
Image 67
Page 151
Description
“Luchi” is a mass market (comfort class) residential complex. The design and
construction of the complex involves five stages with an underground parking area.
Construction use poured concrete technology with brick elements and ventilated
facades. Furthermore concept of development scheme plans call for open spaces, park,
schools other social facilities.
Stage of
Design
development
Development
Build and sell
strategy
Areas
Tenure
Land plot with total area of 36,167 sq m freehold (ownership certificate 77
701352 dated October, 10, 2014);
- 07-
047971 dated November, 3, 2015);
- 07-
- 07-
- 07-
- 07-
- 07-
- 07-
- 07-
- 07-
- 07-
- 07-
- 07-
Page 152
Valuation
considerations
Construction start/completion dates: December 2015/ September 2021;
Sales start/completion dates: March 2016/ June 2022;
Valuation date
December 31, 2015.
Inspection date
December 24, 2015.
Market value
7,454,796,000 RUB
Page 153
38. iBitsa
Property type
Address
No Bachurino Village, Sosenskoye settlement, Novomoskovsky AD, Moscow
Location
iBitsa
The site is located in Novomoskovsky District close to MKAD, and has good transport
accessibility, meaning that it is possible to reach the center of Moscow by car in
approximately 20 minutes. Public transport to the central part of the city can also be
taken from a number of bus stops within walking distance of the site. An access to the
Property is available from MKAD. The area also benefits from its proximity to several
parks.
Image 68
Description
Image 69
The complex consists of thirteen residential towers with up to 6 floors constructed from
brick and poured concrete with ventilated facades. The residential area is protected
Page 154
from traffic noise by shopping center and parking lot. The ground floors will occupied
by consumer-oriented commercial premises and social facilities. The design and
construction of the complex involves five stages with an aboveground parking area and
shopping center. The complex features children playgrounds, recreational areas and
consumer-oriented infrastructure, including a shopping mall, a kindergarten and other
facilities.
Stage of
Design/concept development
development
Development
Build and sell
strategy
Areas
Shopping Centre premises area – 68,000 sq m;
Tenure
Leashold
Valuation
considerations
Construction start/completion dates: September 2016/ November 2021;
Sales start/completion dates: September 2016/December 2021;
Prices per sq m or parking unit: residential: 117,000 RUB; shopping center: 160,000
RUB; other: 130,000 RUB; parking: 600,000 RUB
Valuation date
December 31, 2015.
Inspection date
December 23, 2015.
Market value
6,111,779,000 RUB
Page 155
39. Podolsk-Erino
Property type
Address
Near Sal'kovo Village, Ryazanovskoye Settlement, Novomoskovsky AD, Moscow
Location
Podolsk-Erino
The Residential complex is located in a 15 km distance from Moscow Ring Road
(MKAD) on Warshawskoe highway and 28 km on te Simpferopolskoe Highway.
The access to the property by private transport is complicated by long distance – way
time is 50 minutes. Railway stations Silikatnaya and Podolsk are served approximately 4
km away from the subject property.
Image 70
Description
Image 71
The subject property is a multifunctional residential development complex located on
land plots with total amount of 87.7 hectares. Under the proposed development the
project will comprise a comfort class residential complex with parking lot and
commercial premises
Page 156
Stage of
development
Concept development
Development
Build and sell
strategy
Areas
Retail premises area – 48,300 sq m;
Tenure
138511 dated November, 15, 2015);
138510 dated November, 15, 2015);
270512 dated December, 19, 2011);
Valuation
considerations
Construction start/completion dates: August 2017/ September 2023;
Sales start/completion dates: August 2017/December 2023;
retail: 75,000 RUB; parking: 448,000 RUB
Valuation date
December 31, 2015.
Inspection date
December 23, 2015.
Market value
1,849,725,000 RUB
Page 157
40. Novoe Domodedovo
Property type
Address
Zapadny Neighbourhood, Domodedovo, Moscovskaya Oblast'
Location
Novoe Domodedovo
The Residential complex is located in a 22 km from Moscow Ring Road (MKAD) on the
frontage line of highway M-4 "Don" which provides good transport accessibility to
airport Domodedovo – 10 km and railway stations Vostryakovo and Vzletnaya – 3 km.
The site is situated at environmentally pristine without any industrial plants. At the
moment it benefits from good transport accessibility by the car but after completion
plans call for arranging traffic of public transport from railway stations Vostryakovo and
Vzletnaya to the residential district.
Image 72
Image 73
Page 158
Description
According to the concept provided by the Client a residential complex is to be built on
the land plot with a total area of 39.3345 ha. The residential building consists of
variable number of storeys (from 9 to 17). Development project comprised 26 blocks of
residential premises, 2 schools, 2 kindergartens, multilevel parking lot, stadium and
open spaces.
Stage of
Construction
development
Development
Build and sell
strategy
Areas
Available parking lots – 458 parking lots;
Tenure
Land plot with total area of 89,544 sq m– freehold (ownership certificate 50689680 dated December, 21, 2012
Land plots with total area of 303,801 sq m– short term lease agreement
n/a
dated October, 16, 2012
Valuation
considerations
Construction start/completion dates: August 2011/ December 2016;
Sales start/completion dates: October 2011/November 2018;
parking: 350,000 RUB
Estimated Revenue (in current prices): 1,254,988,000 RUB (including income in
amount of 641,171,000 RUB from bargains before December 31, 2015);
Valuation date
December 31, 2015.
Inspection date
December 23, 2015.
Market value
52,333,000 RUB
Page 159
41. Nakhabino Yasnoe
Property type
Address
near Chernaya Village, Pavlo-Slobodskoye Settlement, Istrinsky District, Moscovskaya
Oblast'
Location
Nakhabino Yasnoe
Nakhabino Yasnoe has well-developed transport and social infrastructure. The district is
connected with the centre of Moscow via two motorways – Volokolamskoye Highway
and Novorizhskoye Highway. Since the new road interchange has been opened, now it
takes only 30-35 minutes to get to Moscow from the neighborhood even during the
rush-hour. Besides, the neighborhood lies near Nakhabino railway station, where trains
run every 10-15 minutes. A short distance away there are public and private schools, a
supermarket, a bowling center, restaurants, a fitness center, etc. The Property is located
in the area surrounded by forestry, and there is a picturesque valley with a river in the
north-west.
Image 74
Image 75
Page 160
Description
The Property is a multifunctional residential development complex located on land
plots with total amount of 87.7 hectares. Under the proposed development the project
will comprise a comfort class residential complex with parking lot and commercial
premises. The Property comprises 66 two- and three-storey EURO-houses for 8 and 12
apartments respectively. Unique facade fit-out seamless technology improves
buildings’ exterior and guarantees high insulation.
Stage of
Construction
development
Development
Build and sell
strategy
Areas
Other premises area (self-storage) – 1,285 sq m;
Available parking lots – 458 parking lots;
Tenure
712897 dated November, 29, 2012);
712898 dated November, 29, 2012);
712899 dated November, 29, 2012);
712900 dated November, 29, 2012);
712901 dated November, 29, 2012);
712902 dated November, 29, 2012);
712903 dated November, 29, 2012);
75045 dated May, 26, 2012);
746976 dated May, 26, 2012);
752788 dated May, 26, 2012);
Page 161
Land plot with total area of 154 sq m freehold (ownership certificate 50
Page 162
665031 dated January, 17, 2014);
Valuation
considerations
Construction start/completion dates: December 2012/ December 2017;
Sales start/completion dates: April 2013/March 2019;
other: 30,000 RUB; parking: 350,000 RUB
Page 163
Estimated Revenue (in current prices): 6,492,455,000 RUB (including income in
amount of 344,431,000 RUB from bargains before December 31, 2015);
Valuation date
December 31, 2015.
Inspection date
December 24, 2015.
Market value
3,284,210,000 RUB
Page 164
42. Noviy Balchug
Property type
Commercial
Address
Bldgs. 1, 2, 3, 9, Sadovnicheskaya St, Moscow
Location
Noviy Balchug
The site is located in Central District. The proximity of the Zamoskvorechie sub-district
to the city center makes it a prestigious location for both living and business. The site is
located on the frontage line of Sadovnicheskaya St., which stretches along
Sadovnicheskaya and Kosmodiamnskaya Embankments. It is also within a five minute
walk from Novokuznetskaya metro station. The complex is well located in a pleasant
environment, with the established infrastructure including large shopping centers, food
stores, cinemas, hospitals and schools.
Image 76
Image 77
Page 165
Description
The complex comprises a single residential building with four 5-6 storey sections, two
of which are commercial, with underground parking; constructed using poured
concrete technology with brick elements. The ground floors will be occupied by
consumer-oriented commercial premises. The development also features atrium at the
courtyard.
Stage of
Design
development
Development
Build and sell
strategy
Areas
Parking – 170 parking lots;
Tenure
- 01-
044921 May, 20, 2014).
Valuation
considerations
Construction start/completion dates: April 2016/ August 2018;
Sales start/completion dates: April 2016/June 2020;
Prices per sq m or parking unit: apartments: 511,716 RUB; commercial: 447,167 RUB;
parking: 3,691,176 RUB;
Valuation date
December 31, 2015.
Inspection date
December 28, 2015.
Market value
2,076,886,000 RUB
Page 166
43. Avtozavodskaya
Property type
Operating office
Address
Location
Avtozavodskaya
The site is located in 5 minutes drive from Tulskaya and Avtozavodskaya subway
stations. Railway station “ZIL” is situated close to the property. From the South side the
property is boarded by the Third Transport Ring. From the North side of the land plot
where property is situated there is former sports area of the Dynamo manufactory and
embankment of the Moscow river. An access available from Third Transport Ring. The
surrounding area has a mix of administrative and business properties. The property is
located opposite to under development territory of the ZIL manufactory. Development
project is comprised residential and commercial properties.
Image 78
Image 79
Page 167
Description
The subject property is three-floor office complex. An access in the building is carried
via check-point. The main entrance is located on Third Transport Ring. The complex
was built in 1973. Building’s walls are made from the glass, the foundation is reinforced
concrete, façade is plastered and painted, the roof is metal. The building has a cabinettype layout. The ceiling height in cellar is 1st – 5.2 – 3.98, 2nd – 2.98 and the 3rd floors –
3.60 m.
Stage of
Completed
development
Development
Hold
strategy
Areas
GLA – 7,767 sq m;
Tenure
Office complex – freehold (ownership certificate 77
369944 dated
June 05, 2015)
Land plot – long term leasehold (lease agreement
- 05-018462 dated April, 18,
2002)
Valuation
Direct Capitalization Method and Comparative Method were applied.
considerations
Direct Capitalization Method considerations:
Average rental rate (triple net), rubles per sq m p.a.: 22,420;
Caprate: 11%;
adjustment based on the market data were used to determine the Value.
Valuation date
December 31, 2015.
Inspection date
December 24, 2015.
Market value
1,148,208,000 RUB
Page 168
44. Davydkovskaya
Property type
Operating office
Address
16, Davidkovskaya St., Moscow
Location
Davydkovskaya
The Subject property is located in Fili-Davydkovo, Western Administrative district. The
property has beneficial location in terms of convenient pedestrian and transport access.
“Slavyansky boulevard ” metro station is located at the distance of 0,5 km from the
property, an access to the property is provided by Davidkovskaya street from
Kutuzovsky Avenue. The surrounding area has a mix of administrative and business
properties and residential area. The site is situated at environmentally pristine without
any industrial plants. In view the whole advantages listed above, the location of the
subject property can be classified as fair.
Image 80
Image 81
Page 169
Description
Office premises are located at the first floor and the basement of the residential
complex. The premises have a cabinet-type layout. The site is fully fit out and serviced
with requisite equipment for office premises – climate control, safety control system,
uninterruptable power and etc. The territory near the Property is fenced; there is an
above ground parking lot.
Building’s walls are made from reinforced concrete and bricks, façade is stone facing
and painting, window frame is plastic extrusions, floor – linoleum, parquet.
Stage of
Completed
development
Development
Hold
strategy
Areas
Total area of the building – 41,819 sq m;
Leasable commercial premises – 1,737.2 sq m;
Underground parking – 6 parking spaces;
Tenure
Part of the total area of the property is 3.7 - freehold (ownership certificate 77
619732 dated June, 25, 2014);
619733 dated June 25, 2014);
619734 dated June 25, 2014);
619735 dated June 25, 2014);
619736 dated June 25, 2014);
619737 dated June 25, 2014);
Underground parking space
136 - freehold (ownership certificate 77
619727
619728
619729
619730
619731
dated June 25, 2014);
619738
dated June 25, 2014).
Page 170
Tenancies
Valuation
Direct Capitalization Method and Comparative Method were applied.
considerations
Direct Capitalization Method considerations:
Average rental rate (triple net), rubles per sq m p.a.: 15,417;
Caprate: 11.5%;
Valuation date
December 31, 2015.
Inspection date
December 24, 2015.
Market value
262,475,000 RUB
Page 171
45. Tverskoy Blvd
Property type
Operating office
Address
16, Tverskoy blvd., Moscow
Location
Tverskoy Blvd
The Subject Property is located in Central Administrative district of Moscow, in
Presnensky sub-district, on Tverskoy blvd in 500 m from “Pushkinskaya” metro station
on the front line of the Boulevard Ring. Close to the property is located Pushkin Square
and Tverskaya Street, one of the busiest places in Moscow. An access available from the
Tverskoy blvd there are some bus stops slightly off the Subject. Thus, the Subject
Property has good transport and pedestrian accessibility.
The subject’s surroundings include social, commercial and residential estate as well as
rest zones and cultural monuments. The most famous office centres in the district are
the following: Class A «Usadba Center» located at 22, Voznesensky lane, Moscow;
Class B «Nikitsky Passage» located at 5, bld. 6 Nikitsky lane, Moscow;
Page 172
Image 82
Description
Image 83
The property is newly discovered sample of architecture of 19 century – Maikov’s town
mansion. The building is fully redeveloped in 2004 – 2005 with preservation of façade
and cast iron stairs. The four floor building is comprised class
office accommodation
which is fully fitted out. There is two level underground parking lot for 30 parking
spaces.
Stage of
Completed
development
Development
Hold
strategy
Areas
Buildings – 4,903.8sq m
Tenure
Part of the total area of the property is 1,176.8 sq m – freehold (ownership
certificate
77
078696 dated
02, 2007; 77
537313
11,
2015)
Part of the total area of the property is 338.5 sq m – freehold (ownership certificate
77
Part of the total area of the property is 690.6 sq m – freehold (ownership certificate
77
Part of the total area of the property is 1,016 sq m – freehold (ownership certificate
77
537314
11, 2016; 77
078697
02, 2007)
Part of the total area of the property is 1,621.9 sq m – freehold (ownership
certificate 77
77
055635 dated April 20, 2015)
77
22 – freehold (ownership certificate
055307 dated April 24, 2015)
Land plot – long-term lease (
Tenancies
055306 dated April 24, 2015)
77
056246 dated April 24, 2015)
77
055480 dated April 24, 2015)
77
- 01-039326 dated December 14, 2012 )
Valuation
Page 173
considerations
Caprate (Terms /Reversion period): 8.8%/9%;
Valuation date
December 31, 2015.
Inspection date
December 28, 2015.
Market value
1,101,112,000 RUB
Page 174
46. Rassvetniy
Property type
Address
2B, 40-Letiya Komsomola Street, Kirovskiy administrative district, Yekaterinburg
Location
The subject property is located near the center of Yekaterinburg city at the JBI sub
district, on the corner of Siromolotova and Rassvetnaya streets. The ecological situation
in the district is assumed to be good. There is a forest park “Kamennye palatki” near the
area, Lake “Shartash” only in 1 km from the property. The area has a developed
infrastructure: schools, clinic, food-markets, post office, shopping centers, banks and
pharmacy. The distance to the city center is approximately 5.1 km.
Developed transport system connects the area with the city through 4 highways
(Malysheva, Komsomol’skaya, Shefskaya streets and Sibirskiy Trakt). The main highway
of the district is Siromolotova street which provides residents with public transport
(buses, trams, taxis).
Surroundings are mainly presented by parking, supermarkets, tram deport, stadium at
the distance of 300 meters and a big supermarket and shopping center in 750 meters.
Page 175
Image 84
Description
Image 85
Economy class residential complex of 5 residential buildings (precast concrete) that are
25/26 floors in height. The residential complex area includes green zones, playgrounds
and kindergarten. Residential complex consists of 2 460 residential premises that are
fully fitted out (laminate, vinyl wallpapers, ceiling – waterproof acrylic, MDF interior
doors, safe entrance door).
The beginning of the construction – 2014 year. Scheduled completion date – 2018 year.
Current condition:
Houses 3
,2
Houses 1 , 1
, 2 – put into operation;
– facade works, interior finishing;
House 4 – construction;
House 5 – designing.
Stage of
Construction
development
Development
Build and sell
strategy
Areas
Total buildings area – 206,884.46 sq m
Residential premises area – 143,436.59 sq m
Available residential premises area – 71,282.32 sq m
Land plot – 8.74 hectares (~ 6 contiguous land plots with a total area of
87,492 sq m)
Tenure
Freehold on the land plots:
Land plot of 11,537 sq m, ownership certificate 66
407691 dated April 16, 2014;
501070 dated June 06, 2014;
500975 dated June 06, 2014;
503212 dated August 06, 2014;
Land plot of 50 sq m, ownership certificate 66-66/001-66/001/459/2015-800/1
dated December 15, 2015;
Land plot of 32,986 sq m, ownership certificate 66-66/001-66/001/459/2015-801/1
dated December 15, 2015.
Valuation
considerations
Construction start/completion dates: February 2014/ September 2018;
Prices per sq m or parking unit: residential: 63,611 RUB
Page 176
Valuation date
December 31, 2015.
Inspection date
December 18, 2015.
Market value
2,395,317,000 RUB
Page 177
47. Khrustalniye Klyuchi
Property type
Address
Latviyskaya St, Yekaterinburg
Location
The subject property is located in the east of Yekaterinburg at the Kompressornyi sub
district at Latviiskaya street, near the Ring Road (EKAD). The distance to the city center
is about 11,7 km.
The ecological situation in the district is close to perfect, there is a big forest on the one
side of the area. The district has a developed infrastructure: schools, clinic, foodmarkets, post-office, shopping centers, banks and pharmacy.
The district is connected with the center of the city through three roads (Sibirskiy trakt,
Kolcovskiy trakt, Dubler of Sibirskiy trakt). The Latviiskaya street is connected with one
of the main highways which provides residents with a good transport accessibility.
Moreover, aeroexpress can be used to reach the center of the city from the district.
Surroundings are mainly presented by forest on the south, shops, clinic and police
department at the distance of few hundred meters.
Page 178
Image 86
Description
Image 87
12/25 floors in height. The residential complex area includes green zones, playgrounds
and kindergarten. There are cafes, shops and banks on the ground floor of the subject
property. Residential complex consists of 3 400 residential premises that are fully fitted
out (laminate, vinyl wallpapers, ceiling – waterproof acrylic, MDF interior doors, safe
entrance door) and office premises.
Current condition:
House 1 – put into operation;
House 4 – construction works;
House 4 – construction works;
Other houses – designing.
Stage of
development
Construction
Development
Build and sell
strategy
Areas
Tenure
Total NSA– 217,200.15 sq m
Residential premises area – 216 303,35 sq m
Office area – 896.8 sq m
Available office area – 386,40 sq m
Land plot – 11 hectares (~ land plot with a total area of 110,197 sq m)
Leasehold for the land plot until the May 25, 2022 (Lease Agreement # 6-1307-T dated
May 25, 2012 as amended by Addendum dated October 29, 2014).
Valuation
considerations
Construction start/completion dates: April 2014/ October 2021;
Sales start/completion dates: September 2014/ October 2021;
Prices per sq m or parking unit: residential: 50,161 RUB; commercial: 46,751 RUB.
Page 179
Valuation date
December 31, 2015.
Inspection date
December 18, 2015.
Market value
614,742,000 rubles
Page 180
48. Michurinskiy
Property type
Address
Between Landay, Ekaterininskaya, Vavilova (Syhodol’skaya) streets, Verh-Isetskiy
administrative district, Yekaterinburg
Location
The subject property is located in the west of Yekaterinburg city at the Shirokaya
Rechka sub district between Landay, Ekaterininskaya, Vavilova (Syhodol’skaya) streets
near the EKAD. The ecological situation in the district is close to perfect (forest and lake
near the area). There are shopping malls such as OBI, IKEA, Ashan, METRO nearby.
The transport accessibility of the subject property is satisfactory. The distance to the
city center is approximately 10 km, to the Ring Road (EKAD) about 4 km. Now the
project of improvement of the transport accessibility of the district is developed. This
will help to connect the area with EKAD and sub district “Academicheskiy” which is one
of the most dynamic growing districts of the city.
Surroundings are mainly presented by green zone (mainly forests).
Page 181
Image 88
Description
Image 89
Comfort class residential complex of 70 residential buildings (precast concrete) that are
3/4 floors in height. The residential complex area includes green zones, playgrounds,
kindergarten, office rooms and three-level parking (594 parking lots). Residential
premises of residential complex are fully fitted out (laminate, vinyl wallpapers, ceiling –
waterproof acrylic, MDF interior doors, safe entrance door).
Current condition:
First stage of the construction (36 houses) – 29 houses are put into operation, 7 –
construction and designing;
Second stage of construction – designing.
Areas
Total NSA– 250,967.47 sq m;
Residential premises area – 249,508.47 sq m;
Office area – 1,459 sq m
Parking – 594 parking lots (ground level parking)
Available office area – 1,162.30 sq m
Available parking lots – 594
Land plots – 468,519 sq m
Tenure
880745 dated December 31,
2014;
2014;
2014;
2014;
Land plot of 204 sq m, ownership certificate 66
2014;
2014;
2014;
2014;
2014;
Page 182
2014;
2014;
2014;
2014;
2014;
2014;
2015;
2015;
2015;
2015;
2015;
576211 dated October 08, 2012;
907355 dated May 13, 2013;
907356 dated May 13, 2013;
907359 dated May 13, 2013;
138385 dated September 26,
2013;
2013;
2013;
2013;
2013;
2013;
2013;
2013;
Page 183
2013;
410749 dated March 24, 2014;
410748 dated March 24, 2014;
596373 dated June 27, 2014;
596374 dated June 27, 2014;
502980 dated August 01, 2014;
503063 dated August 01,
2014;
Land plot of 407sq m, ownership certificate 66-66/001-66/001/396/2015-294/1
dated July 14, 2015;
2014;
dated December 15, 2015;
Land plot of 5,720 sq m, ownership certificate 66-66/001-66/001/472/2015-679/1
dated December 15, 2015.
Valuation
considerations
Construction start/completion dates: November 2012/ December 2019;
Sales start/completion dates: March 2013/ December 2019;
Page 184
54,500 RUB; commercial: 65,000 RUB; parking: 300,000 RUB.
Discount Rate: 18.66%/21.66%
Valuation date
December 31, 2015.
Inspection date
December 18, 2015.
Market value
1,701,989,000 RUB
Page 185
49. Rastochnaya
Property type
Address
31a, Rastochnaya Street, Zheleznodorozhniy administrative district, Yekaterinburg
Location
The subject property is located in the Yekaterinburg city at the Staraya Sortirovka sub
district between Rastochnaya, Kynarskaya, Kishinevskaya and Bilimbaevskaya streets.
The ecological situation in the district is formed by the near railways and sort facilities.
The distance to the city center is approximately 7 km.
The subject property is mainly surrounded by the old houses of 2-5 floors in height But
currently the area of the district is dynamically developing. New residential complexes
are constructing nearby. There are schools, kindergartens, stadium, fitness center and
shops as well as public parking, car showroom near the subject property.
Transport system is well developed and provides citizens with good services of public
transport (buses, trams, taxis, bus stop in 120 meters).
Page 186
Image 90
Description
Image 91
Economy class residential complex of 1 residential building (precast concrete) that is 18
floors in height. The residential complex area includes residential premises , office
premises and car parking (70 parking lots). Residential premises of the residential
complex will be fully fitted out (laminate, vinyl wallpapers, ceiling – waterproof acrylic,
MDF interior doors, safe entrance door).
Current condition: designing.
Stage of
development
Design
Development
Build and sell
strategy
Areas
Office area – 219 sq m
Parking – 70 parking lots (underground parking)
Available office area – 219 sq m
Tenure
Freehold on the land plot according to the Ownership certificate number 66
274963
dated December 16, 2013
Valuation
considerations
Construction start/completion dates: January 2016/ December 2017;
Sales start/completion dates: June 2016/ June 2018;
parking: 350,000 RUB.
Estimated Revenue (in current prices): 627,552,000 RUB;
Page 187
Discount Rate: 20,24%
Valuation date
December 31, 2015.
Inspection date
December 18, 2015.
Market value
97,980,000 RUB
Page 188
50. Academicheskiy
Property type
Address
Verkhneuphaleyskaya St, Yekaterinburg
Location
The subject property is located in the west of Ekaterinburg city at the Shirokaya Rechka
sub district, near the intersection of Evgeniya Savkova, Syhodol’skaya and Rucheinaya
streets. The ecological situation in the district is close to perfect (forest and lake near
the area). There are shopping malls such as OBI, IKEA, Ashan, METRO nearby.
The transport accessibility of the subject property is satisfactory. The distance to the
city center is approximately 9 km, to the Ring Road (EKAD) about 3.5 km. Now the
project of improvement of the transport accessibility of the district is developed. This
will help to connect the area with EKAD and sub district “Academicheskiy” which is one
of the most dynamic growing districts of the city.
Surroundings are presented by green zone and houses of “Academicheskiy” residential
area that are 10 floors and more in height. There are warehouse complex “Malahit”,
residential complexes “Khrustal’nogorskiy” and “Suhodolskiy kvartal” near the subject
property.
Page 189
Image 92
Description
Image 93
Economy class residential complex of residential buildings (precast concrete) that are
18-25 floors in height. The residential complex area includes green zones, playgrounds
and parking (600 parking lots). Flats of residential complex are fully fitted out (laminate,
vinyl wallpapers, ceiling – waterproof acrylic, MDF interior doors, safe entrance door).
The projected beginning of the construction – 2015 year. Scheduled completion date –
2020 year.
Stage of
Initial concept & planning
development
Development
Build and sell
strategy
Areas
Total buildings area – 161,651 sq m
Total NSA – 109,967 sq m
Residential premises area – 99,647 sq m
Parking – 600 parking lots
Available flats area – 109,967 sq m
Tenure
The Client hasn’t provided us with any Title Documents. In accordance with the
information of the Client rights on the land plots are registering now, type of the
tenure – freehold.
Valuation
considerations
Construction start/completion dates: November 2016/ December 2020;
Sales start/completion dates: January 2017/ December 2020;
Prices per sq m or parking unit: residential: 56,230 RUB; parking: 300,000 RUB.
Valuation date
December 31, 2015.
Inspection date
December 18, 2015.
Page 190
Market value
212,459,000 RUB
Page 191
51. Flagman
Property type
Address
between Repina, N.Vasil’eva, Zavodskaya streets, Verh-Isetskiy administrative district,
Yekaterinburg
Location
The subject property is located in the Yekaterinburg at the VIZ sub district between
Repina, N.Vasil’eva and Zavodskaya streets. The distance to the city center is
approximately 3 km. The ecological situation in the district is deemed to be good.
There is no big factories in the nearest area. The subject property is mainly surrounded
by roads. It is situated near the crossroads of Gurzufskaya, Repina and Metallurgov
streets – the main highways of the districts which connect west and south of the city
with the center. So the transport system is well developed and provides residents with
good services of private and public transport (mainly buses, but also trams at some
distance).
Surroundings are mainly presented by houses that are 5 floors in height, food-shops,
schools, pharmacies. There are schools, kindergartens, hospital, parks, cafes, restaurants
and shopping mall close to the area.
Page 192
Image 94
Description
Image 95
Comfort class residential complex of 4 residential buildings (precast concrete) that are
10-25 floors in height (with commercial premises at the ground floor). The residential
complex area includes 1 100 residential premises , commercial premises and
underground parking (515 parking lots). Residential premises of residential complex
will be fully fitted out (laminate, vinyl wallpapers, ceiling – waterproof acrylic, MDF
interior doors, safe entrance door).
Current condition:
House 1 – construction works at the level of 14th floor;
Houses 3
– construction works at the level of 1st floor;
Parking – construction works.
Stage of
Construction
development
Development
strategy
Areas
Build and sell
Office area – 4,934 sq m
Parking – 515 parking lots (underground parking)
Available office area – 4,829.99 sq m
Land plot – 3.4 hectares (~ 3 contiguous land plots with a total area of 33,884 sq m)
Tenure
Land plot of 23,261 sq m, ownership certificate number 66-66/00166/001/413/2015-58/1 dated February 22, 2015
Land plot of 48.42 sq m, ownership certificate number 66-66/001-66/001/413/201559/1 dated February 22, 2015
Land plot of 48 sq m, ownership certificate number 66-66/001-66/001/413/201560/1 dated February 22, 2015
Page 193
Valuation
considerations
Construction start/completion dates: April 2015/ December 2019;
Sales start/completion dates: April 2015/ December 2019;
Valuation date
December 31, 2015.
Inspection date
December 18, 2015.
Market value
698,959,000 RUB
Page 194
52. Shefskaya
Property type
Address
11, Shefskaya St, Yekaterinburg
Location
Shefskaya
The subject property is located in the north of the Yekaterinburg city at the Elmash sub
district near the 108, Shefskaya street. The distance to the city center is approximately 6
km.
The ecological situation in the district is assumed to be good: “Kalinovskie rezrezy”,
forest and parks are close to the area. There are schools, kindergartens, hospital, parks,
cafes, restaurants and shopping malls near the subject property. However there are
small industry zone at the distance of approximately 0,5 km and big industry zone
(turbine plant, electric locomotive plant) at the distance of approximately 2,5 km from
the subject property.
The surroundings are mainly presented by new residential complexes such as
Kalinovskiy, Oasis and etc., shopping centers, schools, pharmacies.
The transport system is perfectly developed and provides residents with good services
of public transport (few minutes to bus-stop, taxis, subway and trams (in the future))
and many road junctions that provide comfortable way to the EKAD, city-center and
suburbs. The main road of the district is Prospect Kosmonavtov which is at the distance
of about 500 m from the subject property.
Page 195
Image 96
Description
Image 97
15-21 floors in height. The residential complex area includes 210 residential premises ,
office premises and parking (153 parking lots). Residential premises of residential
complex will be fully fitted out (laminate, vinyl wallpapers, ceiling – waterproof acrylic,
MDF interior doors, safe entrance door).
Current condition:
Houses 1,2 – foundation works;
Parking – designing.
Stage of
Construction
development
Development
strategy
Areas
Build and sell
Office area – 209 sq m
Parking – 153 parking lots
Available residential premises area – 12,012.33sq m
Available office area – 188.12 sq m
Tenure
Freehold on the land plot (ownership certificate number 66-66/001-66/001/400/201521/1 dated February 25, 2015)
Valuation
considerations
Construction start/completion dates: November 2015/ March 2018;
Sales start/completion dates: November 2015/ June 2018;
Page 196
Valuation date
December 31, 2015.
Inspection date
December 18, 2015.
Market value
242,835,000 RUB
Page 197
Appendix 3
Market overview
Page 198
Office market overview of St. Petersburg
Market segmentation according to the regular modern classification
Saint Petersburg’s office market is more developed than other segments of the city’s commercial real estate
market.
The new developing projects or reconstructed office premises of high quality, which are suitable for western
standard specifications, are the main objects of classes A and B. While analyzing the office market of St.
Petersburg, we focus primarily on the premises of class A and B - high-quality office real estate (for more details
on the classification of office centers see table below).
Class B office centers dominate in the market structure of quality office properties: they have 67% share by total
stock of GLA, and 77% share by the number of office properties.
Chart 1. Saint-Petersburg office real estate market structure by class, total stock of GLA, % - (1), number
of office properties % - (2), 2015 Q4
(1)
(2)
Source: Knight Frank St Petersburg, 2016
Supply analysis
Supply volume dynamics
The total supply of high-quality office space amounted to 2,338.7 thousand sq m as of 2015 Q4.
Table 4. Key supply indicators of office market as of 2015 Q4
Class
Total
Total stock of GLA,
thousand sq m
Number of office properties
767.1
1,571.6
2,338.7
67
226
293
Supply dynamics
The chart bellows show commissioning of class A and class B new office space from 2002 to 2015
Page 199
Chart 2. Commissioning of class A and B new office space, 2002 – 2015, thousand sq m
In 2009 the maximum commissioning volume of high-quality office space was achieved. The total volume of the
commissioning reached 319.9 thousand sq m, with 206.7 thousand sq m of Class B office space – the maximum
amount of commissioning in this segment.
Table 5. Commissioning of new office space and total accumulated areas by classes, thousand sq m
Years
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
-
15.8
40.5
106.4
113.2
112.9
60.6
60.1
127.9
65.7
81.9
Accumulated area
19.1
34.9
44.4
181.8
295.0
359.9
436.2
491.7
619.6
685.2
767.1
Class B
169.5
81.3
188.0
191.7
206.7
114.3
87.6
96.1
133.7
62.6
79.7
Accumulated area
375.1
456.4
641.0
832.7
1,016.9
1,128.7
1,200.3
1,295.7
1,429.3
1,491.9
1,571.6
Totally A and B
classes
169.5
97.1
228.6
298.1
319.9
227.2
148.3
156.1
261.6
128.3
161.6
Accumulated area
394.2
491.3
685.4
1,014.5
1,311.9
1,488.7
1,636.5
1,787.3
2,048.9
2,177.2
2,338.7
Class
It should be also noted that the accumulated amount of areas in the table above is not just a sum of office
areas, accumulated in the previous year and commissioning of the current year, but it also excludes properties
which had left the market (i.e. were demolished or purchased by a company for own needs).
During 2015 22 office buildings with total leasable area of 161.6 thousand sq m. entered to the office real estate
market. The supply increase amounted to 7% since the end of 2014.
Page 200
Table 6. Main office centers commissioned in 2015
Name
Class
Flandria Plaza
Zeppelin
Separate building of Gazprom Export
Senator
Senator
Au Pont Rouge (2 phase)
Au Pont Rouge (3 phase)
Class B
MEZON PLAZA
SOVA
Formida
Kushelevskaja, 13
Serebrjanye zerkala
Senator
Morskoj dom
Krummelhouse
BUSINESS PALAZZO
Assembly
Kersten House
Address
Total GLA,
thousand sq m
3, Tashkentskaya, St
6b, Startovaya St
2a, Ostrovskogo Sq
1, Kropotkina St
60, Moskovsky Ave
73-79, Moyki river Emb
73-79, Moyki river Emb
29.1
12.3
11.7
6.7
12
4.2
2
28, Bol'shoj Sampsonievskij Ave
22, Marshala Tuhachevskogo Ave
3b, Jenergetikov Ave
13, Kushelevskaja Ave
2, Malaja Monetnaja St
60, Moskovsky Ave
161, Fontanki river Emb
12, Bol'shaja Posadskaja St
29, Ligovskij Ave
12, Majakovskogo St
25, Krasnogo Kursanta St
22.6
9
8.2
5.8
4.7
4.5
3.6
3.5
2.8
1.8
1.5
Vacancy rates
A successful move of Gazprom structures from Moscow exerted the most noticeable impact on the St.
Petersburg office real estate market, it began seven years ago. Transactions were concluded most actively
during 2015, which resulted in decrease of the vacancy rate in Class A office centres by 6.8 p. p. in comparison
with the end of 2014. 9.4% of Class A office space is vacant according to the beginning of 2016. The rotation of
tenants from office buildings of lower class also contributed to the reduction of the volume of Class A vacant
space. These tenants were able to improve their conditions due to a drop in rental rates in modern quality
projects.
The reverse situation occurred in Class B office centres, where the vacancy rate increased if compared to the
end of 2014 by 2.8 p. p. and reached 11.6%. There were by 57 thousand sq m more office space vacant for lease
at the end of 2015 if compared to the previous year. The increase of the indicator is due to the desire of certain
tenants to reduce rental costs in connection with the general economic instability, so they chose less expensive
premises of poor-quality office buildings.
Circa 254 thousand sq m of office space in the current business centers of Saint Petersburg were vacant by the
end of the year, where a large share of the business centres are of Class B - 72%.
Page 201
Chart 3. Dynamics of vacancy rates, Q1 2007 – Q4 2015
Geographical spread trends
Knight Frank St Petersburg has developed a scheme of the St. Petersburg office market division into 14 business
areas depending on the location and preferences of potential tenants. It is assumed that locating in similar
facilities within the business area has at the same level of attractiveness for potential tenants.
Page 202
Map 1. Map of the office real estate development zones
Main trends of supply geographical structure are:
Most of the new office space in the last 6-7 years was developed in central areas of St. Petersburg
(business districts Central-1 and Central-2 and Admiralteysky). The development of the city center as
a business area is caused by prestigiousness and convenient transport accessibility from all parts of
the city. A striking example of new development in this zone is a administrative and office project
Page 203
‘Nevskaya Ratusha’, which is under construction. Its first phase includes the headquarters of St.
Petersburg city administration and two class A office buildings
Construction of new office buildings on the embankments with views located outside the historic
center (Vyborgskaya, Pirogovskaya, Petrogradskaya, Ushakovskaya, Malookhtinskaya, Sverdlovskaya,
etc.). One of the largest projects in St. Petersburg is a new office development of Class A ‘Saint
Petersburg Plaza’ on 64, Malookhtinsky Ave.
Petrogradsky business area has also emerged into a prestigious business area during the last 6-7
years. As well as Centralny-1 and Centralny-2, business districts it has advantageous location,
convenient access from all parts of the city that attracts potential tenants. The best examples of office
buildings in the Petrogradsky district are: Langenzipen, Apollo, Tolstoy Skver, Light House, etc.
In Vasileostrovsky-1 and Vasileostrovsky-2 business areas real estate development grew rapidly till
the crisis of 2008-2009. There are modern office centers that are not inferior by quality to those
located in central areas: Sovereign, Magnus, Gustaf, Senators, Baltis Plaza and others. Popularity of
the area, in spite of the proximity to the city center, falls to the central areas and Petrogradsky district,
due to the low transport accessibility.
Moskovsky district also has been developed. Business activity development in Moskovsky district is
encouraged by its strategic location – the proximity of the airport, convenient access to the city
center, convenient exit from the city. A new office area was formed near the Pulkovo airport: there are
office centers ‘Pulkovo Sky’ of the EKE Group development company, business developments Upiter1 and Upiter-2 of the Avielen AG development company, office building ‘Tecnopolis Pulkovo’ of the
Tecnopolis company.
Areas of the city, distant from the city center – peripheral, now have a low supply of high-quality
office space. Construction of social and office complex ‘Lakhta center’ in Primorsky district will give a
new impetus to decentralization of office real estate in St. Petersburg. In the whole, the area of
properties in non-central districts of the city is greater than the area of properties located in the
central districts.
Future office development in non-central areas (previously less popular) will be possible due to planned city’s
transport infrastructure improvement; for instance:
Construction of Western High-Speed Diameter, the central portion;
Development of the Central and Inner Circular Highway;
Distribution of the total leasable area of quality office real estate by business districts of St. Petersburg is
presented in the diagram below:
Page 204
Chart 4. Distribution of total leasable area of quality office real estate of St Petersburg by business
districts, 2015 Q4.
Demand analysis
Types and sources of demand
The total volume of lease transactions completed in 2015 was 182 thousand sq m, which is the highest level
since 2009. However, 59% of all transactions were signed by the companies of raw materials sector of the
economy, without them the sum of transactions was much lower - 74 thousand sq m.
The analysis of transactions, closed in 2015 inclusively showed that the most tenants operate in the following
business areas:
Gas and oil companies, extracting companies (59%);
IT / telecommunication (12%);
Construction / development / engineering (9%);
Banking and financial service companies (4%);
Industrial companies (4%), etc.
Page 205
Chart 5. Tenants’ structure by business profile (based on leased areas occupied by tenant), 2015
Volume and take-up dynamics
Net take-up amounted to 125 thousand sq m of quality office space in 2015, which was mainly concentrated in
Class A - 77.5 thousand sq m or 62%.
Annual take-up was 3% lower than in 2014. Moskovsky Ave business district is still in great demand among
tenants where a lot of new supply is concentrated. The popularity of Central-1, Admiralteysky and
Embankments with views Business Districts has grown. This fact is explained by a large number of new projects
focused in these districts where there are large office units with rents not exceeding the market average.
Charts and table below show take-up dynamics in the market of Saint Petersburg.
Page 206
Chart 6. Take-up dynamics, 2002-2015, thousand sq m
Chart 7. Take-up structure, 2002-2015, %
Table 7. Take-up structure, 2002-2015, thousand sq m
Year
Class A
Class B
2002
0.5
22.3
2003
6.1
40.6
2004
9.8
43.7
2005
0.3
167.6
2006
12.2
133.4
2007
47.1
158.8
2008
73.3
144.8
2009
36.4
74.5
2010
56.8
158.3
2011
49.3
103.5
2012
89.6
83.6
2013
47.1
62.2
2014
84.1
44.6
2015
77.5
47.5
Page 207
Year
Total
2002
22.8
2003
46.7
2004
53.5
2005
167.9
2006
145.6
2007
205.8
2008
218.1
2009
110.9
2010
215.0
2011
152.8
2012
173.3
2013
109.3
2014
128.7
2015
125.1
Table below shows lease transactions exceeding 1.5 thousand sq m, closed in 2015.
Table 8. Largest lease transactions, 2015
Company name
Office area, sq
m
Gazprom
Gazprom
Gazprom
Gazprom
ViPS Group
Baltiyskiy Bank
Gazprom
Sperasoft
Confidential
Avito
SAP
N/a (IT company)
Werfau
NSN
Confidential
Geropharm
IT company
45.800
28.000
20.100
7411
7000
5000
3115
3000
2317
2300
2118
2026
1937
1719
1529
1500
1500
Office centre
Victoria Plaza
(under construction)
Victoria Plaza
Eightedges
Fabrika
Nevskaya Ratusha
Senator
Sinop
Jenergija
Hanin Plaza
Saint Petersburg Plaza
White Nights
Leto
Chajkovskogo, 29
4
Kersten House
Nevskaya Ratusha
Leto
Address
2, Pobedy Sq
2, Pobedy Sq
45, Malookhtinsky Ave
140, Moskovsky Ave
11, Degtjarnyj line
37, Professora Popova Ave
22, Sinopskaya Emb
5, Kievskaya
6-8, Drovjanaja Ave
64, Malookhtinsky Ave
23, M. Morskaja St
44, Sverdlovskaya Emb.
29, Chajkovskogo St
12, Sedova
25, Krasnogo Kursanta St
11, Degtjarnyj line
44, Sverdlovskaja Emb
Class
A
B
A
B
A
A
A
B
B
A
B
A
B
B
B
A
A
Dynamics of rental rates
There was a gradual reduction in asking rental rates both in Class A and B during the year. The average decline
amounted to 6% in properties of each class. The unstable economic situation, reduction of activity in the office
market and a fairly high level of vacant space prompted landlords to make concessions to potential customers
in the form of various discounts and bonuses. This, in turn, resulted in erosion of relatively inexpensive supply
from the market, especially in Class B.
Rental rates in operating class A premises range from 890 to 2000 rub/sq m/month (including VAT and OPEX).
The range for class B premises is 650-2100 rub/sq m/month (including VAT and OPEX).
The average asking rental rates for Class A office centres reached 1,513 rub./sq m/month, while for Class B office
centres – 1,100 rub./sq m/month by the end of 2015 (incl. VAT and Operating Expenses).
Page 208
Chart 8. Dynamics of average rental rates (including OPEX and VAT), rub / sq m /month, Q1 2007-Q4
2015
Factors, influencing rental rates
Besides the characteristics, defining the class of an office center, the following factors influencing the rental rate
should be noted:
Location. High-priority influence factor. Office location prestige still plays the most important role for
potential tenants. Sometimes a concrete area, where the companies’ activities are focused, is
important;
Access convenience. In determining the location of the future office availability of transport routes
and main highways is important for a consumer. Proximity to the metro stations is significant;
Property quality. Combination of technical, functional and architectural features of the building;
The building infrastructure. Additional opportunities for tenants, availability of meeting rooms, a bank
branch, a cafe / restaurant, fitness center, beauty salon and so on;
The storey, where the placement of an office is assumed. As a rule, the higher the floor the better the
view, and therefore the rental rate is slightly higher. Rate may also be higher for rooms on the first
floor (in case of the presence of large traffic and pedestrian flows around the building);
Availability of parking. Due to the intense traffic situation in St. Petersburg, especially in the city
center, the availability of sufficient secure parking became important;
Leasable area. Rental price has inverse relation with a size of rental block (hold for the area of more
than 1000 sq m);
Tenant status. Owners of high-quality buildings are often willing to provide a discount for a wellknown company, which will attract other prestigious tenants. With the current relation of supply and
demand the amount of discounts can be quite large (especially for new properties);
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Operating expenses
The most vilely spread approach in the office real estate market in St. Petersburg is the approach of all-inclusive
rental rates, where OPEX and VAT are not sorted out from rental rates. This means that rental rate includes a
basic rental rate, OPEX and VAT.
Operating expenses include maintenance and utility costs. Maintenance means: cleaning common areas and the
territory adjacent to the building, maintenance of a building, (care of the facade, cleaning roofs, etc.), garbage
and snow disposal, security of engineering services and so on. A set of utilities includes heating, water supply,
sewerage, etc.
A tenant separately pays for electric power using a counter, according to the current rates.
Foreign developers/owners/managers of office centers rarely use the approach when rental rates, operating
expenses and utility costs are paid separately. Moreover, in this case the amount of operating expenses can be
changed due to changes in the applicable laws, inflation, rates for heating, cold water supply, garbage disposal,
etc. but no more than once a year.
Rent a parking space in a business center
The cost of renting a parking space depends on the class of a building, total number of cars in the car park
office center, type of parking (indoor parking is always more expensive than outdoor secured parking lot), the
distance from the business center of the city center. Range of asking rental rates of one parking space in
outdoor secured parking lot is wide enough – 1000 to 11 200 rub per month, including VAT (average – 5000
rub). Rental rates in indoor multi-level or underground parking are higher – from 4 000 to 20 000 rub per
month, including VAT (an average - 8700 rub). For business centers located in the city center with a limited
number of parking spaces a cost of renting a parking space can reach 5000-20 000 rub per month.
Currency of the contracts and escalation
The most common currency for the contract in the office market of St. Petersburg is rubles. There are few
examples of nominating rental rates in foreign currency (U.S. dollars or euros), mainly in objects owned by
foreign companies. For example: offices centers of Turkish development company Renaissance Development,
office center Airport City of Russian-Austrian Avielen A.G., office center Zinger House, owned by the Russian
company PAN etc.
But in 2015, due to the instability of the ruble, the owners of office buildings, who claimed rental rates in
currency change rates on ruble terms.
Escalation terms are negotiated with each tenant individually or may not apply at all. Typical conditions for
rental rates escalation in St. Petersburg are:
Escalation in ruble rental rates happen not more often than once a year, at a level not higher than
inflation, according to the Federal Statistics Service data on the previos year, or in the range of 8-10%
Annual rent escalation nominated in the foreign currency does not exceed 5%.
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Professional opinion regarding market development perspectives
The main office market trends
Last several years Saint Petersburg’s office property market has been booming under the influence of the
following key factors: variation of economic situation in Russia and the region; dynamic of investment; changes
in the city’s economic structure; growth/fall of demand as consequence of employment changes. During the
crisis period most of market indicators have decreased except market supply which has grown because of
completion begun projects.
Key office market trends
Supply
During the 2015 year the amount of office space increased by 161.6 thousands sq. m and equals
2, 135.8 thousands sq. m. Increase of new quality supply amounted to 7% for 2014.
The important tendency is market decentralization. Office properties appeared outside the city centre –
Class A premises have delivered in attractive industrial areas and even near the airport; Class B
buildings have appeared out of city border and a lot in the peripheral districts.
Demand
During 2015 there was a decrease of demand for office buildings in the market due to the high
expectations of landlords relatively rental rates, which was especially evident in the segment of Class A
office centers with long term exposure in the market.
For 2015 the market took up 125 thousand sq m. This is 3% less last year.
Vacancy rate in class A business centers amounted to 9.4%, in class B – 11.6% according to the data as
of 2015 Q4.
Most deals in the office market from 2009 to 2015 were concluded by companies engaged in the field:
oil and gas sector, information technology and construction/development companies.
Commercial terms
The average asking rental rate for Class A office premises at the end of 2015 Q4 amounted to 1513 RUB
/ sq m / month, including OPEX and excluding VAT, in Class B – 1100 RUB / sq m / month, including
OPEX and VAT.
The office buildings sales market is not clear, usually landlords try to find purchasers on their own and
often conceal the transfer of ownership. Amount of actual deals also remains confidential information.
Market supply forecast
Supply
At present, a large number of Class A and B projects are slated to go on the market. If this happens, then by the
end of 2017:
The volume in Class A will increase to 968.3 thousand sq. m (less than 1.4 times as much);
The volume in Class B will be more than 1,826.3 thousand sq. m (1.2 times as much).
Page 211
Chart 9. A forecast for the growth in the total volume of Class A and B business centers (sq. m), 20022017F, thousand sq m
Significant increase in high-quality market supply is expected in 2016. The total volume of high-quality office
space supply at the end of 2016 will amount to 2.6 million sq m, if the buildings under construction will be
commissioned in time. Thus, the total leasable area will increase by 13% in comparison to 2015.
Forecasted commissioning in 2016 will amount to approximately 300 thousand sq m, but will be offered for rent
177 sq. m.The largest projects are:
Victoria Plaza (2 phase) - business center of Adamant development company with total leasable area of
30 thousand sq m. The office center is located in the business district Moskovsky Ave.
Renaissance business park - business center of Turkish development company Renaisance development
with total leasable area of 21 thousand sq m. The office center is located in the business district
Embankments with view.
FORT TOWER- bisiness center of FORT GROUP development company with total leasable area of 20
thousand sq m. The future office center (class A) is located in the business district Moskovsky Ave.
Senator (2 phase, Chapaeva Street) - business center of Imperia holding development company with
total leasable area of 17 thousand sq m. The office center is located in the business district
Petrogradsky.
In 2017 will be commissioning – 153 thousand sq m. The long-term forecast (for after 2017) is less accurate, as
it is possible that some projects may come on or out of the market. In our calculations, we used adjustment
factors to compensate for this effect.
It should be noted that some investors refuse to real estate commercial projects with one function in favor of
residential projects with various components and / or mixed-use complexes, since such projects are less risky
and safe for the developer, and its smarter and more efficient in terms of the urban environment.
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In the future it would be correct to speak about cooperation future tenants with the developers till the
beginning of project development, because in this case all sides are winners: a tenant gets the necessary office
space, consistent with its requirements, and the investor has ready business, not an empty building.
As a result of the analysis and prediction of office segments in St. Petersburg we calculated the predicted values
in terms of supply of the market in general.
Chart 10. Dynamics of actual and forecasted high-quality office space delivery, take-up and vacancy
rates, 2002- 2017 F, thousand sq m
Territory development forecast
In 2016 the business district Moskovsky Avenue will receive active development; over a third of the declared
areas will be located in this business district of St. Petersburg.
Besides, in the mid-term (3-5 years) central districts of St. Petersburg and the adjoining embankments with
views will continue to be popular for office development and redevelopment, due to the prestige and
convenience of transportation from all parts of the city. But at the same time these areas are highly competitive
and the presence of land plots for new construction in this location is limited, in contrast to the peripheral
areas.
The main development potential has the territory of the first industrial zone11 of Saint Petersburg, which has big
opportunities for the reconstruction of existing facilities and for new construction in redevelopment areas.
11
Areas of St. Petersburg, that were developing for industrial use from the 18th century until the first half of the 20th century: the Narvskaya
part of Kirovsky district (Sea Port), area along Obvodny Canal on the both sides, the northern left bank of Nevsky district, the territory of
Sinopskaya Emb, Sverdlovskskaya Emb , area along the river banks of Bolshaya Nevka and Malenkaya Nevka, area along river Smolenka,
southern part of Vasilievsky Island (Harbour).
Page 213
More and more objects will appear in the peripheral areas but the opportunities for development of such areas
will depend on development of the other segments of real estate and transport infrastructure in these areas.
Take-up
In the next year take-up will amount to 110-120 thousand sq m. In a stable economic situation in 2016-2017
take-up is expected to remain at the level of 120-150 thousand sq m per annum.
Vacancy and rental rates
We expect that in 2016 due to the commissioning of significant volume of new office space, which should enter
the market, the vacancy rate could exceed 12%. In case of a stable economic situation in the country, vacancy
rate in office centers of the both classes could be at the level of 10-14% in 2016-2017.
Taking into account the current situation in the office market and forecast authorities’ forecast of the future
economic development of the country, we don’t expect growth in rental rates in 2016-2017.
Rival projects in the proximate site neighborhood. Analysis of competitive landscape changing
perspectives. Kazanskaya Street
Existing competition analysis
For competitive environment analysis there was chosen the zone of Central-1 and part of Admiralteysky
business district. Office centers located in the close were studied in the Kazanskaya Street.
Taking into account a possible office buildings class, objects environments and location descriptions, the
following A, B and C class business centers are considered as the competitors.
In this zone 14 operating office centers are located, which are estimated for potential tenants as equivalent. The
total leasable office space in this area is 77.5 thousand sq m. More than a half of business centers in the area of
the competitive environment have occupancy over 90%. Not filled with tenants business centers at the Au Pont
Rouge (2 and 3 phase) due to high rents. Also a high vacancy rate for the same reason in the office center
Atrium.
Rental rates in the competitive zone are in the range from 735 to 1850 RUB / sq m per month (including VAT
and OPEX). Average rental rate are:
Class A - 1850 RUB / sq m per month (including VAT and OPEX).
Class B – 1485 RUB / sq m per month (including VAT and OPEX).
Class C – 881 RUB / sq m per month (including VAT and OPEX).
The vacancy rate in the area of competitive environment is 15%. In absolute terms, the vacant 11.3 thousand sq.
m:
Class A – 31% (7.2 thousand sq. m). High vacancy rates associated with the empty tenant office center
have Au Pont Rouge, where shopping and apartment areas were redeveloped into office
Class B – 11% (1.7 thousand sq. m) - The average for the city
Class C – 6% (2.6 thousand sq. m) - The average for the city
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Table 9. The list of existing competitors in the zone of influence of the property, Q4 2015
on
map
1
2
3
4
5
6
7
8
9
10
11
12
13
14
Property Name
Au Pont Rouge
Au Pont Rouge
(2 phase)
Au Pont Rouge
(3 phase)
Bolloev Center
White night
Atrium
NOVOISAAKIEVSKIJ
Admiralty House
Lenizdat
Na Sennoy
Trezubec / Mir
Kazanskij
Mariinskij
Alva
Address
75-79, Moyki river
Emb
73, Moyki river
Emb
75-79, Moyki river
Emb
4, Grivcova lane
23, Malaja
Morskaja St
1/25, Kazanskaja St
24, Jakubovicha
3, Konnogvardejskij
St
59, Fontanki river
Emb
14/35, Spasskij lane
, Efimova St
7, Kazanskaja St
58, Moyki river
Emb
8, Apraksin lane
Class
A
A
A
A
B
B
B
B
C
C
C
C
C
C
The
total
area, sq.
m
Leasable
area, sq.
m
Vacancy
Occupancy
rate, %
Rates,RUB/sq.
m p.m.
(including
VAT, and
OPEX)
15,000
9280
-
100%
1850
5598
4199
4199
0%
1850
2303
1957
1877
0%
1850
9040
8150
1160
86%
1850
7333
5500
-
100%
1800
5300
4240
1523
64%
1500
3900
3198
-
100%
1400
2500
2000
125
94%
1300
12,800
9600
1166
88%
735
11,000
9000
8335
8250
8000
6251
115
180
413
99%
98%
93%
1200
1239
739
6133
4600
393
91%
1176
2919
2296
103
96%
1000
Office centers in the zone of the competitive environment are presented in the map below.
Page 215
Map 2. The existing competitors in the zone of influence
Currently being built business centers in the environment area is not competitive.
Project recommendations
Based on the market researches and competitive environment analysis the most probable rental rates for the
Properties within the portfolio are:
Kazanskaya 36 – 1,000-1,100 RUB/sq. m p.m. (including VAT, and OPEX)
Zolotaya Kazanskaya – 800-900 RUB/sq. m p.m. (including VAT, and OPEX)
Kazanskaya 60 – 900-1,000 RUB/sq. m p.m. (including VAT, and OPEX)
These rental rates consider buildings’ quality, location and transport accessibility.
Page 216
Rival projects in the proximate site neighborhood. Analysis of competitive landscape changing
perspectives. Paradny Kvartal
Existing competition analysis
For competitive environment analysis there was chosen the part zone of Central-2 (excluding street located
near Nevsky Avenue).
Taking into account a possible office buildings class, objects environments and location descriptions, the
following A, B and C class business centers are considered as the competitors.
In this zone 21 operating office centers are located, which are estimated for potential tenants as equivalent. The
total leasable office space in this area is 123 thousand sq m. More than a half of business centers in the area of
the competitive environment have occupancy over 90%. Not filled with tenants business center Ligovskij, 6
(bad premises plan) and low occupancy at Nekrasova, 14 due to high rental rents.
Rental rates in the competitive zone are in the range from 900 to 2000 RUB / sq m per month (including VAT
and OPEX). Average rental rate are:
Class A - 1528 RUB / sq m per month (including VAT and OPEX).
Class B – 1294 RUB / sq m per month (including VAT and OPEX).
The vacancy rate in the area of competitive environment is 12%. In absolute terms, the vacant 14.5 thousand sq.
m:
Class A – 9% (6.9 thousand sq. m). High vacancy rates associated with the empty tenant office center
have Ligovskij, 6 and multifunctional building Preobrazhenskij dvor due to bad premises plan.
Class B – 15% (1.7 thousand sq. m)/ High vacancy rates associated with the empty tenant office center
have Nekrasova, 14 and Vosstanija, 18 Nevskaja Ratusha due to high rental rents.
Table 10. The list of existing competitors in the zone of influence of the property, Q4 2015
on
map
1
2
3
4
5
6
7
8
9
10
Property Name
Nevskaja Ratusha
(building 2)
Nevskaja Ratusha
(building 3)
Sinop
Preobrazhenskij
dvor
Grecheskij
Trubeckoj
Orlov
Ligovskij, 6
Zolotaja
Shpalernaja
Goldex
Address
11, Degtjarnyj lane
11, Degtjarnyj lane
22, Sinopskaja Emb
26, Litejnyj Ave
13-15, Ligovskij Ave
9, Paradnaja St
7, Paradnaja St
6, Ligovskij Ave
54, Shpalernaja St
36, Shpalernaja St
Class
The
total
area, sq.
m
Leasable
area, sq.
m
Vaca
ncy
Occup
ancy
rate,
%
Rates,RU
B/sq. m
p.m.
(includin
g VAT,
and
OPEX)
A
27 182
23 423
-
100%
-
A
18 300
15 234
535
96%
1 974
A
21 192
12 020
1 732
86%
1 958
A
15 000
11 500
2 854
75%
1 200
A
A
A
A
4 500
5 075
4 877
3 565
3 400
3 318
3 184
1 824
1 823
100%
100%
100%
0%
1750
1500
1500
1 500
B
14 000
7 500
-
100%
900
B
11 009
7 400
-
100%
1400-
Page 217
on
map
11
12
13
14
15
16
17
18
19
20
21
Property Name
Nekrasova, 14
Vosstanija, 18
Kovenskij, 5
Bashkirov
B&D
NRK
Kacus
Chajkovskogo, 44
Novgorodskaja,13
Sinopskaja 68-70
Moiseenko 24
Address
14, Nekrasova St
18, Vosstanija St
5, Kovenskij lane
52, Sinopskaja Emb
50, Sinopskaja Emb
3, Kaluzhskij lane
8, Tverskaja St
44, Chajkovskogo St
13, Novgorodskaja
Ave
68-70, Sinopskaja
Emb
24, Moiseenko Ave
Class
The
total
area, sq.
m
Leasable
area, sq.
m
Vaca
ncy
Occup
ancy
rate,
%
B
B
B
B
B
B
B
B
7 000
6 350
6 490
4 600
3 500
3 800
3 576
2 373
5 600
5 400
4 868
3 800
2 800
2 700
2 682
1 898
3 985
2 061
749
611
70
89
29%
62%
100%
80%
78%
100%
97%
95%
Rates,RU
B/sq. m
p.m.
(includin
g VAT,
and
OPEX)
1500
1300
1350
1200
1100
1 291
1500
1350
1300
B
2 551
1 855
-
100%
900
B
1 584
1 584
-
100%
-
B
1 512
1 210
-
100%
-
Office centers in the zone of the competitive environment are presented in the map below.
Page 218
Map 3. The existing competitors in the zone of influence
Currently being built business centers in the environment area is not competitive.
Project recommendations
Based on the market researches and competitive environment analysis for the Properties (Paradny Kvartal BC 11
and Paradny Kvartal Phase 5, bldgs. 17, 18) within the portfolio:
The most probable rental rate is – 1,100 RUB/sq. m p.m. (including VAT, and OPEX). This rental rate
considers the absence of conditioning and finishing in the buildings.
Installing central air conditioning and interior finishing mar increase rental rate up to 1,500 RUB/sq. m
p.m. (including VAT, and OPEX).
These rental rates consider buildings’ quality, location and transport accessibility.
Page 219
Office market overview of Moscow
Key indicators
Key indicators. Dynamics*
Class A
Total stock, thousand sq m
including, thousand sq m
15,227
3,712
Delivered in Q1-Q3 2015, thousand sq m
including, thousand sq m
Class B
11,515
464
296
168
25.5
17.2
(-4.1 p. p)
(-0.1 p. p)
506
(-14.2%)
26,670
(-11.5%)
294
(-6.7%)
15,452
(-10.3%)
Rental rates range**
$/sq m/year
rub./sq m/year
350-1,200
14,000-45,000
250-650
8,000-35,000
Average OPEX rate, rub./sq m/year
4,000-7,500
2,500-4,500
Vacancy rate, %
Average weighed asking rental rate**, $/sq m/year
Average weighed asking rental rate**, rub./sq m/year
* Compared to Q4 2014
** Excluding operational expenses utility bills and VAT (18%)
Source: Knight Frank Research, 2016
Supply
The supply volume of delivered quality office space in Moscow amounted to 15.2 million sq m as for the end of
Q3 2015 with 24% accounted for Class A office space.
The decline in demand and limited opportunities to attract available financing led to a marked reduction in
development activity: only several projects were announced throughout the year and the estimated delivery
dates of facilities already under construction were postponed in most cases. The delivery volume of office space
totaled 464 thousand sq m for 9 months of 2015, which is 55% less than the same period last year.
Page 220
Chart 11. New delivery volume dynamics for Class A and B offices
The imbalance of supply and demand is illustrative of the current state of the office market: the vacancy rate of
Class A offices is 25.5%, while in Class B - 17%. Class A office market experienced a decrease in the vacancy rate
within 9 months of 2015: optimization of office space was performed by tenants together with withdrawal from
the market of the large office units or whole buildings, which is due to a number of already closed transactions
or with the large ones that are currently under negotiation, resulting from asking commercial terms level
decline.
Chart 12. Dynamics of delivery, take-up and vacancy rates of Class A and B offices
If we compare the current market situation with the crisis period of 2008-2009, when the vacancy rate was at
record maximum at the end of 2009, it is worth noting that today the volume of vacant space is more than 1.5
times higher in the absolute values than the last crisis level. The total stock of available office space in delivered
Page 221
Class A and B buildings is 3 million sq m available today for tenants and end-user buyers.
Demand
The net take-up of quality office space fell by almost 60% year-on-year for the period from January to
September and amounted to 166 thousand sq m. The activity in the office real estate market over the first 9
months of 2015 was largely due to the high volatility of the Russian national currency. So, in 2015 the first
quarter faced the minimum value of the volume of lease and purchase transactions of high-quality office space
amid an extremely high degree of uncertainty in the economy. But by the end of the quarter after the
stabilization of the ruble the companies returned to negotiation process, resulting in an increase in the volume
of transactions in Q2 2015. In turn, Q3 2015 was the most active: the intentions for relocation were announced
and lease and purchase transactions of office space were completed, these transactions were the largest ones
from the beginning of the year. It shall be emphasized that tenants were actively involved in negotiations on
the revision of the lease terms: the share of such transactions increased, reaching a total of 63% of all
transactions for the first 9 months of 2015 amid falling rates and weakening ruble from Q4 2014.
The transaction structure in terms of its sector distribution of the companies was influenced by several large
transactions of the first three quarters. Adidas leased circa 20 thousand sq m of office space in Krylatsky Hills
business park, thus the share of companies of the retail sector increased to 12%, but in the same period of 2014
it was insignificant. The increased share of state authorities in the structure of demand for quality office space is
due to the lease of about 20 thousand sq m of office space by the Government of the Moscow region in Orbita
business center (phase II).
Page 222
Map 4. Key office space lease and purchase transactions closed in Q1-Q3 2015
The share of companies of the financial and banking sectors continue to decline, which was largely influenced
by the imposure of sectoral sanctions from 2014 and the credit and financial constraints: the index reached its
minimum value of historical significance for the first three quarters - 3% of total transactions.
Page 223
Chart 13. Tenant mix
The largest volume of lease and purchase office transactions in the first three quarters of 2015 were located in
the facilities located near the Moscow Ring Road (34%) due to three major transactions with the total volume of
more than 50 thousand sq m in the office centers of this area. However, companies still have the opportunity to
lease an office in more developed areas closer to the center of Moscow on rental rates comparable to the rates
in the outer areas.
The companies that leased offices within the Garden Ring were the most active in the renegotiation of
commercial terms: its share increased from 30% to 40% for the first 9 months of 2015 compared with the same
period of 2014. The companies that had dollar lease agreements paid 30-40% more than the current rental
rates, today they are forced to revise the terms of the lease.
Page 224
Chart 14. Distribution of deals by location
Commercial terms
The average asking rental rates for quality office space in Moscow were going down over the three quarters of
this year. The average rental rates in Class A offices denominated in US dollars dropped below historical lows
and reached 506 $/sq m/year and at the offices of the Class B - 294 $/sq m/year, falling by 14% and 7%,
respectively, for the first 9 months of 2015.
In the third quarter of the year the weighted average asking rental rates in ruble terms reached the level of
26,670 rub./sq m/year in Class A offices and 15,452 rub./sq m/year in the offices of Class B.
Chart 15. Average asking rental rates dynamics for Class A and B offices denominated in USD
Page 225
Chart 16. Average asking rental rates dynamics for Class A and B offices denominated in RUB
We are now witnessing a situation when the landlords of vacant office space are still trying to reduce the asking
rental rates after an active reduction of the asking commercial terms in Q4 2014 – Q1 2015, resulting in a slight
correction of the indicator. Therefore, the smallest decline in the weighted average indicator in 2015 was
observed in the third quarter: compared with Q2 2015 the rental rates declined by less than 1% in dollar terms
in the offices of Class A and by 1.3% in Class B, the decline in ruble terms was about 2% both in the offices of
Class A and Class B.
The development of ruble-denominated market which had started at the end of 2014 was continued during Q3
2015. Today a growing number of landlords are willing to sign long-term ruble agreements in contrast to H1
2015, when the terms of exchange rate fixation or exchange rate band were available only for 1-2 year of the
lease term.
Forecast
The current year will show a decline of the volume of office space delivered by 56% after the record high value
of 2014 over the last 5 years. Last year's forecasts of the volume of office space, scheduled to be commissioned
before the end of 2015 were at the level of 1 million sq m, but according to the adjusted plans of developers
the volume of new space to be delivered will be 620 thousand sq m.
The implementation of faciliites under design stage or at the initial construction stage was rescheduled in 20142015. Thus, we expect that the delivery volume of Class A and B offices in 2016 will be at the level of 2015 and
will amount to 600-650 thousand sq m.
In contrast to the 2008-2009 crisis the country's economy and, consequently, the office real estate market
expects a lengthy recovery period. According to the conservative forecast scenario of the Ministry of Economic
Development the Russian economy will demonstrate growth not earlier than in 2017. The volatility in the oil
markets and an unfavorable geopolitical background will continue to contribute to the instability of the ruble.
However, the market has adapted to changing conditions: we do not expect a substantial reduction of asking
rental rates in the current environment and the decrease of the vacancy rate towards the end of 2016 is
Page 226
possible amid the reduction of new supply. We believe that the market activity will be motivated by a desire of
the tenants to optimize the lease terms and upgrade the class of the leased premises.
Table 11. Moscow submarket data. Key indicators
Page 227
Rival projects in the site immediate neighborhood
Table 12. The list of existing competitors in the zone of influence of the property located at 16, Tverskoy bulvar, Moscow
Name
Comparable 1
Comparable 2
Comparable 3
Comparable 4
Comparable 5
Location
18, Staropimenovskiy
pereulok, Moscow
9, Tverskaya street, Moscow
bld. 4, 32, Dmitrovka street,
Moscow
17, Chistoprudniy bulvar,
Moscow
20, Sadovaya-Kudrinskaya
street, Moscow
Source of
information
http://realty.dmir.ru/sale/ofismoskva-staropimenovskiypereulok-110118320/
http://www.cian.ru/sale/comm
ercial/14025557/
http://realty.dmir.ru/sale/ofismoskva-bolshaya-dmitrovkaulica-114212936/
http://www.slrealty.ru/comme
rce/sale/osz/cao/lot10251/
http://www.cian.ru/sale/comm
ercial/13882892/
1,934,250,000
1,500,000,000
1,650,000,000
2,585,000,000
2,158,550,460
249,375
265,027
324,995
314,630
317,434
Picture
Asking price,
rubles, incl.
VAT
Asking price,
rubles per sq
m, incl. VAT
Page 228
KF Ref: PO-17/2015
Table 13. The list of existing competitors in the zone of influence of the property located at 22, Avtozavodskaya street, Moscow
Name
Comparable 1
Comparable 2
Comparable 3
Picture
Location
Source of
information
Asking price,
rubles, incl.
VAT
Asking price,
rubles per sq
m, incl. VAT
Land plot, ares
bld. 2, 16, Avtozavodskaya street, Moscow
nd
bld. 1, 5, 2
Paveletskiy proezd, Moscow
bld. 1, 21, Avozavodskaya street, Moscow
http://www.cian.ru/sale/commercial/13945447/
396,952,000
965,000,000
1,193,200,000
164,779
193,000
200,000
0,209778
0,6477
0,5321
Table 14. The list of existing competitors in the zone of influence of the property located at 16, Davydkovskaya street, Moscow
Page 229
KF Ref: PO-17/2015
Name
Comparable 1
Comparable 2
Comparable 3
Comparable 4
Picture
Location
Source of
information
Asking price,
rubles, incl.
VAT
Asking price,
rubles per sq
m, incl. VAT
bld. 1, 15, Starovolynskaya street,
Moscow
http://www.cian.ru/sale/commercial/
5098138/
80, Michurinskiy prospect, Moscow
bld. 2, 1, Minskaya street, Moscow
http://www.cian.ru/sale/commercial/
8441140/
http://realty.dmir.ru/sale/ofismoskva-minskaya-ulica-112972875/
bld. 1, 1, Nezhinskaya street,
Moscow
http://realty.dmir.ru/sale/ofismoskva-minskaya-ulica-112972875/
260,300,000
346,000,000 .
27,000,000
140,769,090
406,084
380,220
375,000
351,045
Page 230
KF Ref: PO-17/2015
Residential market overview of St. Petersburg and Leningradskaya Oblast’
In location description the following concepts and terms are used:
1.
2.
3.
The city: the following administrative districts of St.Petersburg included: Admiralteisky, Vasileostrovsky,
Vyborgsky, Kalininsky, Kirovsky, Krasnogvardeisky, Krasnoselsky, Moskovsky, Nevsky, Petrogradsky, Primorsky,
Frunzensky, Central (Tsentralny).
ADS: suburban administrative districts subordinate to St. Petersburg: Kolpinsky, Kronshtadtsky, Kurortny
(Resort), Petrodvortsovy, Pushkinsky.
Suburbs: settlements of Leningradskaya Oblast’ (LO) adjacent to St. Petersburg city borderline:
Vsevolozhsky:
Bugry, Vartemyagi, Vsevolozhsk, Zanevka, Kal’tino, Koltushy,
Kudrovo, Luppolovo, Mistolovo, Murino, Novoye Devyatkino,
Romanovka, Sverdlova, Sertolovo, Toksovo, Scheglovo, Yukki,
Yanino-1, Yanino-2
Gatchinsky:
Taitsy
Kirovsky:
Otradnoye
Lomonosovsky:
Gorbunki, Lagolovo, Nizino, Novogorelovo, Novosel’ye, RusskoVysotskoye, Uzigonty
Tosnensky:
Nikol’skoye, Fedorovskoye, Tel’mana
Supply12
Property market is subject to a certain cyclicity connected primarily with the economic situation. Administrative
factors affect the market as well. E.g., a rather sharp reduction of housing under construction volumes took
place during 2006-2007 due to previous changes in legal base, especially in order of providing land for
development and in the costs of housing construction regulation by the government.
Many developers had their projects frozen on 2008 crisis arrival. That has been caused both by the reduced
effective demand and by the outflow of credit funds from development. The reduction of demand in high-class
segments has forced the developers to aim at customers with less income through projects downgrading and
reconception. As a result, conceptual quality of the projects has degraded despite of the supply growth (which
became possible due to reduced take-up and real property market general inertness), at exposure time grown
up.
The market dynamics was positive in 2011: all residential segments active, transactions with plots of land for
housing development have grown in number since 2010. 500 ha for residential developments were sold within
the two years, only through tenders held by the city authority; in addition, buildings for demolition or
reconstruction were sold, many deals on land plots held freehold completed.
Positive changes in every residential market segment of St. Petersburg and LO were observed in 2012 - 2014.
Currently one can speak of stabilized construction volumes within the city borderline, largely due to a reduction
of spots for development and construction expanded outside of St. Petersburg populated areas. The market
12
the amount of apartments available to a buyers at the moment
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volume of St. Petersburg (not counting ADS) and its suburbs has counted 10.9 mn sq m in 2015 (by GBA13 of
residential complexes offered for sale).
Suburban projects take the share of 39%, which is 4.2 mn sq m. The complex development of territories
contributed in the considerable increase of residential construction volume, e.g. in such settlements as Kudrovo,
Murino, Novoye Devyatkino, Bugry, Koltushy, etc. Construction in these locations has activated in 2012.
Chart 17. General building area of housing under construction in St. Petersburg and its suburbs,
thous. sq m
At the moment the share of apartments unsold in the residential market takes 48% and 50% in
respectively, 39% in
and
class
class. This share is 33% in the suburbs.
Market structure analysis by class reveals the following pattern:
active A-class housing development has enhanced up to 2004, then its volume has stabilized. A drop in supply
volume was registered in the market since 2006, within the overall trend of the market transition to new rules of
providing plots for construction and of natural decrease in areas for development in the traditionally prestigious
locations. It’s worth noting that the elite residential market segment remains very limited, its share in the
volume that has oscillated between 9-10%, is now ca. 3%.
Business class share is 15%. Projects of former industrial zones redevelopment or of non-residential buildings
reconstruction have essentially contributed in the segment progress. This trend was actual during the recent
years, reflected in B-class supply changing structure: growing ‘comfort’ segment, more obtainable by price and
differing from the ‘business’ segment by apartment types’ ratio and by other quality parameters.
13
GBA – gross building area
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Mass housing market grew up to 2004-2005. Then a period of stagnation came, caused by the new mechanism
of land for development portfolio formation having been introduced. 2008 was marked by an active build-up in
mass segment construction volumes. Post crisis period is characterized by a visible shift in developers’ activity
to suburbs and districts of Leningradskaya Oblast’ adjacent to the city border, due to exhaustion of so-called
‘sealing construction’ within developed blocks, and also to
transition from single-building construction to
block development of former industrial areas. At the time being the total area under construction in suburban
zones is comparable to that within the city.
A sharp increase in new constructions number in urban sleeping areas, former industrial zones (e.g. Moskovskie
Vorota residence, projects at Marshala Blyukhera Ave – or Prospect in local terms) and at the outskirts of
existing residential areas (e.g., Lastochkino Gnezdo, Novaya Kamenka, Novoorlovsky, Yuntolovo et al.) is
observed since 2013-2014..
The share of C class counted 43% within St. Petersburg and 39% in the suburbs in 2015.
Chart 18. Supply by class, %
The housing properties offered for sale totaled 2.86 mn sq m within St. Petersburg and 1.4 mn sq m in the
suburbs in 2015.
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Chart 19. Dynamics of the residential supply offered for sale by class, thous. sq m
The increase in supply was negligible during 2009-2010, the pace of constructions that have already started has
slowed, and developers experienced a current liquidity crisis due to extremely low purchasing capacity,
especially for projects at early stages of construction. For that reason the supply continued shrinking up to
2012, when several large block-development projects in
and
classes entered the market. Actively enhancing
supply (through new large-scale residential projects mostly of block development commissioned) was observed
in the next few years, it finally slowed in 2015. Both the lowing number of available land plots for development,
as well as huge stock of available units for sale are the reasons for this. Ca.2.3 mn sq m of residences within
the city border and 1.5 mn sq m in the suburbs have entered the market in 2015.
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Chart 20. New properties entering the market by class, thous. sq m
Project enlargement in parallel with their number reduced is a sharply expressed tendency of modern
construction. The ‘seal construction’ is gradually giving way to sufficiently large territorial developments. The
trend might be seen in every segment. Severnaya Dolina, Novaya Okhta, Solnechny Gorod (not taking the
projects in LO suburban territories) can be considered the largest in mass segment. Tsarskaya Stolitsa, Graf
Orlov, Riverside and ‘Leningrad’ projects are among the biggest in B class. Leontyevsky Mys, Privilege and
Russky Dom play the same role in elite segment.
Purchasing a unit in a big residential complex is the only way to providing oneself a homogeneous social
environment, from a customer’s point of view, which is particularly important for A and B classes, and is gaining
popularity in
segment.
Setl City with its 10% share (due to suburban projects prevailing), LenSpetsSMU and ‘LSR. RE North-West’
taking 6% shares each of the housing under construction total supply, are the market leaders in St. Petersburg
and Leningradskaya Oblast’. There are just several developers capable of constructing 5 projects and more
simultaneously. The large companies have retained their leadership in the market, and their market share is
growing every year. The total share of market leaders has grown by 2% in the period of 2013 - 2015.
Page 235
Chart 21. Housing under development volume by developers, %
Petrogradsky and Central (Tsentralny) districts are the territorial leaders in high-price class new residential
development, their share in the volume totals 46%, owing to several large-scale block-development and
redevelopment projects situated there.
Chart 22. A and B class residential construction volume by district, sq m
Vsevolozhsky district of LO, with its 3.9 mn sq m of residences under construction is the undisputable leader of
mass segment by offers’ number. Primorsky and Nevsky districts share the leadership within the city borderline.
Page 236
Chart 23. Housing under construction volume in C class by district, sq m
In the residential market of Saint-Petersburg class A residential properties should be located only in prime
locations of the historical city centre (and nowhere else but historical centre). If this requirement is fulfilled, a
residential property relates to A class. In the map below we highlight prime residential real estate areas.
Page 237
Map 5. Prime residential areas
Chart 24. Ratios and mean areas of 1-, 2-, 3-, 4-room and multiroom units in model projects, sq m and %
Class
Page 238
Class
Class
Page 239
Class C
Suburb
Typical ratio of different unit types in B class is represented by 1-room and 2-room flats, taking approximately
equal shares of 32%. 3-room units’ percentage in the segment is also big, counting ca. 26%.
class units are
more comfortable compared to mass segment, thanks to spacious bedrooms and to auxiliary premises
(dressing and storage rooms, etc.).
Principal supply in C class is presented by small single-room units, over 40% in the ratio. The recent trend in
mass segment unit-type ratio is observed. 2-room units of modest footage are taking the leading place instead
of studios that prevailed previously, due to the basic motive of property acquisition for the purpose of
improving living conditions.
Demand
The real property market cyclicity, undergoing recovery, stabilization and decline phases is reflected differently
in sales’ structure by property classes. E.g., mass market demonstrates violent swing in volume depending on
the cycle phase. Elite segment is relatively constant, which is dependent mostly on concrete attractive offers
present in the market. Business class takes the intermediate position between the two above-mentioned
segments.
A sharp rise in demand in all segments occurred since the 2
nd
half of 2013 with the beginning of foreign
currencies’ appreciation. The highest buying activity over the past few years was observed in the residential
property market against a background of high volatility of the currency in 2014. The customers have begun
regarding real estate as virtually the only reliable way of investing.
The demand level in 2015 was high, higher by some indicators, than that of stable 2013. Areas sold in the last
year have totaled 42% less compared to the peak figures of 2014.
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Chart 25. Demand dynamics by class, thous. sq m
Sales show tendencies, general for the market:
Sales remained at high level not dependent of a project’s characteristics during active growth periods.
A developer should have offered better quality at competitive price to provide a good sales pace
during 2009-2010. The pace of projects’ realization has decreased by 2-3 times, compared to the precrisis.
Sales volumes have grown significantly in 2011 and reached the 2007 level.
The current oscillation in demand and its volume moderation are caused by supply conditions and by
shifting of a noticeable demand towards new low-budget developments in Leningradskaya Oblast’.
Area of housing sold in the suburbs totals 42% of the whole St. Petersburg volume of the sold housing.
Typical sales’ structure by unit types and their average areas in ,
and
residential segments, looks as follows.
A class
3-bedroom units take the leading position in the total volume of completed transactions. Due to the fact that
improvement of living conditions and move to the appropriate district are the main objectives of luxury
apartments purchase, with an increase of the object readiness the number of transactions in favor of a larger
number of bedrooms increases.
The most demanded unit size by each unit type within A class is as follows:
1 bedroom – 11% – over 57 sq m and more;
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2 bedroom – 31% - 74-78 sq m and over 103 sq m;
3 bedroom –37% - 131-140 and over 151 sq m;
4 bedroom –16% - 170-230 sq m;
5 bedroom and more – 5% –280-320 sq m.
Principal requirements:
1.
Location
Petrogradsky (mainly Krestovsky Island) and Central (Tsentralny) districts retain their permanent leadership
in territorial preferences of high-class housing buyers. Recently, increased the proportion of requests for
luxury housing on Vasilevsky Island. The buyers, for which the district has not played a fundamental role,
still exhibited the main interest in objects in Petrogradsky and Tsentralny district.
2.
Requirements to apartments:
Ceiling height 3 m, ideally 3.3 m;
Quality and convenient layouts;
Availability of dressing and storage rooms;
Availability of master bedroom;
The number of bathrooms in each apartment must correspond to the number of bedrooms, plus one
guest.
3.
Engineering
First of all buyers pay attention to the project quality, and to the materials of which it is erected. Modern
engineering solutions are of particular importance – high quality elevators, water purification systems,
telecommunication, ventilation and air conditioning systems.
4.
Underground parking (over 1.1 parking space per unit).
5.
Security systems: video surveillance and access control (fenced area, porches), separate entrances for
residents and visitors of built-in premises.
B class
The main demand B class is for 1- and 2-rooms units, which share in sales’ volume totals 70%. 3-room units are
also in good demand. Big-size units are demanded only in residential complexes with good views at water,
greens and horizon.
Studios – 5% - over 30 sq m;
1-room – 35% – 42-52sq m;
2-room – 33% – 64-78 sq m;
3- room – 22% – 91-110 sq m;
4- room – 4% – under 130 and 150-170 sq m;
5 rooms and more – 1% - 160-200 sq m.
Main requirements:
Page 242
1.
Location
Buyers pay attention to the parameters of commercial and social infrastructure, surrounding the residential
complex. If there are units with views on water or historical center in the project (at least on the upper
floors), the project can be classified in the higher market segment.
2.
Ceiling height over 2.8 m;
Quality and convenient layouts;
Availability of dressing and storage rooms;
2 WCs (bathrooms) in large-size units.
3.
Engineering
First of all buyers pay attention to the project quality, and to the materials of which it is erected. Utilities’
cost is of particular importance.
Nevertheless, high-quality elevators, water purification systems and
advanced telecommunications attract customers.
4.
Underground parking (0.5 – 0.7 of parking places per unit).
Buyers of business class are less demanding to car parks compared to buyers of luxury housing. Typically,
parking is in demand in the absence or limited space for free parking on the local area. Big footage units
buyers are also more likely to buy parking places in business class residences.
5.
Security systems: video surveillance and access control (fenced area, porches), separate entrances for
residents and visitors of built-in premises.
C class (C class in the suburbs included)
Studios and 1-room units are sold faster in
class than other unit types. Such units’ share in the total sales
volume may reach 80% in suburban locations. 2-
3-room units are sold at much lower pace. 4+-rooms unit is
purchased in 1 deal per 100 only. This is largely due to the offer parameters in projects under construction.
The most popular unit size by each unit type within C class is as follows:
Studios – 25% - under 29 sq m;
1-room – 41% – 33-41 sq m;
2- room – 25% – 53-63 sq m;
3- room – 8% – 75-80 sq m;
4- room – 1% – over 130 sq m.
Main requirements:
1.
Location
class residential complexes are represented in all city districts, concentrating at periphery and in the suburbs
(Shushary, Murino, Devyatkino, Kudrovo et al.).
2.
Ceiling height over 2.6 m;
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Convenient layouts;
Availability of basic finishing, lately gaining a growing popularity.
3.
4.
Engineering
Over the past few years, requirements to engineering in C class buildings remained virtually unchanged.
However, the developers in order to increase the attractiveness of their projects, have increasingly begun
to use self-contained heating systems and water purification systems.
Car parks: most residential complexes are provided with onsite parking. In case the project is provided
with underground parking, the availability of parking spaces must be at least one place per 3-5
apartments.
5.
Security systems: preferably a fenced area, access control to the residential complex and to the parking.
Factors affecting demand:
External factors
Despite the rise in prices, there is an increase in demand in the housing market in recent years. Among the
major factors of demand increase we highlight the following:
Change of situation in financial market;
Available mortgages (reduced requirements to borrowers, reducing mortgage rates).
Subsidized mortgage.
1.
Change of situation in financial market
Modern trends in the currency market show that keeping money in rubles becomes unprofitable. At the same
time, significant fluctuations in the official exchange rate against the Russian ruble make investing in foreign
currency risky. Therefore, customers are increasingly looking at real estate purchase as an alternative source of
capital preservation and growth. To Knight Frank research, in 2014-2015 the share of investment deals has
grown and remained at 10-11%, while typical investment purchases fraction usually does not exceed 5%.
2.
Available mortgages
According to the Agency for Housing Mortgage Lending (AHML), mortgage interest rates have shown steady
growth since 2011 in St. Petersburg. The most significant increase in this index has occurred in the Ist quarter
of 2012. By the end of 2012 the rates returned to pre-crisis levels. The mortgage loans volume increased by 1.3
times during the first half of 2014, compared to the same period of 2013 By the end of 2014 there was a
significant adjustment of interest rates, which was reflected in the reduction of mortgage lending. Realization
of the state program of subsidizing interest rates on mortgage loans to buy housing in new buildings has had a
significant support for the mortgage market, under which the borrower interest rate for the loan should not
exceed 12%. As a result, lowered interest rates for mortgage loans within this program vary between 9.9% –
11.9% (9.9% – 10.9% under AHML standards and 11.4% – 11.9% according to the most active market
participants).
To AHML official data, in 9 months of 2015 461.2 thous. mortgage loans totaling 761.8 billion rubles were
issued, which is 38% lower in value and 35% lower in number than in Jan-Sept 2014. Recall that in the first 9
months of 2009 the rate of decline in the mortgage market were twice as high (-83% compared to 9 months of
2008).
Page 244
The program of subsidizing mortgage loan interest rate has been prolonged until the end of 2016. Yet it is the
subsidizing that has allowed cushioning the fall in demand in the real estate market.
Internal factors
Ways of stimulating demand most popular among developers of residential market are as follows:
Payment by installments;
Postponed payment (e.g. a client pays a certain share of a unit value as an initial fee, the retainer is
paid the object putting into operation);
Discounts for the lump sum payment if the customer pays 100% of the apartment cost;
Purchase of a unit in a new constructed house in exchange of existing apartment (developer sells
real estate of a client, and the amount received is considered as payment for a new apartment);
Various mortgage programs in partner banks;
High quality finishing;
Parking space as a gift (hidden inclusion of parking space price in the apartment price).
The list of different promotions and offers is quite wide and depends on the ideas and capabilities of
developers. However, when deciding whether to purchase an apartment, the buyer pays attention to the
developer’s reputation and to his completed projects.
It is worth noting that customers become more
demanding and the legal situation is improving in their favor.
Developers have to receive necessary
permissions for construction and must sell apartments in accordance with the Federal Law No. 214.
Conclusions
Currently one can state that the demand is at high levels in all segments. In general, the number of units sold
during three quarters of 2015 is 26% higher than in 2013, though figures are below the peak of sales in 2014.
The decrease of sales volumes within St. Petersburg city is partly due to the demand shifting to suburban
territories, where 42% of all units are sold. High demand in St. Petersburg suburbs is explained, at least in part,
by more affordable prices. Thus the mean price of suburban residences is averagely 30% lower than of the
analogous offers in the city.
In business segment the main demand is for one-bedroom and two-bedroom apartments of small areas and
convenient layouts. The proportion of deals with 3-bedroom units is also high, since the improvement of living
conditions is the principal motive to purchase an apartment.
In mass segment 80% of transactions accounted for a small one-bedroom apartments and studios.
Demand for affordable housing is partly due to a number of economic and political events, currency
fluctuations, which led to an increase in the investment attractiveness of housing as the most reliable tool for
investment and saving funds.
Commercial Terms
High demand for housing under construction in the pre-crisis years served as a prerequisite for raising prices (at
the mean rate of 25-40% p.a.). Most of all, prices rose in 2006 (almost doubled). The number of people capable
Page 245
of buying property at the new prices, fell sharply. Due to the unfavorable situation with sales, especially at the
early stages of construction, in late 2008 - early 2009 developers have been forced to cut asking prices. Many
companies had to offer discounts in order to stimulate demand.
Effective demand is limited and although provides higher sales at times of market growth, it is not able to
sustain them for a long period. However, at the moment one can observe a tendency to active price growth in
all residential property segments, which lasts from 2010. Various options of commercial conditions, banks
intensification in the field of mortgage loans also have a positive impact on price dynamics.
Change in supply structure has a substantial impact on the elite market price dynamics, apart from economic
conditions.
Sharp fluctuations of mean price may occur in the periods of high-price segment objects
entering / quitting the market, e.g. in mid-2014, when sales were suspended in one of the most expensive
objects at that time.
Recent price dynamics in
and
class is mainly positive stable without sharp fluctuations. The price in
suburban areas is a distinctive feature, it has shown zero development, remaining unchanged during 2015.
Average prices in houses under construction in 2015 were as follows:
in elite class - 330.6 thous. rub./sq m
in B class – 156.7 thous. rub./sq m
in C class – 96.3 thous. rub./sq m
in suburban C class – 65.2 thous. rub/sq m
Chart 26. Average prices dynamics by class, rub./sq m
Price factor is determinant in mass market, strongly correlating with sales.
This explains the numerous
promotions and discounts from developers during the crisis or stagnation in the market. In addition, the supply
Page 246
specificity, laying in exposing of large-scale residential complexes, determines the need for developers to
maintain a high rate of apartments’ sales that also provides a moderate price dynamics.
Price fluctuations in business-class residential market are comparable mixedwith those in mass segment.
However, unlike the C class, where the high level of competition is a major deterrent to the significant rise in
prices, the business class has a great potential for pricing adjustments due to the variety of options and
parameters of objects specific to high class housing (e.g. modern engineering, exclusive design and finishing of
common areas et al.). At the same time, price fluctuations in C class correlate strongly with sales. This
relationship is also present in business class, but to a lesser extent. There are examples of successful projects in
B class, where the price relatively high for this class has no significant effect on the rate of sales. At the same
time, business-class housing is more than other classes subject to risks during periods of general downturn in
demand. This is due to typical buyer of business class housing, which is a "grown up" (in terms of career and
income) mass market buyer. In times of crisis buyers’ demand shifts towards more affordable C class housing
(because of falling income).
As a result, many developers are forced to organize numerous promotions,
discounts, which lower housing prices in this class more than in other segments.
Chart 27. Average price change by class, %
Page 247
Typical payment terms in the primary market
Payment by installments. Sales practice shows that the installment has a positive effect on the pace of project
implementation. With a small down payment, no payment for credit and flexible payment system, the range of
potential buyers, and accordingly, sales increase sharply.
Terms and conditions for installment payments, provided by large developers, are:
down payment – starting from 10%,
interest rate – 0%,
time – until the end of construction.
It is worth noting that lately new installment payment systems profitable for the buyer and alternative to
mortgage were spreading. The widest variety of such programs one can encounter in mass segment housing.
Among the most interesting are such as: a down payment of 20%, the remaining amount - after the house
completion (on average, 1.5 years after the first payment), without incurring any interest14.
Mortgage.
Currently standard terms are as follows:
down payment – starting from 20%,
interest rate – ca. 11,5% (rub.)
time – up to 30 years.
A loan in the amount of ca. 2 mn rub. for a term of 10 years is the most popular mortgage request, according to
market participants.
The average value of the ruble mortgage in January-September 2015 amounted to 1.65 mn rub. (1.73 mn rub. in 2014,
2.1 mn rub. in 2013). This trend, combined with macroeconomic indicators, give the reason to believe that the loan
amount will continue to shrink.
One-time payment. With this form of payment a system of discounts up to 10-15% of the value of the
property is applied, at 100% payment within a month.
Conclusions
The price situation in the housing market is characterized by strong growth in all segments. Current average
prices in national currency have reached pre-crisis levels in the mass market segment and in business class and
elite – have even surpassed them. At the same time in C class price growth is hampered by high competition,
while B class has a great potential for pricing adjustments due to the variety of options and parameters of
objects.
Pricing in elite segment is largely due to national currency fluctuations in recent years. Materials of foreign
production are used in construction of most elite projects. Growth in construction costs is forcing developers to
make adjustments in pricing of their residential complexes.
14
Payment by installments is interest free only for the interest is not stated in a sales contract. In fact price differs in case of 100% one-time
payment compared to payment by installments. In C class, e.g. the mean difference between the two prices is 20% (up to 30%), i.e.
payment by installments is higher.
Page 248
Professional opinion regarding market development perspectives
Active reduction of available spots for development in the city currently is forcing developers to go beyond the
city limits and explore the suburban area. Besides that development of former industrial areas is gaining
increasing popularity, and the number of announced projects of redevelopment throughout the city grows.
Due to the big scale of new residential projects the lack of social infrastructure availability which one can
already observe, will only get worse further. Therefore, small-scale projects within the populated St. Petersburg
areas will be in great demand and are to provide good growth in sales.
Against the backdrop of expanding the housing construction beyond St. Petersburg, interesting offers
appearing in the city, in an area with social and commercial infrastructure already formed, within walking
distance from a metro station, will be in high demand among potential buyers. However, a project should
possess a specific set of quality parameters for successful implementation – thought-out ratio of different
apartment types and areas, comfortable planning solutions, modern engineering of the house, rational
infrastructure.
Rival projects in the immediate neighborhood (residential premises or flats). Analysis of competitive
environment changing perspectives
A number of analyzed projects have a single competitive area, so for the purposes of this study they were
grouped into the following competitive locations:
Table 15. Groups of the competitive locations
Location
I.
II.
III.
IV.
V.
VI.
VII.
VIII.
IX.
X.
XI.
XII.
LSR Object
Smolny Park
Radischeva 39
Kovensky 5
Russky Dom
Nevsky 1
Fontanki 3
Nevsky 68
Verona
Dom na Dvoryanskoy
Osobnyak Truvorova
Europa City
Tri Vetra
Bogemiya
Moskovskoe shosse 3
Shuvalovskiy
Zapovednaya 51
Sofiya
VIVA
Kvartet
Yuzhnaya Aquatoriya
Kalina-park
Tsivilizatsiya
Novaya Okhta
Page 249
Location
LSR Object
Ruch'i
Tsvetnoi Gorod
Rzhevka
XIII.
Location I. Smolny Park, Radischeva 39, Kovensky 5, Russky Dom, Nevsky 1, Fontanki 3, Nevsky 68
Elite residential objects (of
and
+ segments) located in prestigious zones of Central and Admiralteisky
districts were chosen as competing.
Map 6. The map of competition
There are 7 elite residences within the location, 2 of which are of aparthotel format (Gollandiya and Monferran).
Nearly all the rival projects are already completed and buildings commissioned. Gollandiya is at the final stage
of construction, commissioning planned for the 2nd quarter of 2016.
Table 16. Characteristics of the competitive projects
Residence
Address
Developer
Class
Nonresidenti
al status
Commissioni
ng
Sellable
area,
sq m
Unit No.
Hovard Palace
19 Zagorodny Ave
Hovard
elite
+
-
commissioned
16,617
73
Private person
elite
+
-
commissioned
2,413
12
+
Q2 2016
7,376
102
B. Konyushennay
a St., 10
Gollandiya
10
B. Konyushennaya
St.
15 Admiralteisky /
40 Galernaya
RGS
Nedvizhimost’
elite
Page 250
Residence
Address
Developer
Dvortsovaya
Sloboda
15 Stremyannaya
Soyuzgenstroy
Monferran
Smolny Prospekt
Osobnyak
KushelevaBezborodko
5
Konnogvardeisky
Bld.
11-15 Smolny
(historical
buildings)
Inteko
24 Kutuzova
YIT
Dar
Class
Nonresidenti
al status
Commissioni
ng
Sellable
area,
sq m
Unit No.
-
commissioned
3,824
32
+
commissioned
11,806
96
-
commissioned
4,641
33
-
commissioned
6,310
29
Total:
52,987
377
elite
elite
+
elite
elite
+
Hovard Palace at 19 Zagorodny Ave, despite the peculiarities of its location, the lack of view characteristics in
the apartments and common non-homogeneous environment, is a potential competitor, due to a variety of
infrastructure and services for the future tenants. The residence has been commissioned in Q3 2015, but not
yet completely ready. Works on common area finishing are still on in the complex.
Osobnyak Kusheleva-Bezborodko is a club house comprising 29 apartments, among which are several ones in
the historic part of the building (at the façade along Kutuzova Emb.; in these units historical interiors will be
restored). There are loft apartments with private car lifts, rising directly to the apartment, apartments with open
terraces, winter gardens, panoramic windows and an apartment-townhouse with a separate entrance and a
two-tiers-of-windows living room. The infrastructure of the house provides a wellness-center with a swimming
pool, a lounge, a lobby, landscaped internal courtyards with small architectural forms, heated parking. The
house has been commissioned in September 2015.
Monferran and Dvortsovaya Sloboda residential complexes were put into exploitation in 2013, at that ca. 50% of
the units remain unsold at the time being.
Historical houses included in Smolny Prospekt and Gollandiya residential complexes are characterized by mostly
inconvenient layouts due to the need to preserve the historic load-bearing structures of the buildings.
The house at 10 B. Konyushennaya Street is a reconstruction of a residential building and has a limited number
of apartments (last apartments remain on sale). Since this house does not compete seriously with the analyzed
projects, it should be considered optionally.
Table 17. Perspective projects
Project
Address
Developer
Opera Palace
1 Marsovo Pole
Art View House
Chaikovsky
6 Aptekarsky Lane
32 Voskresenskaya Emb.
4 Glinki St.
Marsovo pole
102 Moika river Emb.
1/9 Mokhovaya St.
Intef
BTK Development
Megahaus
Plaza Lotus Group
Okhta Group
Stanley
Non-residential
status
+
+
+
+
Sellable
area, sq m
2,982
10,069
10,000
22,000
3,809
5,100
Page 251
Project
Address
Developer
Novaya
Gollandiya
Grossmeister
-
Novaya Gollandiya Island (103
Moika riverEmb.)
2 Potemkinskaya
Tavrichesky/ Orlovskaya
51 Shpalernaya St.
56 Shpalernaya
Novaya Gollandiya
Development
St. Petersburg Bank
Confidential
Scavery
Vodokanal
Non-residential
status
Sellable
area, sq m
+
9,666
+
+
+/Total:
25,000
7,000
24,632
105,000
222,276
Among the future projects 11 complexes of 222.3 thous. sq m total living area are declared in the competitive
zone; 63% of the projects will be presented in the aparthotel format. Art View House club house at 102 Moika
river Emb. which is to begin sales in February 2016, and Opera Palace, which has begun active construction in
2015.
About half of the projects are at the stage of sale or co-investor search, so the prospect of their realization is
stretched in time.
Table 18. Average prices and rate of sales of the competitive projects
Residence
Hovard Palace
10
B. Konyushennaya
St.
Gollandiya
Dvortsovaya
Sloboda
Monferran
Smolny Prospekt
Osobnyak
KushelevaBezborodko
Address
Finishing
Aver. price,
rub./sq m
Aver. rate of
sales,
pcs/quarter
Aver. price
1 pkg sp.,
mn rub.
Aver. price
of
commerc.,
rub./sq m
full
597,667
3.2
3.12
not on sale
19 Zagorodny
Ave
10
B. Konyushennaya
St.
15 Admiralteisky/
40 Galernaya
none
371,630
0.6
no car park
no
commerc.
areas
halffinished
336,141
4
not on sale
not on sale
Stremyannaya 15
none
270,222
1.3
6
n/a
5
Konnogvardeisky
bld.
11-15 Smolny
(historical bldgs.)
none
403,118
6
3.35
no
commerc.
areas
halffinished
267,108
1.5
2.06
149,265
24 Kutuzova
mixed
477,570
2.0
3.4
190,00015
The average price level in the competitive zone is in the range of 270 – 597 thous. rub./sq m not regarding a
project phase.
15
Data of Q1 2016, the commercial areas in this property have not been on sale at the valuation date.
Page 252
The differentiation of prices in the competitive zone objects is largely due to the pricing policy of each
developer, as well as to a number of each object's specific features. E.g., relatively low price level of the house
at 10 B. Konyushennaya St. is connected with the long period of the project (since 2012)
Hovard Palace residential complex appears to be the most expensive property in the competitive zone, despite
of the lack either of exclusive location or of any view characteristics in apartments. The complex entered the
market in the "closed" format of sales, the price of apartments made public only after checking the potential
buyer. Developer focused on the status of the project as the exclusive, closed club house. Also, the higher price
level is due to apartments fully finished and partially furnished.
The average price of competitive properties in the zone is 389 thous. rub./ sq m.
Terms of realization of elite residential complexes in analyzed locations vary due to a variety of the project's
parameters. Objects having any deficiencies (in layouts, lack of parking et al.), are sold slowly. On average, the
rate of sales of elite objects in the competitive area is 3 apartments quarterly.
Location II. Verona, Dom na Dvoryanskoy, Osobnyak Truvorova
Objects analyzed compete with elite residential complexes of elite A and elite A+ segments located in the same
territory of Petrogradsky district, Petrogradsky, Krestovsky and Kamenny islands included.
Major part of competitors is situated in northern part of Petrogradsky district, along Malaya Nevka river and on
Krestovsky island. Petrogradsky district share is maximal in the total supply and amounting 50%.
Elite residences are not offered for sale in south-eastern part of Petrogradskaya storona, where the analyzed
Dom na Dvoryanskoy is located. All the residential complexes currently under construction belong to B class
and aim majorly at more mass demand.
Page 253
The elite residential complexes on sale in the competitive zone are 10, 4 of them commissioned already, 2
planned to be commissioned in Q1 2016 and 4 to be commissioned during 2017.
Table 19. The competitive projects’ characteristics
elite +
Commissionin
g
commissioned
Sellable
area, sq m
6,402
elite +
commissioned
14,484
73
Q1 2016
5,891
59
Q3 2017
14,746
52
Residence
Address
Developer
Class
Brilliant House
6a Dynamo Ave
23-25
Konstantinovsky
Ave
18 Pesochnaya
Emb.
92 Martynova
Emb.
12 Krestovsky
Ave
FORTGROUP
Kredo
Diadema Club
House
Dom na
Pesochnoy
Imperatorsky
Yacht Club
Krestovsky 12
Krestovsky De
Luxe
Leontyevsky Mys
Privilegiya
Rezidentsia na
Kamennom
York
elite
Morskoy Yacht Club
44 Dynamo Ave
45
Zhdanovskaya
St.
8 Vyazovaya St.
7A the 1st
Berezovaya
Alley
64
Kamennoostrov
sky Ave
elite +
Unit No.
35
Etika Development
elite
commissioned
3,333
25
GPBI Development
Severo-Zapada
elite
Q3 2017
42,756
359
Leontyevsky Mys
elite
Q1 2016
57,226
392
Evrostroy
elite
Q1 2017
49,416
334
Q1 2017
3,437
18
commissioned
9,737
65
Total:
207,428
1,412
Ekoinvest
Stroikomplekt
elite +
elite
The total living area of the properties on sale amounts 207.4 thous. sq m (1.4 thous. units).
The three
competitors, i.e. Leontyevsky Mys, Krestovsky De Luxe and Privilegiya are the block-development projects. 67%
of offers for sale in the competitive location are concentrated within these projects.
Project
Trinity Place
Meltzer Hall
-
Address
Admirala Lazareva Emb. / Malaya
Zelenina St.
Bychy island
27 Karpovki Emb.
Kamenny island
9 Petrovsky Ave
2 Petrovsky Ave
Petrovsky island
8 Esperova St.
16/23 Esperova St.
Developer
Nonresidential
status
Sellable area,
sq m
GHP Group
+
27,000
Yavara-Neva
NCC
Confidential
Leontyevsky Mys
Renova
Confidential
Yard
Confidential
+
+
+
+
+
+
-
7,000
15,813
4,000
10,000
25,592
30,000
5,000
7,000
Page 254
Project
Address
Developer
Nonresidential
status
Total:
Sellable area,
sq m
131,405
9 perspective projects occupying in total 131.4 thous. sq m, 82% of which to be offered in aparthotel format, are
declared in the location. In the near future the sale of the luxury residential complex by Renova company on
Petrovsky Island is expected to start. The project with luxury apartments on Bychy Island was commissioned in
the III quarter of 2015, but is not yet on open sale. So far the developer plans to implement the project in a
"closed sales" format. Yet two other projects of the location are at an active projecting phase. Sales start of the
remaining projects is expected after 2019-2020.
Table 21. Average price and average rate of sales of the competitive projects
Residence
Address
Brilliant House
6a Dynamo Ave
Diadema Club
23-25 Konstantinovsky
House
Ave
Dom na Pesochnoy 18 Pesochnaya Emb.
Imperatorsky Yacht
92 Martynova Emb.
Club
Krestovsky 12
Krestovsky 12
Krestovsky De Luxe
44 Dynamo Ave
Leontyevsky Mys
45 Zhdanovskaya St.
Privilegiya
8 Vyazovaya St.
Rezidentsia na
7A 1st Berezovaya Alley
Kamennom
64 Kamennoostrovsky
Ave
420,333
Aver. rate of
sales, pcs/
quarter
2.5
Aver. price
1 pkg sp., mn
rub.
3
none
451,696
2
not on sale
none
214,530
2.5
not on sale
full
893,038
2.75
8
none
none
none
none
333,780
258,841
400,753
321,548
2
20
15
18.4
not on sale
not on sale
2.53
3.00
mixed
1,254,000
0
not on sale
none
316,561
1
3.5
Finishing
Aver. price,
rub./sq m
none
Average price interval in the competitive location objects varies from 214.5 thous. rub./sq m to 1.25 mn
rub./sq m. The highest prices are recorded in Rezidentsia na Kamennom (few-apartment) club house and in
Imperatorsky Yacht Club elite aparthotel. At that there have been no sales in the first object, and one of the
buildings in the second object was bought by a large company representatives.
The lowest price in the competitive location is recorded in ‘Dom na Pesochnoy’ complex, its 2 nd phase located at
1-3 Grota St. The ratio of unit types and areas in this complex was changed in the sales process, as well as the
commissioning term that has been shifted several times.
The average price in the zone is 486.5 thous. rub./ sq m.
At the same time the indicator for relevant
competitive properties is 30% lower and amounts 339.7 thous. rub./ sq m.
“Krestovsky De Luxe” and “Privilegiya” complexes are the most successful in the location regarding the sales
volume.
The two demonstrate high demand levels in conditions of rational pricing, thoughtful planning
concepts and rapid pace of construction. Average quarterly sales rate for the two complexes is between 18-20
Page 255
units. A bit lower sales rate of 15 units per quarter is recorded in Leontyevsky Mys residential complex. For all
other projects of the competitive zone average sales rate is about 3 apartments per quarter.
Location III. Europa City
The B class residential complexes compete with the property under analysis in Petrogradsky district.
Aparthotels of investment orientation are not considered in the analysis - such objects are rarely able to
compete with new housing projects because of the specific planning solutions, as well as because of other
range of customers.
Skandi Klubb Residence, being erected by NCC, is the closest competitor of the analyzed Project. The first two
phases of the project are currently on sale.
Intense construction goes on in south-eastern part of Petrogradsky island (Posadsky Okrug municipal unit), and
in western part of the island, limited by Bolshaya Zelenina St., Bolshoy Ave of Petrogradskaya Storona and by
Petrovsky island.
Petrogradsky district fraction takes 16% of general B class supply, which is the second after that of Central
district.
Page 256
Residence
Ostrov
Riverside
Riverside
Skandi Klubb
Skandi Klubb
Aristokrat
Atlant
Dom na
Zhdanovke
Mirozdanie
Na Grebetskoy
Ofitsersky
Petrovskaya
Riviera
Petrogradets
Premier Palas
Premier Palas
Sobranie
Spasskaya
Bashnya
Address
2 Remeslennaya
St.
3 Ushakovskaya
Emb.
3 Ushakovskaya
Emb.
16 Aptekarsky
Ave
16 Aptekarsky
Ave
1 Malaya
Zelenina /22
Korpusnaya St.
Phase/
building
no.
Developer
Class
Commissio
ning
Sellable
area,
sq m
Unit No.
Stroitelny Trest
comfort
Q3 2017
36,156
404
k. , ,
Setl City
business
commissio
ned
51,021
572
k. .4, .5
Setl City
business
Q1 2016
23,719
313
k.11-18
NCC
comfort
Q2 2016
21,471
348
k.21-28
NCC
comfort
Q1 2018
19,082
294
Baltiyskaya
Kommertsiya
business
Q1 2016
17,204
208
Konnolakhtinsk
y 55
comfort
Q1 2017
4,075
57
Ekoinvest
comfort
Q1 2016
4,899
74
Setl City
BFADevelopment
business
Q4 2016
commissio
ned
13,769
191
13,534
177
PSK Ofitsersky
comfort
Q2 2016
7,571
89
Severny Gorod
comfort
Q2 2018
15,389
249
Stroyimpul’s
business
Q1 2016
4,232
40
k. 2-2, 3-2
L1
business
Q3 2016
12,078
89
k. 4-2, 4-3
L1
business
Q4 2017
22,391
278
RBI
business
commissio
ned
21,560
264
SPb
Rekonstruktsiya
business
commissio
ned
1,936
18
YIT
comfort
commissio
ned
9,308
130
Total:
299,395
36A Mira St.
10
Zhdanovskaya
St.
37 Mira St.
16A Pionerskaya
St.
8 Ofitsersky
Lane
20 Petrovsky
Ave
8 L.Tolstogo St.
50 Pionerskaya
St.
50 Pionerskaya
St.
12 Bolshaya
Posadskaya St.
Ofitsersky Lane /
Krasnogo
Kursanta St.
16 Chapayeva
St.
business
3,795
15 residential objects of B class currently under construction, totaling 299.4 sq m of living area(3.8 thous. units),
are located in the competitive zone.
The major part of competitive objects in the location (57%) is commissioned or declared to be commissioned
by the end of 2016, 28% will be put in exploitation in 2017.
Page 257
Project
Address
Developer
Nonresidential
status
Sellable area,
sq m
Skandi Klubb, 3 phase
16 Aptekarsky Ave
NCC
-
19,299
Marco Polo
34 Bolshaya Zelenina St.
Petropol’
-
7,360
-
24 Bolshaya Zelenina St.
Stroitelny Trest
+
5,000
-
Bolshaya Raznochinnaya
St.
Confidential
9 Ofitsersky Lane
SPb Rekonstruktsiya
Petrovsky
Setl City
-
54,042
Bazis
-
22,706
nd
Spasskaya Bashnya, 2
phase
-
-
3,423
-
1,400
-
Barochnaya St.
-
53 Pionerskaya St.
Baltiyskaya Kommertsiya
-
11,380
-
3 Petrovskaya Kosa
Lenstroimaterialy
-
21,210
-
Petrovskaya Kosa
Nevsky Capital Partners
-
300,000
-
Petrovsky island
Confidential
-
30,216
-
9-11 Petrovsky Ave
Hovard SPb
-
145,530
-
17 Remeslennaya St.
Hovard SPb
+/-
136,600
-
28 Chapayeva St.
Elite Tower
-
4,196
Total:
762,362
14 perspective projects occupying in total 762.4 thous. sq mare declared in the location. Over 90% of the
declared area belongs to Petrovsky island newly formed location. Part of the projects’ units is on sale, active
projecting is on for the other part.
One can expect a start of sale in 24 and 34 B. Zelenina St. and in 28 Chapayeva St. in the nearest future.
Table 24. Average price, average rate of sales of the competitive projects
Residence
Ostrov
Skandi Klubb
Skandi Klubb
Aristokrat
Atlant
Dom na
Zhdanovke
Mirozdanie
Na Grebetskoy
Ofitsersky
Address
2 Remeslennaya
St.
16 Aptekarsky Ave
16 Aptekarsky Ave
1
M. Zelenina /22
Korpusnaya St.
36A Mira St.
10 Zhdanovskaya
St.
37 Mira St.
16A Pionerskaya
St.
8 Ofitsersky Lane
Phase /
buildin
g no.
k.11-18
k.21-28
Finishing
Aver.
price,
rub./sq m
Aver. rate
of sales,
pcs/
quarter
Aver. price
1 pkg sp.,
mn rub.
Aver. price
of commerc.,
rub./sq m
none
159,000
24.5
n/a
n/a
half-finished
half-finished
149,346
159,250
38.0
sales start
1.61
not on sale
n/a
not on sale
half-finished
164,763
34
not on sale
150,000
none
152,853
n/a
not on sale
not on sale
none
134,793
5
n/a
n/a
half-finished
177,642
28.2
2.50
228 000
half-finished
140,668
17.0
1.90
not on sale
none
139,664
6.0
1.76
not on sale
Page 258
Residence
Petrovskaya
Riviera
Petrogradets
Address
20 Petrovsky Ave
8 L.Tolstogo St.
Premier Palas
50 Pionerskaya St.
Premier Palas
50 Pionerskaya St.
Sobranie
Spasskaya
Bashnya
Phase /
buildin
g no.
12 Bolshaya
Posadskaya St.
Ofitsersky/
16 Chapayeva St.
k. 2-2,
3-2
k. 4-2,
4-3
Finishing
Aver.
price,
rub./sq m
Aver. rate
of sales,
pcs/
quarter
Aver. price
1 pkg sp.,
mn rub.
Aver. price
of commerc.,
rub./sq m
none
160,050
59.0
not on sale
not on sale
half-finished
177,282
5.5
not on sale
154,996
none
237,943
2.0
1.23
137,650
none
138,286
6.0
not on sale
129,400
none
232,549
15.5
3.10
237,328
none
149,551
0.5
not on sale
not on sale
half-finished
197,901
9.5
2.09
135,000
Average price interval within the competitive zone varies from 134.7 to 238 thous. rub./sq m. The highest prices
are recorded in “Premier Palas” residential complex, in the buildings facing Malaya Nevka river. The lowest
prices in the location can be found in “ Dom na Zhdanovke”, due to disadvantages of the object (the developer
not known in the market, a noisy thoroughfare under windows, a housing neighborhood not popular in the
location).
The average price in the zone is 167 thous. rub./ sq m.
The highest sales rate is recorded in Petrovskaya Riviera residential complex, due to the period of waiting for
the sales start in the object, the low prices at the start of sales, as well as to the specific ratio of unit types and
areas (there is a considerable number of small 1-room and 2-room units in the complex).
Overall, the project's implementation pace depends on the developer's reputation. Projects from reliable
known developers are implemented faster than projects from lesser-known companies or developers who have
a negative reputation.
The average quarterly sales rate within the competitive location accounts 18 units, while the rate for the most
successful projects in the market is much higher, at around 30 apartments in the quarter.
Location IV. Tri Vetra
Southern part of Primorsky district alongside Bolshaya Nevka river and the new blocks of the so-called ‘north
Primorsky part’ (NPP), limited by Kamyshovaya, Mebel’naya, Planernaya streets and by Shuvalovsky Ave are
forming the competitive zone for the analyzed project.
Objects with sales close to termination (remaining units either less than 10, or under 5% of a large-scale
complex) are excluded.
Typically, at this stage the remaining variants are illiquid premises with any
disadvantages or their value is inadequate to the market situation.
Several residential complexes of C class, formally disparate with the Property, are nevertheless included in the
competitive zone. That comes from a potential buyer’s standpoint – he or she might consider complexes
already commissioned first, if there are available units in them. The competitive advantages, due to which a
buyer might take the specified C class complexes into consideration, are as follows: full readiness (already put
Page 259
into exploitation, one needs not to wait), social infrastructure ready in the micro-location north of the railroad
(kindergartens, schools, clinics), beautiful views to Lakhtinsky Gulf / Gulf of Finland from upper floors of
SenSpetsStroy objects and from LIFE-Primorsky residences, lack of WSD and huge road interchanges making
noise in close vicinity to the residences. So, in our opinion, a buyer might take these projects for alternatives
despite of their lower class and quality.
10 housing complexes of
and
class and an aparthotel (Lotos Tower) are put on sale in the competitive
location. 4 complexes have view characteristics similar to the analyzed project (Lotos Tower, LIFE-Primorsky,
Stockholm and Riverside).
LIFE-Primorsky Residence, the 2
nd
phase units of which were put on sale in Q4 2015 is a closest competitor of
the analyzed project.
Residence
Address
LIFE-Primorsky
LIFE-Primorsky
Stockholm
Lotos Tower
aparthotel
52 Primorsky Ave
52 Primorsky Ave
46 Primorsky Ave
72 Primorsky Ave
bldgs 1, 2
30 Dibunovskaya
St.
3 Ushakovskaya
Emb.
Rich'art Club 2
Riverside
Phase /building
Developer
no.
1
2
k.1, 2
k.1, 2
k. , ,
Sellable
area, Units no.
sq m
48,990
847
18,195
280
34,309
272
Class
Commissioning
Pioner
Pioner
Setl City
Moskovsky
Dvor
medium
medium
business
commissioned
Q2 2017
Q3 2017
business
Q1 2016
10,390
70
Novy Gorod
business
Q1 2016
1,932
16
Setl City
business
commissioned
51,021
572
Page 260
Phase /building
Developer
no.
Residence
Address
Riverside
3 Ushakovskaya
Emb.
.4, .5
Dom u Elagina
15 Lipovaya Alley
Ostrova
Elagin Apart 104 Savushkina St.
43 Primorsky Ave
Sellable
area, Units no.
sq m
Class
Commissioning
Setl City
comfort
Q1 2016
23,719
313
RBI
comfort
Q4 2016
11,000
128
Atlantic
SU-155
economy
Q3 2017
12,926
comfort commissioned
5,313
Total:
217,795
377
60
2,935
The total living area on sale amounts 217.8 thous. sq m (2.9 thous. units) in the location. 48% of that area is in
the commissioned complexes, 22% in objects to be put into operation within 2016, and 30% in objects to be
commissioned by the end of 2017.
Project
Address
Developer
Lakhtinsky Plaza
Lotos Tower
-
114 Savushkina St.
169 Primorsky Ave
72 Primorsky Ave
34 Dibunovskaya St.
Torgovy Dom Astana
Concord
Moskovsky Dvor
Dibunovskaya St.
Nonresidential
status
+
+
+
Total:
Sellable area,
sq m
53,000
21,840
131,172
3,000
209,012
4 new projects can emerge in the location in the near future, 3 of them in aparthotel format. A considerable
part of the future projects is declared out of the analyzed location, primarily in the north of Primorsky district.
The total sellable area of the future projects in Primorsky district accounts ca. 7 mn sq m.
Residence
Address
LIFE-Primorsky
LIFE-Primorsky
Stockholm
Lotos Tower
apartments
52 Primorsky Ave
52 Primorsky Ave
46 Primorsky Ave
72 Primorsky Ave
bldgs 1, 2
30 Dibunovskaya
St.
3 Ushakovskaya
Emb.
3 Ushakovskaya
Emb.
Rich'art Club 2
Riverside
Riverside
Dom u Elagina
Ostrova
15 Lipovaya Alley
Phase
/building
no.
Finishing
Aver.
price,
rub./sq
m
1
2
k.1,2
mixed
none
none
178,070
111,805
209,660
Aver.
rate of
sales,
pcs/
quarter
119
17
20.6
k.1, 2
none
151,516
k. , ,
.4, .5
halffinished
halffinished
halffinished
none
Aver. price
1 pkg sp.,
mn rub.
Aver. price
of commerc.,
rub./sq m
0.98
not on sale
2
174,333
not on sale
120,000
10.0
not on sale
not on sale
203,600
0
not on sale
not on sale
173,105
21.6
2.3
-
162,473
13.7
2.3
-
146,506
9.8
not on sale
not on sale
Page 261
Residence
Elagin Apart
-
Address
104 Savushkina
St.
43 Primorsky Ave
Phase
/building
no.
Finishing
Aver.
price,
rub./sq
m
Aver.
rate of
sales,
pcs/
quarter
Aver. price
1 pkg sp.,
mn rub.
Aver. price
of commerc.,
rub./sq m
none
95,540
116
n/a
n/a
none
160,833
3.8
not on sale
not on sale
The average price within the competitive zone varies from 95.5 to 209.6 thous. rub./sq m.
The lowest price is recorded in Elagin Apart, which is currently on the initial stage of construction and offering
aparthotel units.
The highest price was observed in Stockholm residential complex, in which a considerable number of units with
good views is on sale.
Prices do not directly depend form a type of finishing. Units with no finishing, as in Stockholm housing
complex, can be offered at higher prices than units with half-finishing. In the 1st phase of LIFE-Primorsky
complex both the units without any finishing and with half-finishing are on sale.
The average price in the competitive zone is 159.3 thous. rub./ sq m.
The average quarterly sales rate within the location accounts 33 units. However, there are objects where this
figure is much higher, due to a lower price relative to other objects in the competitive zone (Elagin Apart), or
due to a comfortable “price-quality” ratio in terms of the potential buyer (LIFE-Primorsky). Objects of low
liquidity, having any disadvantages show sales rate below the average for the competitive zone.
Location V. Bogemiya
B class residential complexes located in neighborhoods along Moskovsky Prospect, north of Frunzenskaya
subway station have been considered as comparable competitors to the analyzed project.
Page 262
Units of the 6 housing complexes are on sale in the competitive zone. “Time. Dom u Moskovskogo” residential
complex of Severny Gorod Co. is the closest rival. “Imperial” housing complex located close to the Project is not
a serious competitor, since the remaining apartments on sale are mainly of great footage.
Tapiola and Dom na Frunzenskoy residential complexes possess both advantages and shortcomings regarding
the location. Proximity to the metro station from one side, and position within a newly formed housing block
from the other side (construction of "Vremena Goda" large housing complex of C class is being completed next
door). In general, these complexes are currently at terminal phases of sales, that’s why they are not the
Project’s serious rivals.
The two other objects within the competitive zone (“Moskovskie Vorota” of LenSpetsSMU and “Moskovsky
Kvartal” of SM-Development) are situated at considerable distances from the analyzed project.
These
complexes should be considered as potential competitors, because they have a wide assortment of units for
sale and are built in several phases.
Page 263
Residence
Address
Time. Dom u
Moskovskogo
3 Zaozernaya St.
Dom na
Frunzenskoy
Imperial
Moskovskie
Vorota
Moskovskie
Vorota
Moskovskie
Vorota
Moskovskie
Vorota
Moskovsky
Kvartal
Moskovsky
Kvartal
Tapiola
Phase
/buildi
ng no.
108
Obvodnogo kan.
Emb.
Moskovsky Ave
/Kievskaya St.
115 Moskovsky
Ave
115 Moskovsky
Ave
115 Moskovsky
Ave
115 Moskovsky
Ave
Moskovsky Ave /
Varshavskaya St.
Moskovsky Ave /
Varshavskaya St.
108A
Obvodnogo kan.
Emb.
Developer
Class
Commissi
oning
Sellable
area,
sq m
Units no.
Severny Gorod
comfort
Q4 2016
23,235
400
AAG
comfort
Q1 2016
6,658
107
k. 1-6
L1
comfort
63,504
866
k.2, 3
LenSpetsSMU
comfort
85,780
917
k.1
LenSpetsSMU
comfort
Q2 2016
14,987
240
k.4
LenSpetsSMU
comfort
Q4 2016
30,233
489
k.5,6
LenSpetsSMU
comfort
Q2 2018
54,939
867
comfort
Q2 2016
49,108
658
business
commissio
ned
10,738
113
comfort
commissio
ned
26,097
431
Total:
365,279
5,088
2
3
7-12
Siloviye Mashiny
Development
Siloviye Mashiny
Development
Lemminkainen
commissio
ned
commissio
ned
The total sellable area amounts 365.3 thous. sq m (5.1 thous. units) in the zone. Nearly a half of this volume
refers to a single “Moskovskie Vorota” housing complex. The residential area on sale accounts 119.4 thous.
sq m in the immediate surroundings of the Project
Project
Galaktika
Address
5 Detsky Lane
Izmailovskaya perspective
5 Kievskaya St.
83 Moskovsky Ave
Obvodny Channel Blagodatnaya St.
Developer
RBI
PIK
Elba
Yunit
Sellable area, sq m
11,106
60,000
11,400
44,000
LenSpetsSMU
250,000
Total:
376,506
5 perspective projects totaling 376.5 thous. sq m sellable area are declared in the competitive zone. 66% of that
area is linked to “Galaktika” complex by LenSpetsSMU, scheduled to launch in 2017.
In the short term, a small house at 5 Kievskaya St. is expected to appear, as well as an adjacent project of Dom
na Frunzenskoy, to be built by Yunit (the developer of Vremena Goda residential complex).
Page 264
Residence
Address
Time. Dom u
Moskovskogo
3 Zaozernaya
St.
108
Obvodnogo
kan. Emb.
Moskovsky/
Kievskaya St.
115 Moskovsky
Ave
115 Moskovsky
Ave
115 Moskovsky
Ave
115 Moskovsky
Ave
Moskovsky Ave
/ Varshavskaya
St.
Moskovsky Ave
/ Varshavskaya
St.
108A
Obvodnogo
kan. Emb.
Dom na
Frunzenskoy
Imperial
Moskovskie
Vorota
Moskovskie
Vorota
Moskovskie
Vorota
Moskovskie
Vorota
Moskovsky Kvartal
Moskovsky Kvartal
Tapiola
Aver.
rate of
sales,
pcs/
Aver.
price
1 pkg
sp., mn
rub.
Aver. price
of
commerc.,
rub./sq m
Finishing
Aver.
price,
rub./sq
m
none
138,284
29
1.72
161,491
half-finished
142,667
13
not on
sale
137,000
k. 1-6
none
134,329
9
1.62
133,550
k.2, 3
full
114,244
sales
start
k.1
none
116,387
36
k.4
none
116,387
k.5,6
none
116,387
sales
start
sales
start
not on
sale
not on
sale
not on
sale
not on
sale
2
none
134,157
50
1.90
n/a
3
none
133,554
8
1.90
n/a
7-12
half-finished
158,955
53
1.74
not on sale
Phase
/buildi
ng no.
not on sale
190,000
not on sale
not on sale
The average price within the competitive zone varies from 114.2 thous. rub./sq m in building 1 of “Moskovskie
Vorota” to 159 thous. rub./sq m in the 2nd phase of “Tapiola”. Major part of units is offered with no finishing.
“Tapiola” and “Dom na Frunzenskoy” are sold prepared for full finishing (half-finished).
The lowest sales speed is observed in Imperial complex, because it was being built and realized for some 10
years; and in the 3d phase of “Moskovsky Kvartal”, which exceeds apartments in other phases of this complex in
absolute value.
The average quarterly sales rate within the location accounts 28 units.
Location VI. Moskovskoe Shosse 3
The analyzed project is rivaled by B class housing complexes located in Moskovsky district south to railroad
ROW (right-of-way).
Page 265
5 residential complexes of B class are present in the zone under consideration. “Moskva” housing complex
offers aparthotel units located in several sections of the house, apart from common residential premises (flats).
The residence at 5 Pobedy St. could be compared to elite objects by its technical characteristics, quality of
construction, as well as by ratio of unit types and areas. However, according to the classification of housing,
applied by Knight Frank, an object located only in the central city districts, in prestigious locations, can be elite.
Therefore the house at 5 Pobedy St. cannot be classified in the premium segment.
“Graf Orlov” residential complex, despite of its broad variety of apartments at relatively low prices, has a
reputation for "protracted", thus only the buildings already commissioned could rival the analyzed project.
Residence
Address
Grand
Familiya
63 Kosmonavtov
Ave
Phase
/buildin
g no.
Developer
Class
Commissioning
Sellable
area, sq m
Units
no.
PPK
comfort
commissioned
32,749
474
Page 266
Residence
Address
Phase
/buildin
g no.
Developer
Class
Commissioning
Sellable
area, sq m
Units
no.
Graf Orlov
185 Moskovsky
Ave
k. 2, 9
L1
comfort
commissioned
33,718
493
Graf Orlov
185 Moskovsky
Ave
k. 3, 4,
,4 ,
,4
L1
comfort
Q4 2016
53,877
810
Moskva
19 Kostyushko
St.
Setl City
comfort
Q3 2018
31,004
473
Moskovsk
y Kvartal
Moskovsky Ave /
Varshavskaya St.
2
comfort
Q2 2016
49,108
658
Moskovsk
y Kvartal
Moskovsky Ave /
Varshavskaya St.
3
business
commissioned
10,738
113
Pobedy 5
181 Moskovsky
Ave (5 Pobedy
St.)
business
commissioned
7,005
51
Total:
218,199
3,072
Siloviye
Mashiny
Developmen
t
Siloviye
Mashiny
Developmen
t
Legenda
The total sellable area amounts 218.2 thous. sq m or 3.1 thous. units. Graf Orlov residential complex is the
largest project in the competitive zone, its 8 buildings remaining on sale. In “Grand Familiya” and “Pobedy 5”
few last units stay on sale, so one should consider these complexes optionally.
Project
Address
Developer
KosmoStar
Chetyre Sezona
57 Blagodatnaya St.
102 Kosmonavtov Ave
102 Kosmonavtov Ave
61/2 Kosmonavtov Ave
Moskovsky Ave
13 Moskovskoye Hwy
Interkontrakt
Akvilon-Invest
Bau City
project on sale
Confidential
Akvilon-Invest
Sellable area,
sq m
3,588
11,150
17,684
18,432
104,000
56,532
-
13 Moskovskoye Hwy
projects on sale
1,077,205
-
16 Moskovskoye Hwy
Dom na Lensoveta
7,029
Bolshoy Moskovsky
-
Novoizmailovsky Ave/Blagodatnaya St.
30 Pulkovskoye Hwy
Pulkovskoye Hwy/ Ring Road
21 Tipanova St.
Renovatsia SPb
CTM-62
CDS
Kontsern Piter
Total:
1,159,500
23,468
150,000
108,500
2,737,088
12 perspective projects totaling 2.7 mn sq m of living area are declared in the competitive location. 81% of the
areas concentrate in the two complexes (at 13 Moskovskoye Hwy and in “Bolshoy Moskovsky” by ‘Renovatsia
Page 267
SPb”). The first project currently involves the sale of land for housing construction; the second project has been
suspended after the start of sales in 2015. Thus the implementation of both projects is stretched over time.
In the near future it is expected to start selling the two projects of «Akvilon-Invest», a development company
from Arkhangelsk – “KosmoStar” at 102 Kosmonavtov Ave, and “Chetyre Sezona” at 13 Moskovskoye Hwy
Residence
Address
Grand
Familiya
63 Kosmonavtov
Ave
185 Moskovsky
Ave
185 Moskovsky
Ave
19 Kostyushko St.
Moskovsky Ave /
Varshavskaya St.
Moskovsky Ave /
Varshavskaya St.
181 Moskovsky
Ave
Graf Orlov
Graf Orlov
Moskva
Moskovsky
Kvartal
Moskovsky
Kvartal
Pobedy 5
Aver.
price of
commerc
.,
rub./sq m
not on
sale
Finishing
Aver.
price,
rub./sq m
Aver. rate
of sales,
pcs/
quarter
Aver. price
1 pkg sp.,
mn rub.
halffinished
143,646
20
not on sale
k. 2, 9
none
131,021
5
2.02
k. 3, 4, 3 ,
,3 ,4
none
127,868
1
1.92
none
128,583
107
not on sale
not on
sale
165,000
2
none
134,157
50
1.90
n/a
3
none
133,554
8
1.90
n/a
halffinished
423,298
4
2.20
not on
sale
Phase /
building
no.
110,304
The average price within the competitive zone varies from 127.8 to 423.3 thous. rub./sq m.
Maximal prices are recorded at 5 Pobedy St., in which large apartments with good views remain on sale. In
addition, the object pricing was initially close to elite housing.
Minimal prices are found in” Graf Orlov” residential complex. Pricing policy of the object’s developer is focused
on minimum prices by delaying the timing of construction.
The average price in the competitive zone is 174.6 thous. rub./ sq m. At the same time the indicator for
relevant competitive properties is 34% lower and accounts 133.1 thous. rub./ sq m.
The average quarterly sales rate within the location is at the level of 28 units. The highest sales speed was
registered “Moskva” residential complex, i.e. 107 apartments sold in the 1st quarter after the sales start, due to
low absolute value of a unit and to a significant number of small footage apartments.
Location VII. Shuvalovsky, Zapovednaya 51
Northern part of Primorsky district, limited by Planernaya, Ilyushina streets and by railroad ROW forms the
competitive zone for the objects under analysis. The opening of through traffic along Suzdal’skoye Hwy across
Vyborgskoye Hwy taken into account, it is appropriate to consider the objects located in Vyborgsky district
territory limited by Suzdal’sky, Engelsa and Lunacharskogo prospects. All complexes with units available for sale
are taken into consideration, PRAGMA-HOUSE included.
Page 268
10 housing complex totaling 544.2 thous. sq m of sellable area are found in the competititve zone. The largescale residential construction is carried out on the outskirts of the Primorsky district in the newly formed
territories, which occupy 66% of the total supply in the considered location.
41% of rival objects are at are in advanced stage of readiness, either already put into operation, 24% declared
to be commissioned in 2017, yet another 35% - to be commissioned up to the end of 2018.
Residence
PRAGMAHOUSE
Ultra City
Graffiti
Graffiti
Address
Prosvescheniya
Ave/
Kompozitorov St.
4 Prigorodny
Shuvalovsky
Ave/
Parashutnaya St.
Shuvalovsky/
Parashutnaya St.
Developer
Class
Commissio
ning
Sellable
area,
sq m
Units
no.
Pragma
economy
commission
ed
45,289
687
k.1,4
Setl City
economy
Q2 2018
33,191
663
k.1.2, 1.3, 1.5, 1.6
Oikumena
economy
Q4 2016
54,699
528
k. 2.1, 2.2
Oikumena
economy
Q4 2017
29,916
624
Phase /building
no.
Page 269
Residence
Do Re Mi, Repka
Legenda na
Komendantsko
m
Novaya
Skandinavia
Novoorlovsky
Novoorlovsky
Chistoe Nebo
Chistoe Nebo
Chistoe Nebo
Shuvalovsky
Park
-
Developer
Class
Commissio
ning
Sellable
area,
sq m
Units
no.
Pragma
medium
Q3 2016
44,800
798
k.1-5
Legenda
medium
Q1 2018
50,643
1,008
lot 5-2, 8-3, 16
Prime
Group
comfort
Q2 2016
27,127
240
k.1.1.1, 1.1.2
YIT
medium
Q4 2016
25,547
444
k.1.5.1, 1.5.2
YIT
medium
Q2 2017
31,068
620
k.2.2
Setl City
economy
Q2 2017
28,903
924
k.2.1
Setl City
economy
Q3 2017
43,402
1,278
Setl City
economy
Q1 2018
106,573
3,063
UK Finans
economy
Q3 2016
9,960
249
Temp
comfort
13,111
142
544,229
11,268
Phase /building
no.
Address
Repischeva St./
Verbnaya St.
54-58
Komendantsky
Ave
Beregovaya St.
Suzdal’skoye
Hwy
/Novoorlovskaya
St.
Suzdal’skoye
Hwy
/Novoorlovskaya
St.
Komendantsky
Ave lot 2
Komendantsky
Ave lot 2
Komendantsky
Ave lot 2
7/2 Prokofieva
St.
7 NizhneKamenskaya St.
k.3.1
3.2
commission
ed
Total:
Sellable area of future projects in the location totals over 3.6 mn sq m. The project of Gorod Group, in which
ca.1,5 mn sq m of housing was planned to build, was the biggest of all. However, the project is currently on
sale due to the bankruptcy of the developer. “Chistoe Nebo” by Setl City, where in addition to the already
realized buildings it is planned to build nearly 800 thous. sq m of housing is the other large-scale project in the
location.
Project
Address
Developer
District
Novaya Skandinavia
Legenda na
Komendantskom 2nd
and 3d phases
Chistoe Nebo
-
Beregovaya St.
13 Kolomyazhsky Ave
Prime Group
Megalit
Vyborgsky
Primorsky
Sellable area,
sq m
25,489
450,000
Komendantsky Ave 54-58
Legenda
Primorsky
58,194
Komendantsky Ave lot 2
46/4 Koroleva Ave
17 Novokolomyazhsky Ave
Planernaya St. /Glukharskaya
St./ Aviakonstruktorov Ave
Prigorodny
Prigorodny (Kamenka)
Setl City
LenSpetsSMU
Novokolomyazhsky 17
Primorsky
Primorsky
Primorsky
795,164
11,500
4,495
Gorod Group
Primorsky
1,500,000
SU-155
Lider Group
Primorsky
Primorsky
85,486
100,000
project on sale
Novaya Kamenka
-
Page 270
Project
Address
Developer
District
Ultra City
-
4 Prigorodny
19 Serebristy Blvd.
Suzdal’skoye Hwy
/Novoorlovskaya St.
Shuvalovsky Ave
/Parashutnaya St.
Severny Gorod
Setl City
Primorsky
Primorsky
Sellable area,
sq m
182,765
5,164
YIT
Primorsky
303,819
Oikumena
Primorsky
92,838
Total:
3,614,914
Novoorlovsky
Graffiti
The average price within the competitive zone varies from 78.9 thous. rub./sq m in the 3d phase of “Chistoe
Nebo” residential complex, which is at the initial stage of construction, up to 165.3 thous. rub./sq m in the
house at 7 Nizhne-Kamenskaya St., a representative of B class housing.
The average price in the competitive zone regarding comparable projects is 92.8 thous. rub./ sq m.
Residence
PRAGMAHOUSE
Ultra City
Graffiti
Graffiti
Do Re Mi
(+Repka)
Legenda na
Komendantsko
m
Novaya
Skandinavia
Novoorlovsky
Novoorlovsky
Chistoe Nebo
Chistoe Nebo
Chistoe Nebo
Shuvalovsky
Park
Address
Prosvescheniya
Ave/
Kompozitorov St.
4 Prigorodny
Shuvalovsky/
Parashutnaya St.
Shuvalovsky/
Parashutnaya St.
Repischeva St./
Verbnaya St.
Finishing
Aver.
price,
rub./sq m
Aver. rate
of sales,
pcs/
quarter
Aver. price
1 pkg sp.,
mn rub.
Aver. price
of
commerc.,
rub./sq m
none
117,746
15
not on sale
142,813
k.1,4
k.1.2, 1.3,
1.5, 1.6
none
94,706
63.0
not on sale
not on sale
full
91,806
52.0
not on sale
not on sale
k. 2.1, 2.2
full
79,991
sales start
not on sale
not on sale
none
101,066
28.5
not on sale
129,207
Phase
/buildin
g no.
Komendantsky
Ave 54-58
k.1-5
mixed
95,513
48
0.6
155,327
Beregovaya St.
lot 5-2,
8-3, 16
mixed
83,211
12
not on sale
85,086
k.1.1.1,
1.1.2
halffinished
89,652
39
516,025
not on sale
k.1.5.1,
1.5.2
halffinished
95,200
42
527,296
not on sale
k.2.2
full
96,593
179
0.40
137,000
k.2.1
full
89,562
290
0.40
not on sale
full
78,990
318
0.40
not on sale
halffinished
92,569
33
not on sale
not on sale
Suzdal’skoye Hwy
/Novoorlovskaya
St.
Suzdal’skoye Hwy
/Novoorlovskaya
St.
Komendantsky
Ave lot 2
Komendantsky
Ave lot 2
Komendantsky
Ave lot 2
7/2 Prokofieva
St.
k.3.1
3.2
Page 271
Residence
Address
-
7 NizhneKamenskaya St.
Phase
/buildin
g no.
Finishing
Aver.
price,
rub./sq m
Aver. rate
of sales,
pcs/
quarter
Aver. price
1 pkg sp.,
mn rub.
Aver. price
of
commerc.,
rub./sq m
full
165,284
5
not on sale
not on sale
The highest sales speed is recorded in Chistoe Nebo residential complex, up to 318 units in a quarter for the
one of phases. High demand levels in this complex are due to absolute apartment values, minimal for the
competitive zone. The average quarterly sales rate regarding all other projects within the location accounts
34 units.
Location VIII. Sofiya, VIVA, Kvartet
Southern parts of Moskovsky and Frunzensky districts bordered by Blagodatnaya, Sofiyskaya streets, by the
Ring Road and Western Speed Diameter (WSD) form the competitive zone for the analyzed projects.
Residences of C class were considered as rivaling.
The main part of objects belongs to Moskovsky district territory.
The only complex offered for sale in
Frunzensky district is “Balkany” residential complex by Lider Group.
Page 272
About 60% of the objects are commissioned or are to be commissioned in 2016. In Zvezda residential complex
few last units are offered for sale at the valuation date.
Residence
Phase /
building
no.
Address
16 Moskovskoye
Hwy
Kosmonavtov Ave/
Ordzhonikidze St.
Kosmonavtov Ave/
Ordzhonikidze St.
Zvezda
Zvezdny
Zvezdny
Kremlevskie
Zvezdy
Pulkovsky 3
Developer
Class
Commissi
oning
Sellable
area,
sq m
Units no.
Elis
medium
Q1 2016
18,112
315
k. 3-1, 3-2
L1
medium
commissio
ned
31,596
672
k. 1-1- 2-2
L1
medium
Q1 2016
46,755
537
25 Tipanova St.
38 Pulkovskoye Hwy
13 Moskovskoye
Hwy
Sirius
RosStroyInve
st
CDS
medium
Q4 2018
21,256
403
economy
Q1 2016
17,605
395
Lider Group
economy
Q3 2016
25,238
576
medium
Q2 2016
19,390
1,350
medium
Q3 2017
63,918
1,244
economy
Q3 2019
33,143
723
Total:
277,013
6,215
k. , k.
Triumf Park
30 Pulkovskoye Hwy
3
Triumf Park
30 Pulkovskoye Hwy
4
Balkany
102 Budapeshtskaya
St.
Mirland
Development
Mirland
Development
Lider Group
The sellable area of the projects on sale totals 277 thous. sq m or 6.2 thous. units. The two complexes, "Zvezda"
and "Zvezdny", have earned the reputation of "protracted" among the competing objects. Three more
complexes: “Sirius”, “Balkany” and “Pulkovsky 3" - are being built by developers, who often postpone their
objects' commissioning.
Address
-
Blagodatnaya St. 57
Moskovsky
Dom na Budapeshtskoy
6 Budapeshtskaya St.
Frunzensky
KosmoStar
102 Kosmonavtov Ave
102 Kosmonavtov
Ave
61/2 Kosmonavtov
Ave
Moskovsky Ave
13 Moskovskoye Hwy
13 Moskovskoye Hwy
16 Moskovskoye Hwy
Novoizmailovsky
Ave/Blagodatnaya St.
Prazhskaya St.
/B.Kuna St.
Moskovsky
Interkontrakt
Glorax
Development
Akvilon-Invest
Moskovsky
Bau City
17,684
Moskovsky
project on sale
18,432
Moskovsky
Moskovsky
Moskovsky
Moskovsky
Confidential
Akvilon-Invest
project on sale
Dom na Lensoveta
104,000
56,532
1,077,205
7,029
Moskovsky
Renovatsia SPb
1,159,500
Frunzensky
Renovatsia SPb
433,350
Chetyre Sezona
Bolshoy Moskovsky
-
Developer
Sellable area,
sq m
3,588
Project
10,235
11,150
Page 273
Project
Address
-
30 Pulkovskoye Hwy
Pulkovskoye Hwy
/Ring Road
21 Tipanova St.
8 Fuchika St.
-
Moskovsky
CTM-62
Sellable area,
sq m
23,468
Moskovsky
CDS
150,000
Moskovsky
Frunzensky
Kontsern Piter
Baltiysky Bereg
Total:
108,500
180,000
3,360,673
Developer
The sellable area of the projects declared in the competitive zone accounts 3.3 mn sq m. The long-term projects
of Renovatsia SPb and also of the projects located in the former Samson Meat Processing plant territory take a
considerable share in the total area.
During 2016 one can expect the start of sales in the two projects of Akvilon-Invest Co. coming from
Arkhangelsk: “KosmoStar” at 102 Kosmonavtov Ave, and “Chetyre Sezona” at 13 Moskovskoye Hwy, and also in
“Dom na Budapeshtskoy”, a project by Moscow developer Glorax Development.
Residence
Zvezda
Zvezdny
Zvezdny
Kremlevskie
Zvezdy
Pulkovsky 3
Sirius
Triumf Park
Triumf Park
Balkany
Address
16 Moskovskoye
Hwy
Kosmonavtov Ave/
Ordzhonikidze St.
Kosmonavtov Ave/
Ordzhonikidze St.
Phase /
building
no.
k. 3-1, 32
k. 1-1- 22
Aver. rate
of sales,
pcs/
quarter
Aver.
price
1 pkg sp.,
mn rub.
Aver. price
of
commerc.,
rub./sq m
halffinished
95,277
25.4
not on sale
not on sale
none
112,777
28.7
1.18
132,600
none
105,743
28.7
1.19
135,200
116,315
45.7
not on sale
not on sale
92,185
54.4
0.68
n/a
halffinished
none
25 Tipanova St.
38 Pulkovskoye Hwy
13 Moskovskoye
Hwy
30 Pulkovskoye Hwy
30 Pulkovskoye Hwy
102 Budapeshtskaya
St.
Finishing
Aver.
price,
rub./sq m
k. , k.
none
105,033
95.0
n/a
127,800
3
4
mixed
mixed
121,105
101,594
56.6
82.4
not on sale
not on sale
not on sale
not on sale
none
78,301
sales start
not on sale
not on sale
The average price within the competitive zone
is in the interval from 78.3 thous. rub./sq m in Balkany
residential complex, , which is at the initial stage of construction, up to 121.1 thous. rub./sq m in the 3d phase
of Triumf Park, scheduled to be put into exploitation in Q2 of 2016, apartments are being sold half-finished
(prepared for full finishing).
The minimal sales rate in the competitive zone is observed in ‘protracted’ projects, 27 units in a quarter.
Quarterly sales volumes in all the rest complexes vary from 45 to 95 units.
The average quarterly sales rate in the location amounts 52 apartments.
Page 274
Location IX. Yuzhnaya Aquatoriya
The competititve zone is presented majorily by a single large neighborhood in the south-west of St. Petersburg,
plus the newly formed block adjacent to Budennogo Ave. We have also considered the residential complexes
being constructed around “Prospekt Veteranov” metro station.
9 residential complexes meet the requirements. The sellable area currently on sale in the zone totals 572.2
mn sq m or 12.7 thous. units.
Residence
Address
Phase /
building
no.
Developer
Class
Commissi
oning
Sellable
area, sq m
Unit No.
More
Admirala Tributsa
St.
4
Setl City
economy
Q1 2016
55,740
1,332
Aleksandrit
21/1 Dachny Ave
Konnolakhtins
ky 55
medium
Q1 2016
13,548
265
Page 275
Residence
Angliyskaya
Milya
Angliyskaya
Milya
Baltiyskaya
Volna
Dom Benois 2
Zhemchuzhny
Fregat
Zhemchuzhny
Fregat
Ogni Zaliva
Polezhayevsky
Park
Solnechny
Gorod
Solnechny
Gorod
Address
78/6
Petergofskoye
Hwy
78/6
Petergofskoye
Hwy
Marshala
Kazakova St.
/Kuznetsova Ave
15 Leni Golikova
St.
Admirala
Konovalova St., lot
1
Admirala
Konovalova St., lot
1
Leninsky Ave
Soldata Korzuna
St./ Marshala
Zhukova Ave
St.
Petersburgskoye
Hwy
/Krasnosel’skoye
Hwy /Budennogo
Ave
St.
Petersburgskoye
Hwy
/Krasnosel’skoye
Hwy /Budennogo
Ave
Phase /
building
no.
Developer
Class
Commissi
oning
Sellable
area, sq m
Unit No.
k. 34
Glorax
Development
economy
Q2 2017
12,316
290
k. 35
Glorax
Development
economy
Q4 2017
7,546
190
3,4
Rant
economy
Q1 2016
35,640
752
Voin
economy
Q2 2016
1,834
36
2
Baltiyskaya
Zhemchuzhina
medium
commissio
ned
63,981
1,003
3
Baltiyskaya
Zhemchuzhina
medium
Q1 2016
63,327
1,021
k. 10, 11,
12
BFADevelopment
medium
Q1 2016
109,553
2,120
k.1,2,3
Kompakt
medium
Q1 2016
28,962
527
k.2,3
Setl City
economy
Q4 2016
80,547
2,372
k.4
Setl City
economy
Q4 2017
99,204
2,879
645,629
14,056
The majority of projects in the location belongs to C class and “economy” subclass, focused at mass demand
primarily.
Unit types’ ratio in the rival objects is represented by a majority of small 1-room and 2-room apartments,
totaling up to 68% in the projects.
In general one can characterize competition in the location as intense, especially on the part of integrated
developments.
The forecast for the development of perspective territories in the competitive zone allows evaluating the
increased competition in the immediate vicinity of the Project location. Against the background of existing
competitors’ offer of small-sized apartments, the deficit of comfortable and affordable housing in the Project's
location is likely to occur.
Page 276
The sellable area of the nearest perspective residential projects in the competitive location totals the 4.6 mn sq
m commissioned before 2020, net of the analyzed Project. The population in the location is expected to rise by
230 thous. in the same period.
Project
Address
Developer
District
Sellable area,
sq m
Angliyskaya
Milya 2,3
phases
78/6 Petergofskoye Hwy
Glorax Development
Krasnoselsky
119,486
Solnechny
Gorod
St. Petersburgskoye Hwy /
Krasnosel’skoye Hwy /
Budennogo Ave
Setl City
Petrodvortsovy
1,120,249
Zhemchuzhnaya
Riviera
Matisov Channel Emb.
Baltiyskaya
Zhemchuzhina
Krasnoselsky
44,062
Renovatsia SPb
Kirovsky
345,270
Renovatsia SPb
Kirovsky
347,400
Renovatsia SPb
Kirovsky
275,850
Renovatsia SPb
Kirovsky
472,500
Legenda
Krasnoselsky
71,200
Renovatsia SPb
Krasnoselsky
218,820
Krasnoselsky
26,631
Krasnoselsky
18,662
Satellit-Development
Petrodvortsovy
1,037,000
KVS
Petrodvortsovy
463,000
47 Trest
Petrodvortsovy
5,310
Total:
4,565,440
Avtovo
Ul’yanka
Dachnoye 5
Milingof
Sosnovaya
Polyana 1-5
Avtovskaya St. /Primakova St. /
Chervonnogo Kazachestva St.
Veteranov Ave/Dachny Ave
Leninsky Ave/Novatorov St.
Promyshlennaya St. /Trefoleva St.
/Stachek Ave
Confidential
Veteranov Ave /L.Pilyutova St.
/Chekistov St.
5 Tambasova St.
Novo Sergievo
V Strel’ne
Krasnosel’skoye Hwy
Krasnosel’skoye Hwy / St.
Petersburgskoye Hwy /
Budennogo Ave
Landskrona
Development
Megapolis-Invest
The rival projects are comparable to the analyzed project in terms of location and transport accessibility. All are
built in locations far removed from the subway stations, with a limited amount of social and commercial
infrastructure. An important role is played by difficult transport accessibility to the new neighborhoods.
Currently many developers offer finished units in their residential complexes. When choosing an apartment in
the objects of mass demand, one pays a special attention to the presence and composition of finishing.
The average price in comparable objects accounts 94.6 thous.rub./sq m. If several phases of a project are
considered, there is a dependence of the price upon the readiness, ranging from 4 to 16% in different objects.
Page 277
Developer
Finishing
Aver.
price,
rub./sq
m
full
110,358
none
107,225
none
k. 10,
11, 12
Setl City
Konnolakhtins
ky 55
Glorax
Development
Glorax
Development
Rant
Voin
Baltiyskaya
Zhemchuzhina
Baltiyskaya
Zhemchuzhina
BFADevelopment
Aver.
rate of
sales,
pcs/
quarter
92.7
k.1,2,3
k.2,3
k.4
Residence
Phase
/buildi
ng no.
More
4
Aleksandrit
Angliyskaya Milya
k. 34
Angliyskaya Milya
k. 35
Baltiyskaya Volna
Dom Benois 2
Zhemchuzhny
Fregat
Zhemchuzhny
Fregat
3,4
Ogni Zaliva
Polezhayevsky
Park
Solnechny Gorod
Solnechny Gorod
2
3
Aver. price
1 pkg sp.,
rub.
Aver. price of
commerc.,
rub./sq m
400,000
not on sale
24.7
-
not on sale
79,407
53
not on sale
75,000
none
74,866
48
not on sale
not on sale
half-finished
half-finished
83,896
111,500
19.7
n/a
not on sale
not on sale
half-finished
107,020
52
-
-
half-finished
103,100
70
-
-
full
95,742
143.0
not on sale
not on sale
Kompakt
none
99,706
45.5
-
-
Setl City
Setl City
full
full
89,029
75,636
446.2
742.3
400,000
400,000
not on sale
106,875
From the standpoint of a buyer a developer's reputation plays an important role in choosing of apartment. In
mass segment a developer’s reputation is based upon the number of houses built and commissioned according
to the declared schedule. It is a priority for buyers to guarantee the object completion by the specified time,
particularly in an unstable economic situation.
In this regard, the undisputed market leader in the location is Setl City - the company, which sells the highest
number of apartments.
The average quarterly sales rate in comparable complexes of the location is around 140 units.
Location X. Kalina-Park, CINEMA
The competititve zone is a neighborhood bounded by the railroad ROW, Marshala Blyukhera Ave with adjacent
blocks, and the Neva river.
Mass housing construction in the competitive zone has started since 2010 in former industrial and storage
territories, i.e. in the blocks north and south of Marshala Blyukhera Ave, between Kushelevskaya Rd. and
Kondratievsky Ave
Over 400 thous. sq m of housing have been built and sold in the location in the last 5 years. The majority of
housing currently on sale is positioned in subsequent phases of complexes, which have entered the market
earlier.
Page 278
Sellable area of residential complexes currently offered for sale in the location totals 443.7 thous. sq m.
All the housing projects in the zone refer to C class and are focusing primarily at mass demand. Ratio of unit
types and areas offered for sale in the rivaling complexes is represented mainly by small-size 1-room and 2room apartments, which share totals ca. 70% in the projects.
Residence
Ekaterininsky
Ekaterininsky
Kantemirovsky
Kantemirovsky
Landyshi
Address
54 Bestuzhevskaya
St.
54 Bestuzhevskaya
St.
M.Blyukhera Ave
/Kushelevskaya Rd.
M.Blyukhera Ave/
Kushelevskaya Rd.
Polustrovsky Ave
/Mendeleyevskaya
St.
Phase /
building
no.
Developer
Class
Commissioning
Sellable
area,
sq m
Units
no.
k.1
Okhta Group
economy
Q1 2016
28,012
660
k.2, 3
Okhta Group
economy
Q4 2016
35,991
850
k. 5, 7
CDS
economy
Q1 2016
50,886
1196
k. 8
CDS
economy
Q3 2016
22,247
541
k.1
LenSpetsSMU
economy
Q4 2017
30,120
697
Page 279
Residence
Landyshi
Marshal
Medalist
Pifagor
Polustrovo
Park
Flamingo
Flamingo
Address
Polustrovsky Ave
/Mendeleyevskaya
St.
M.Blyukhera Ave
/58 Kondratievsky
Ave
12 M.Blyukhera
Ave
12 M.Blyukhera
Ave
68/3 Kondratievsky
Ave
12 M.Blyukhera
Ave
/Laboratornaya St.
12 M.Blyukhera
Ave
/Laboratornaya St.
Phase /
building
no.
Developer
Class
Commissioning
Sellable
area,
sq m
Units
no.
k.2
LenSpetsSMU
economy
Q2 2018
40,247
821
k.1, 2
L1
economy
Q3 2016
62,858
1472
Lider Group
economy
Q4 2016
51,933
1170
Grafit
economy
Q1 2017
8,700
208
k.1
Setl City
economy
Q3 2018
85,723
2352
sec.1-3
KapStroy
economy
Q4 2016
15,791
337
sec.4-6
KapStroy
economy
Q1 2018
11,199
239
Total:
443,707
10,543
Of future projects in the location, the redevelopments of former industrial territories at Beloostrovskaya St. and
Bolshoy Sampsonievsky Ave are worth mentioning. Sellable area of the projects declared in the competitive
zone totals ca. 631 thous. sq m.
Project
Address
District
Developer
Sampsonievsky
LIFE-Lesnaya
68 B. Sampsonievsky Ave
77 B. Sampsonievsky Ave
Beloostrovskaya St.
28 Beloostrovskaya St.
9 Beloostrovskaya St.
55 Vyborgskaya Emb.
8 Vyborgskaya
7 J.Duclos St.
4 Krapivny Lane
Lesnoy Ave
10-12 Novolitovskaya St.
Vyborgsky
Vyborgsky
Primorsky
Primorsky
Primorsky
Vyborgsky
Vyborgsky
Vyborgsky
Vyborgsky
Vyborgsky
Vyborgsky
Otdelstroy
GTC
Confidentia
LenSpetsSMU
Klimov Works
GTC
York
Arsenal-Nedvizhimost’
4
Confidential
Pioner
Total:
Sellable area,
sq m
160,000
73,000
37,151
40,000
40,000
25,000
16,277
4,552
5,500
32,508
112,444
546,432
The forecast for the development of perspective territories in the competitive zone allows to evaluate the
weakening of competition in the immediate vicinity of the analyzed objects. The projects most likely to be
implemented are located closer to the waterfront. These projects will have an additional competitive advantage
- the spectacular views out of a number of apartments.
Page 280
Residence
Address
Medalist
54 Bestuzhevskaya
St.
54 Bestuzhevskaya
St.
M.Blyukhera Ave
/Kushelevskaya Rd.
M.Blyukhera Ave
/Kushelevskaya Rd.
Polustrovsky Ave /
Mendeleyevskaya
St.
Polustrovsky Ave /
Mendeleyevskaya
St.
M.Blyukhera Ave
/58 Kondratievsky
Ave
12 M.Blyukhera Ave
Pifagor
12 M.Blyukhera Ave
Polustrovo
Park
68/3 Kondratievsky
Ave
12 M.Blyukhera Ave
/Laboratornaya St.
12 M.Blyukhera Ave
/Laboratornaya St.
Ekaterininsky
Ekaterininsky
Kantemirovsky
Kantemirovsky
Landyshi
Landyshi
Marshal
Flamingo
Flamingo
Phase /
building
no.
Aver.
price
1 pkg
sp., mn
rub.
not on
sale
not on
sale
Aver. price
of
commerc.,
rub./sq m
Finishing
Aver.
price,
rub./sq m
Aver. rate of
sales, pcs/
quarter
k.1
none
91,847
51
k.2, 3
none
86,857
17
k. 5, 7
none
90,193
54.0
0.65
135,000
k. 8
none
88,708
sales start
0.65
135,000
k.1
full
84,029
sales start
not on
sale
not on sale
k.2
full
79,617
158.0
not on
sale
not on sale
k.1, 2
none
99,129
51.0
0.94
106,920
mixed
105,282
114
not on sale
none
86,249
22
k.1
full
85,966
sales start
n/a
not on
sale
not on
sale
sec.1-3
none
82,701
64
0.59
90,000
sec.4-6
none
82,133
56
0.59
90,000
105,000
100,000
not on sale
115,650
The average price within the competitive zone is in the interval from 79.6 to 105.3 thous. rub./sq m. The lowest
prices in the location are found in “Landyshi” residential complex by LenSpetsSMU. The most expensive is
currently “Medalist” residential complex, since more expensive apartments on the upper floors remain on sale.
High sales rate one can observe in building 2 of “Landyshi”, where prices are minimal wihin the competitive
zone. There are also high demand levels in “Medalist”, where previously a large number of apartments at low
prices was on sale.
The average quarterly sales rate in the location is at the level of 65 units.
Location XI. Tsivilizatsiya
The competitive zone comprises 3 large neighborhoods: 2 complex redevelopments of former industrial
territories, and 1 of former agricultural lands. Firstly, residential complexes, built on the former ash dump site at
Dalnevostochny Ave are considered as competitors. This area is actively built up to date. Secondly, the former
industrial area at Oktyabrskaya embankment in the vicinity of the Project, that has recently started to develop.
Page 281
Rusanovka residential neighborhood, where two large residential complexes are being built, is also considered.
Besides, residential complexes under construction in Kudrovo, Vsevolozhsky district of Leningradskaya Oblast’,
are considered.
17 residential complexes meet the requirements. Sellable area of objects currently on sale in the location totals
1.3 mn sq m or 30.2 thous. units.
Residence
Address
7 Stolits. London
Kudrovo
7 Stolits. London
Kudrovo
Vesna-2
Vesna-2
Vesna-3
Vernisazh
Kudrovo
Kudrovo
Kudrovo
Kudrovo
Krylenko St.
14
Vivat
Phase /
building
no.
9/1- 13/1
10/1,10/2,
10/3
k. 1
k. 2
k. 1
k. 7
1,2
Developer
Class
Commissi
oning
Sellable
area, sq m
Unit No.
Setl City
economy
Q3 2017
227,227
5,916
Setl City
economy
Q4 2017
58,684
1,713
CDS
CDS
CDS
Polis Group
economy
economy
economy
economy
Q1 2016
Q2 2016
Q3 2018
Q4 2017
43,300
6,000
30,000
24,624
1,221
168
742
896
Donk
economy
Q4 2016
17,931
532
Page 282
Residence
Evropeisky
Evropeisky
ZimaLeto
ZimaLeto
ZimaLeto
Capital
Capital
Kudrov-House
Lastochkino
Gnezdo
Legenda na
Dalnevostochnom
Nevsky Etalon
Novy Okkervil’ Dom u
Kashtanovoy
Alleyi
Ryabinovoy Alleyi
Novy Okkervil’ Dom u Sirenevoy
Alleyi
’Yunost’
Prinevsky
Progress
Address
Leningradska
ya St
./Tsentral’nay
a St.
Leningradska
ya St.
/Tsentral’nay
a St.
Energetikov
Ave 9
Energetikov
Ave 9
Energetikov
Ave 9
Kudrovo
Novy
Okkervil’
Lot no. 2-3 ,
block no. 2
Oktyabrskay
a Emb. 118
Dalnevostoc
hny Ave 12
Podvoiskogo
St. 8
Phase /
building
no.
Developer
Class
Commissi
oning
Sellable
area, sq m
Unit No.
k. 6.4; 6.5
Investtorg
economy
Q2 2016
32,535
722
k. 2.1; 2.2
Investtorg
economy
Q3 2016
38,340
848
k.1
Setl City
economy
Q3 2016
31,966
830
k.2
Setl City
economy
Q4 2016
27,131
669
k.3
Setl City
economy
Q2 2017
43,030
1,108
economy
Q1 2016
98,357
1,732
economy
Q4 2018
63,608
1,190
Prok
economy
Q2 2016
10,216
261
LenSpetsSMU
economy
commissio
ned
134,302
3,197
Legenda
medium
Q2 2018
39,321
627
PSK
economy
Q1 2016
9,279
194
Otdelstroy
economy
Q4 2016
48,010
1,120
Otdelstroy
economy
Q4 2018
43,922
962
Otdelstroy
economy
Q4 2017
75,590
1,592
k.1-4
Seven Suns
economy
Q4 2016
89,514
2,209
k.5
CDS
economy
Q2 2017
35,038
836
k.5
MAVIS
economy
Q1 2017
16,799
424
1-3
Temp
medium
Q3 2017
26,326
489
Total:
1,271,050
30,198
lot 4, 15
lot 6
k.4-9, 11,
12
Dybenko St.
/Solidarnosti
Ave
Dybenko St.
/Solidarnosti
Ave
Dybenko St.
/Solidarnosti
Ave
Krylenko St.
Oktyabrskay
a Emb. 122
Kudrovo
Skladskaya
St. /Soyuzny
Ave
Stroitelny
Trest
Stroitelny
Trest
The majority of projects in the location belong to C class, "economy” subclass and are focused primarily at
mass demand.
Page 283
Ratio of apartment types and areas in the complexes is characterized by mainly studios, small 1-room and 2room units, totaling around 70% of the projects’ area.
In general, the competition of the analyzed project can be assessed as moderate, for the only residential
complex under development in the vicinity is “ ’Yunost’”, which will not have a significant impact on the future
Project.
The forecast for the perspective territories development in the competitive zone allows evaluating the increased
competition in the immediate vicinity of the Project. Against the background of existing competitors' offer in
the form of small-sized apartments, there is a probability of occurring a shortage of comfortable and affordable
apartments in the project location.
The nearest future projects’ area in the competitive location totals 1.04 mn sq m of housing commissioned
before 2020, net of the analyzed Project. The population in the location is expected to grow by 68 thous.
Project
’Yunost’
Prinevsky
Renaissance
ZimaLeto
Malaya
Okhta
Fregat
Phase /
building
no.
k.5-8
Developer
District
Sellable area,
sq m
Seven Suns
Nevsky
77,950
k.1-4,6-7
CDS
Nevsky
264,999
Confidential
Nevsky
67,000
AAG
Bazis
BFA-Development
Nevsky
Nevsky
Nevsky
75,000
23,059
400,000
Temp
Nevsky
49,917
Setl City
Krasnogvardeisky
27,492
Utkin Ave
Renovatsia SPb
Krasnogvardeisky
39,000
51 Novoselov St.
StroyProektSPb
Nevsky
Total:
14,531
1,038,948
Address
Krylenko St.
122 Oktyabrskaya
Emb.
15 Dalnevostochny
Ave
8 Dybenko St.
Krylenko St.
54 Oktyabrskaya Emb.
Soyuzny Ave
/Kollontay St.
9 Energetikov Ave
2 buildings
k.4
The majority of mass market housing projects is currently being built in locations far away from the subway
stations, still this factor plays a significant role in pricing of this segment.
Rival projects are comparable with the analyzed Project by their location and transport accessibility. All are
buing built in the redevelopment zone, except those of Kudrovo with limited social and commercial
infrastructure. An important role is played by difficult transport accessibility to the new neighborhoods. Thus
Oktyabrskaya Emb is characterized by high traffic; it is one of the city's main thoroughfares, where there is a
large number of heavy trucks. The planned bridge across the Neva river in alignment with Kollontay St. will
help to unload the roads.
Currently many developers offer the option of finishing in their residential complexes.
Availability and
composition of finishing play a special role in choosing an apartment in mass demand residences.
Page 284
The average price of analogous objects varies in the location from 78 thous. rub/sq m without finishing up to 86
thous. rub./sq m fully finished. Thereby the average price of sq m accounts 83 thous. rub. in rival complexes.
If several phases of a project are considered, there is a dependence of the price upon the readiness, ranging
from 4 to 8% in different objects.
Aver. price
of
commerc.,
rub./sq m
400,000
not on sale
575,000
not on sale
not on sale
not on sale
not on sale
not on sale
not on sale
not on sale
not on sale
not on sale
600,000
600,000
600,000
600,000
114,422
not on sale
not on sale
not on sale
224,000
not on sale
not on sale
not on sale
n/a
n/a
n/a
n/a
not on sale
not on sale
445,000
126,010
129.0
not on sale
134,613
92,059
41.3
not on sale
not on sale
half-finished
89,551
74.9
not on sale
not on sale
Otdelstroy
none
83,731
sales
start
not on sale
not on sale
Otdelstroy
half-finished
81,889
sales
start
not on sale
not on sale
k.1-4
k.5
k.5
Seven Suns
CDS
MAVIS
full
none
none
68,909
61,323
65,727
not on sale
545,000
not on sale
not on sale
not on sale
not on sale
1-3
Temp
full
84,968
not on sale
not on sale
Residence
Developer
Finishing
7 Stolits. London
7 Stolits. London
Vesna-2
Vesna-2
9/1-13/1
10/1,10/2, 10/3
k. 1
k. 2
Setl City
Setl City
CDS
CDS
full
full
none
none
82,734
78,328
90,301
83,269
Vesna-3
k. 1
CDS
none
71,879
Vernisazh
Vivat
Evropeisky
Evropeisky
ZimaLeto
ZimaLeto
k. 7
1,2
k. 6.4; 6.5
k. 2.1; 2.2
k.1
k.2
Polis Group
Donk
Investtorg
Investtorg
Setl City
Setl City
none
none
half-finished
half-finished
full
full
78,028
75,787
72,043
74,517
102,558
108,642
ZimaLeto
k.3
Setl City
full
105,216
Capital
lot 4, 15
Stroitelny Trest
half-finished
91,666
Capital
lot 6
Stroitelny Trest
half-finished
80,100
Prok
none
65,625
LenSpetsSMU
mixed
78,579
Legenda
mixed
99,939
PSK
none
Otdelstroy
Kudrov-House
Lastochkino
Gnezdo
Legenda na
Dalnevostochnom
Nevsky Etalon
Kashtanovoy
Alleyi
Ryabinovoy Alleyi
Novy Okkervil’ Dom u Sirenevoy
Alleyi
’Yunost’
Prinevsky
Progress
Aver.
rate of
sales,
pcs/
quarter
136
40
76
74
sales
start
158
30
74
31
121.2
173.3
sales
start
62.0
sales
start
18.8
not on
sale
Aver. price
1 pkg sp.,
rub.
Phase /
building no.
Aver.
price,
rub./sq m
k.4-9, 11, 12
n/a
61.8
96.0
sales
start
Page 285
Within the city border high sales rates are recorded in the complexes by the large developers, like Setl City and
Legenda. In suburbs Setl City and Polis Group are the leaders of sales.
From the standpoint of a buyer, a developer's reputation plays an important role in choosing an apartment. In
mass segment a developer’s reputation is based upon the number of houses built and commissioned according
to the declared schedule. It is a priority for buyers, to have the object completion guaranteed by the specified
time, particularly in an unstable economic situation.
The average quarterly sales rate in comparable complexes of the location is around 82 units.
Location XII. Novaya Okhta, Tsvetnoy Gorod, Ruch’i
The competitive zone is represented by the new complex development area in the northern part of
Vsevolozhsky district, where the housing construction has started from the redevelopment of “Ruch’i” JSC
former agricultural territories.
The housing complexes under construction located in Murino, Novoye
Devyatkino, Lavriki settlements refer to it. Regarding that the analyzed Projects are in Krasnogvardeisky district,
the residential developments under construction, closest to them will be considered. In addition one residential
complex located in Kalininsky district is considered within the zone.
Page 286
29 residential complexes meet the requirements. Sellable area of residential objects on sale totals 1.7 mn sq m
in the location, which accounts 41% of suburban housing under construction.
Residence
GreenLandiya
GreenLandiya
UP-kvartal
Svetlanovsky
Building
no.
k.
12,13,14,
15
k. 2.1,2.4
5
Address
Developer
Class
Commissi
oning
Sellable
area,
sq m
Units
no.
Murino
Setl City
economy
Q2 2017
124,437
3,642
Murino
Setl City
economy
Q1 2018
41,033
1,189
Bugry
FSK Lider
economy
Q4 2016
38,595
1,076
3,390
84
42,766
1,135
VillaCity
Murino
VITAMIN
Murino
VillaDevelopmen
t
Lider Group
economy
economy
commissio
ned
Q4 2018
Page 287
Class
Commissi
oning
Sellable
area,
sq m
Units
no.
economy
Q4 2020
10,315
266
economy
economy
economy
economy
economy
economy
economy
Q4 2016
Q2 2017
Q4 2017
Q2 2017
Q3 2017
Q3 2017
Q2 2016
15,320
13,303
15,166
22,218
11,480
6,844
9,077
583
480
600
582
322
183
264
PromServis
economy
Q4 2016
65,805
958
PromServis
economy
Q4 2017
30,155
439
Normann
Normann
economy
economy
Q4 2016
Q1 2017
28,915
31,940
788
884
Russkaya Skazka
economy
Q3 2018
44,728
1,210
Polis Group
Polis Group
Petrostroy
Petrostroy
Petrostroy
economy
economy
economy
economy
economy
Q4 2016
Q4 2017
Q2 2016
Q2 2019
Q2 2020
61,029
66,365
8,792
10,494
7,424
2,441
2,047
291
331
196
Murino
LenSpetsStroy
economy
Q4 2017
69,000
1,349
Murino
LenSpetsStroy
economy
Q4 2017
51,233
1,146
Murino
Murino
Polis Group
Polis Group
economy
economy
Q2 2017
Q2 2017
15,168
19,400
502
485
1 phase 1
Murino
CDS
economy
Q1 2016
50,000
907
1 phase 2
Murino
CDS
economy
Q4 2016
38,318
684
1 phase 3
Murino
CDS
economy
Q2 2017
28,302
725
k. 9,10
Murino
CDS
economy
Q2 2016
38,911
997
k. 7
Murino
CDS
economy
Q1 2016
12,865
323
k. 12
Murino
CDS
economy
Q1 2016
6,825
175
4-5, 1-3
Murino
Zapstroy
economy
Q4 2016
22,857
628
economy
Q4 2016
15,504
308
economy
economy
Q2 2016
Q1 2016
65,820
69,190
1,850
1,976
economy
Q4 2016
30,742
392
economy
Q4 2016
36,276
768
Residence
Building
no.
Address
YouPiter
20
Murino
Alfavit
Alfavit
Alfavit
Viktoriya
Viktoriya
Viktoriya
Vorontsov
k.5
k.2
k.1014
1; 2
Gamma
1
Gamma
2
Desiatkino 2.0
Desiatkino 2.0
Dom na
Ozernoy
Kraski Leta
Kraski Leta
Lastochka
Lastochka
Lastochka
Leningradskay
a Perspektiva
Leningradskay
a Perspektiva
Moy Gorod
Moy Gorod
Murinsky
Posad
Murinsky
Posad
Murinsky
Posad
Novoye
Murino
Novoye
Murino
Novoye
Murino
Okhtinskaya
Duga
Severnaya
Palitra
Sily Prirody
Sily Prirody
k. 1,2
k. 3
1-5
6
sec.
sec.
sec.
phase
1,2,3
13
14
Murino
1,2
3,4
Sokol
Solnechny
Devyatkino
Devyatkino
Devyatkino
Murino
Murino
Murino
Murino
Novoye
Devyatkino
Novoye
Devyatkino
Murino
Murino
Novoye
Devyatkino
Murino
Murino
Murino
Murino
Murino
Murino
Murino
Murino
7,13
Murino
Developer
ArsenalNedvizhimost’
Petrostroy
Petrostroy
Petrostroy
MAVIS
MAVIS
MAVIS
Titan
MonArkhDevelopment
2 Development
2 Development
StroyTechInvest2
5
Page 288
Residence
Building
no.
Address
Solnechny
6
Murino
Solnechny
11
Murino
Solnechny
9
Murino
Solnechny
14
Murino
Staraya
Krepost’
Territoriya
Tri Kita
Tri Kita
Tridevyatkino
Tsarstvo
Tridevyatkino
Tsarstvo
Tridevyatkino
Tsarstvo
Tridevyatkino
Tsarstvo
phases
1,2
1,2
2
3
Shkol’naya 2
Shosse v
Lavriki 42
Eland
Eland
Eland
Class
Commissi
oning
Sellable
area,
sq m
Units
no.
economy
Q2 2017
9,121
180
economy
Q4 2017
27,179
588
economy
Q2 2017
23,389
556
economy
Q2 2018
3,716
62
Developer
Murino
RosStroyInvest
economy
Q4 2018
57,649
1,529
Murino
Murino
Murino
Lider Group
Lider Group
Lider Group
economy
economy
economy
Q4 2018
Q2 2017
Q4 2018
23,869
68,793
68,649
642
1,802
1,816
k.7
Murino
Unisto Petrostal’
economy
Q1 2017
48,784
882
k.8
Murino
Unisto Petrostal’
economy
Q3 2017
20,269
438
k.9-10
Murino
Unisto Petrostal’
economy
Q2 2017
42,079
1,008
k.11
Murino
Unisto Petrostal’
economy
Q4 2017
24,599
503
1
Novoye
Devyatkino
PromServis
economy
Q2 2016
12,484
304
3
Murino
MISK
economy
Q2 2016
1,900
38
6
7
8
Murino
Murino
Murino
NCC
NCC
NCC
Q1 2016
Q1 2017
Q2 2017
Total:
18,121
264
12,937
221
9,415
228
1,924,567 49,042
The majority of projects in the location belong to C class, "economy” subclass and is focused primarily at mass
demand.
In general one can characterize competition in the location as intense. At that over 82% of the projects in the
competitive zone are to be commissioned between 2016 and 2017.
increased competition in close proximity to the project location. In addition, development potential near
Murino, Devyatkino and Bugry settlements will decline. Against the background of small-sized apartments on
sale, there is a probability of shortage of comfortable and affordable apartments in the Projects’ location.
Total area of the nearest perspective projects in the location accounts 5.2 mn sq m of housing to be
commissioned ahead of 2020, net of the analyzed Projects. As a result the population in the considered location
will grow by 260 thous.
Page 289
Project
UP-kvartal
Svetlanovsky
Noviye Gorizonty
Noviye Gorizonty
Address
Phase
/building
no.
Developer
District
Sellable
area, sq m
Bugry
phase 2
FSK Lider
Vsevolozhsky LO
73,457
Bugry
phase 2
CDS
Vsevolozhsky LO
313,212
Bugry
phase 3
CDS
Vsevolozhsky LO
103,788
Vsevolozhsky LO
675,000
Vsevolozhsky LO
306,000
Bugry
Rosengineering
Samolet LO
Vsevolozhsky LO
266,000
Bugry
USG Development
Vsevolozhsky LO
225,000
Bugry
Bugry
Alfavit
Devyatkino
Petrostroy
Vsevolozhsky LO
23,188
Azimut
Residence in
Novodevyatkino
Lavriki
Lider Group
Vsevolozhsky LO
8,000
Lavriki
Prok
Vsevolozhsky LO
13,500
GreenLandiya
Murino
phase 2,
k.2.2,2.3,2.52.14
Setl City
Vsevolozhsky LO
479,834
YouPiter
Murino
k.21
Vsevolozhsky LO
126,520
Viktoriya
Murino
Kraski Leta
Murino
phase
6,7,8,9,10
7…
Leningradskaya
Perspektiva
Murino
phase 3
MAVIS
Vsevolozhsky LO
51,749
Polis Group
Vsevolozhsky LO
172,721
LenSpetsStroy
Vsevolozhsky LO
66,767
Murin Grad
Murino
Grand Familiya
Vsevolozhsky LO
150,000
Murinsky Posad
Murino
phase 3…
CDS
Vsevolozhsky LO
328,144
Novoye Murino
Murino
k. 11
CDS
Vsevolozhsky LO
6,800
Okhtinskaya Duga
Murino
phase 2,3
Vsevolozhsky LO
43,710
Severnaya Palitra
Murino
k.3-6
Vsevolozhsky LO
46,439
Sily Prirody
Murino
phase 2
Territoriya
Murino
k.3,4,5,6
Tsveta Radugi
Galaktika
Gamma
Novoye
Devyatkino
Shafirovsky
Zapstroy
MonArkhDevelopment
2 Development
Vsevolozhsky LO
214,990
Lider Group
Vsevolozhsky LO
64,731
Murino
MAVIS
Vsevolozhsky LO
6,000
Murino
VIpS
Vsevolozhsky LO
200,000
Murino
CDS
Vsevolozhsky LO
185,000
Murino
Novoye
Devyatkino
Novoye
Devyatkino
Novoye
Devyatkino
Novoye
Devyatkino
Novoye
Devyatkino
Volgodonskoy
RosStroyInvest
Vsevolozhsky LO
47,720
phase 2…
Glavstroikompleks
Vsevolozhsky LO
77,060
3
PromServis
Vsevolozhsky LO
20,357
Dal’piterstroy
Vsevolozhsky LO
285,000
Grad
Vsevolozhsky LO
294,000
PromServis
Vsevolozhsky LO
20,000
Dal’piterstroy
Krasnogvardeisky
185,000
Page 290
Project
Address
KvartALL
Ave /
Shafirovsky Ave
SPb
28 Khimikov St.
SPb
Dom na Ulitse
Khimikov
Phase
/building
no.
Developer
District
Sellable
area, sq m
Teorema
Krasnogvardeisky
150,000
Total:
5,229,687
The majority of mass market housing projects is currently being built in locations far away from metro stations,
yet this factor plays a significant role in pricing of this segment objects. Traditionally, objects located within
walking distance from a metro station (15 minutes walk), are more attractive for buyers compared with
counterparts, to which one needs to travel on a personal or public transport.
The competitor complexes are comparable with the Projects by location and transport accessibility. All are
being built in the new residential development area with a limited amount of social and commercial
infrastructure. An important role is played by the difficult transport accessibility to the new neighborhoods.
Availability and
The average price in comparable complexes varies from 68 thous. rub./sq m in units without finishing to 78
thous. rub./sq m fully finished. Thus the average price of sq m accounts 76 thous. rub. in rival projects. If
several phases of a project are considered, there is a dependence of the price upon the readiness, ranging from
4 to 8% in different objects.
Residence
Building
Finishing
UP-kvartal Svetlanovsky
Alfavit
Alfavit
Alfavit
Eland
Novoye Murino
VillaCity
Novoye Murino
Murinsky Posad
Moy Gorod
Novoye Murino
Eland
YouPiter
Eland
Solnechny
Murinsky Posad
Solnechny
Solnechny
5
none
none
none
none
semi-full
none
none
none
none
none
none
semi-full
full
semi-full
full
none
full
full
6
k. 7
k. 12
1
1
14
k. 9,10
8
20
7
7,13
1
2
9
14
Aver.
price,
rub./sq m
64,790
71,250
69,146
58,202
99,514
93,000
92,852
92,000
89,225
85,631
85,250
82,700
81,306
80,887
80,850
80,383
79,200
79,200
Aver. rate of
sales, pcs/
quarter
190
60
60
60
55
58
5
50
100
90
130
114
40
49
117
103
53
sales start
Aver. price, 1
pkg sp., mn
rub.
open parking
open parking
-
Aver. price of
commerc.,
rub./sq m
104,500
112,600
112,600
112,600
140,000
90,000
absent
90,000
102,600
not on sale
90,000
140,000
not on sale
140,000
102,600
-
Page 291
full
full
mixed
none
full
Aver.
price,
rub./sq m
78,774
78,576
78,075
77,750
75,280
Aver. rate of
sales, pcs/
quarter
92
90
250
165
51
Aver. price, 1
pkg sp., mn
rub.
-
Aver. price of
commerc.,
rub./sq m
102,600
for rent
full
75,132
330
open parking
117,000
none
full
full
mixed
mixed
none
none
none
none
none
full
full
none
none
semi-full
none
none
none
none
none
none
full
full
full
none
74,571
74,459
74,363
72,866
72,630
70,765
69,657
67,728
67,263
66,990
66,311
64,370
64,166
63,900
63,205
63,078
63,023
60,800
58,610
58,610
58,553
58,288
56,850
54,426
53,700
130
50
51
sales start
60
115
320
145
15
250
100
70
10
142
114
270
40
15
74
70
150
70
70
70
182
open parking
open parking
open parking
open parking
not on sale
121,000
for rent
135,000
not on sale
163,903
for rent
for rent
absent
91,300
not on sale
163,903
135,000
135,000
for rent
for rent
for rent
91,300
mixed
45,631
80
-
-
mixed
44,590
80
-
-
none
none
full
full
full
43,991
60,579
60,000
43,798
37,714
12
11
30
46
46
open parking
-
65,000
-
Residence
Building
Finishing
Solnechny
Solnechny
Tri Kita
Murinsky Posad
Viktoriya
6
11
2
GreenLandiya
Moy Gorod
GreenLandiya
Viktoriya
Territoriya
Tri Kita
Lastochka
Kraski Leta
VITAMIN
Severnaya Palitra
Desiatkino 2.0
Viktoriya
Tridevyatkino Tsarstvo
Shosse v Lavriki 42
Sily Prirody
Staraya Krepost’
Kraski Leta
Desiatkino 2.0
Sokol
Lastochka
Lastochka
Okhtinskaya Duga
Sily Prirody
Leningradskaya
Perspektiva
Leningradskaya
Perspektiva
Vorontsov
Shkol’naya 2
Dom na Ozernoy
Gamma
Gamma
1
3
k.2
k.
12,13,14,
15
13
k. 2.1,2.4
k.1014
1,2
3
sec.
1-5
k. 1,2
k.5
k.8
3
1,2
1,2
6
k. 3
sec.
sec.
4-5, 1-3
k.9-10
k.7
k.11
3,4
phase
1,2,3
1; 2
1
1
2
High sales rates are recorded in complexes by big developers, such as: Setl City, Polis Group, Lider Group,
Normann et al. From the standpoint of a buyer, a developer's reputation plays an important role in choosing an
apartment.
In mass segment a developer’s reputation is based upon the number of houses built and
Page 292
commissioned according to declared schedule.
It is a priority for buyers to have the object completion
guaranteed by the specified time, particularly in an unstable economic situation.
The average quarterly sales rate in comparable complexes of the location is around 95 apartments.
Location XIII. Rzhevka
The competitive zone of the Project comprises several projects under constructiobn in Krasnogvargeisky district.
Apart from this, the adjacent Yuzhny neighborhood in Vsevolozhsk, and the new complex development territory
in Yanino were considered.
11 residential complexes meet the requirements. Sellable area of residential objects on sale totals 440.6 thous.
sq m and 10.4 thous. apartments in the zone.
Residence
Building
Address
Developer
Class
Commissioning
Sellable
area,
sq m
Unit
No.
Zhernovka
bdg 17
2/4 2nd
Zhernovskaya St.
SPb
DM
medium
Q4 2016
4,506
80
Page 293
Developer
Class
Commissioning
Sellable
area,
sq m
Unit
No.
Lenstroitrest
economy
commissioned
23,649
528
Renovatsia SPb
economy
Q4 2016
39,467
853
Renovatsia SPb
economy
Q4 2017
22,549
439
Yanino-1
Lenstroitrest
economy
Q4 2016
14,203
301
Yanino-1
Lenstroitrest
economy
Q4 2017
23,623
519
NSK
economy
Q2 2016
8,959
194
NSK
economy
Q2 2016
7,142
158
NSK
economy
Q1 2017
2,563
82
Yanino
CDS
economy
Q1 2016
22,298
598
Yanino
CDS
economy
Q2 2016
23,200
620
Yanino
CDS
economy
Q4 2016
23,273
640
1 Zanevskaya St.
Yanino-1
6 Novaya St.,
Yanino-1
3 7th liniya Yanino1
Yanino-1, lot 12
Kol’tsevaya St.
Stroitel’noye
Upravleniye
Stroitel’noye
Upravleniye
Stroitel’noye
Upravleniye
Stroitel’noye
Upravleniye
economy
commissioned
19,197
377
economy
Q3 2016
31,250
647
economy
Q2 2017
11,786
284
economy
Q2 2018
8,703
176
k. ,
Yanino-1
Normann
economy
Q1 2017
25,968
825
7.1-7.7
Yanino-1
KVS
economy
Q4 2016
78,175
1,652
Glavstroikompleks
economy
Q2 2016
21,500
430
Glavstroikompleks
economy
Q2 2016
12,573
670
Garant
Development
medium
Q3 2015
5,477
120
Garant
Development
medium
Q2 2016
10,533
228
Total:
440,594
10,421
Residence
Building
N’yu-Ton
k.1,2
Stereos
Stereos
Jaanila
country
Jaanila
country
2 phasek. 1,2,3
2 phasek. 4,5,6,7
Brusnichny
1
Brusnichny
2
Brusnichny
3
Novoe
Yanino
Novoe
Yanino
Novoe
Yanino
Yaninsky
Kaskad-1
Yaninsky
Kaskad-2
Yaninsky
Kaskad-3
Yaninsky
Kaskad-4
Yarkiy
Yasno.Yanino
1
2
3
4
Raduzhny
6 kv. 7,2
Raduzhny
6 kv. 1,6
Yuzhnaya
Polyana
bdg 5
Yuzhnaya
Polyana
bdg 4
Address
35 Irinovsky Ave
SPb
lot 4 Ryabovskoye
Hwy /Belomorskaya
St. SPb
lot 1 Ryabovskoye
Hwy /Belomorskaya
St. SPb
14 Novaya St.
Yanino-1
14 Novaya St.
Yanino-1
37 Shosseinaya
St. Yanino-1
Yuzhny
neighborhood,
Vsevolozhsk
Yuzhny
neighborhood,
Vsevolozhsk
Yuzhny
neighborhood,
Vsevolozhsk
Yuzhny
neighborhood,
Vsevolozhsk
Page 294
The majority of projects in the location belong to C class, "economy” subclass and is focused primarily at mass
demand.
increased competition in close proximity to the project location. In parallel with this, development potential
near Yanino settlement will decline, because traffic problems on Koltushskoe highway have already created a
tense situation directly in Krasnogvardeyskiy district and at the entrances to it.
Total area of the nearest perspective projects in the location accounts 2.02 mn sq m of housing to be
commissioned ahead of 2020. As a result the population in the considered location is expected to grow by 100
thous., the Project residents not regarded.
Project
Shafirovsky
KvartALL
Dom na Ulitse
Khimikov
Stereos
Address
Phase /
building
no.
Volgodonskoy
Ave / Shafirovsky
Ave SPb
28 Khimikov St.
SPb
Ryabovskoye Hwy
/Belomorskaya St.
48 2nd
Zhernovskaya St.
Yuzhnaya Polyana
Vsevolozhsk
Raduzhny
Vsevolozhsk
Yasno.Yanino
Jaanila country
Jaanila country
Yarkiy
YaninoYaninoNovoe Yanino
Yanino
Yanino
Yanino
Yanino
Yanino
Yanino
Yanino
bdg 1-2
6 kv.
3,4,5,6
phase 2-6
phase 4
phase 3
phase 2-5
5…
phase 2…
Developer
District
Sellable
area, sq m
Dal’piterstroy
Krasnogvardeisky
185,000
Teorema
Krasnogvardeisky
150,000
Renovatsia SPb
Krasnogvardeisky
146,444
Okhtinskoye
Krasnogvardeisky
11,467
Garant
Development
Vsevolozhsky LO
26,100
Glavstroikompleks
Vsevolozhsky LO
33,480
KVS
Lenstroitrest
Lenstroitrest
Normann
Patriot-Neva
SU-155
CDS
Vsevolozhsky LO
Vsevolozhsky LO
Vsevolozhsky LO
Vsevolozhsky LO
Vsevolozhsky LO
Vsevolozhsky LO
Vsevolozhsky LO
Total:
376,645
89,667
92,946
90,277
200,000
525,848
91,229
2,019,103
Rival projects are comparable with the analyzed Project by their location and transport accessibility. All are
being built in the new residential development area with a limited amount of social and commercial
infrastructure. A significant role is played by the difficult transport accessibility to the new neighborhoods. An
important factor to be taken into account in launching projects is the difficult transport accessibility to the
Kovalevo settlement, due to high workload of Ryabovskoye highway. The Customer's plans for construction of
tram lines to the new neighborhood could have a positive effect on demand.
Page 295
Availability and
The average price in comparable complexes varies from 63 thous. rub./sq m in units without finishing to 73
thous. rub./sq m fully finished.
Thus the average price of sq m accounts 67 thous. rub. in competitive
projects. . If several phases of a project are considered, there is a dependence of the price upon the readiness,
ranging from 4 to 8% in different objects.
Finishing
Aver. price,
rub./sq m
Aver. rate of
sales, pcs/
quarter
Aver. price, 1
pkg sp., mn
rub.
bdg 17
none
92,395
22
800,000
absent
k.1,2
none/mixed
99,182
45
990,732
162,744
Stereos
full
71,273
109
not on sale
not on sale
Stereos
full
68,077
109
not on sale
not on sale
full
82,634
32
open parking
absent
Residence
Building
Zhernovka
N’yu-Ton
Aver. price of
commerc.,
rub./sq m
full
74,786
32
open parking
87,411
Brusnichny
2 phase-k.
1,2,3
2 phase-k.
4,5,6,7
1
none
60,190
30
open parking
absent
Brusnichny
2
none
61,000
30
open parking
absent
Brusnichny
3
none
59,529
30
open parking
absent
Novoe Yanino
none
65,649
94
open parking
115,200
Novoe Yanino
none
60,564
84
open parking
115,200
Novoe Yanino
Yaninsky
Kaskad-1
Yaninsky
Kaskad-2
Yaninsky
Kaskad-3
Yaninsky
Kaskad-4
Yarkiy
none
60,623
109
open parking
absent
1
none
59,700
45
open parking
not on sale
2
none
56,300
45
open parking
not on sale
3
none
56,000
45
open parking
not on sale
4
none
52,700
45
open parking
not on sale
k. ,
none
57,037
103
open parking
96,586
Yasno.Yanino
7.1-7.7
full
61,901
112
390,000
105,909
Raduzhny
6 kv. 7,2
full
55,206
55
open parking
not on sale
Raduzhny
Yuzhnaya
Polyana
Yuzhnaya
Polyana
6 kv. 1,6
full
60,050
55
open parking
not on sale
bdg 5
none
56,263
15
open parking
for rent
bdg 4
none
54,809
15
open parking
for rent
Jaanila country
Jaanila country
High sales rates are recorded in complexes by big developers, such as: CDS, Normann, KVS, where average sales
speed may reach 100 units in a quarter. From the standpoint of a buyer, a developer's reputation plays an
important role in choosing an apartment. A developer’s reputation in mass segment is based upon the number
of houses built and commissioned according to declared schedule.
Page 296
The average quarterly sales rate in comparable complexes of the location is around 55 apartments.
Page 297
Residential market overview of Moscow
Supply
In Q4 2015 the volume of supply in the market of residential buildings (excluding apartments) amounted to
about 1.9 million sq. m (approximately 27,100 flats in 289 buildings), which is almost 32% more than at the end
of the 3rd quarter of this year. Compared to the same period of 2014 there is an increase of almost 60%.
The volume of supply including the apartments is at the level of 2.6 million sq. m, which is 24% higher than in
the previous period and 44% higher compared to the end of 2014.
Chart 28. Supply volume dynamics, thous. sq m
Supply volume dynamics, thousand sq m
2000
1500
1000
500
0
Supply volume, thousand sq m
Source: Blackwood
At the end of Q4 2015 significant changes in the structure of the supply by classes is observed. Due to release
of a large number of new projects comfort-class share in this segment exceeded a half of total supply, and
constituted 52.5%. Compared to Q4 2014, this indicator is higher by almost 20 percentage points. The share of
the business class, which prevailed in the market for a long time, fell to 27.9% (-7.5 percentage points compared
to the previous period). Compared to the end of 2014, a decrease of more substantial - about 21 percentage
points. The share of new elite buildings decreased to 8.3% (-3 percentage points compared to the previous
period and -6 percentage points compared to December 2014). Economy class segment, which accounted for
11.3% has least suffered from the change with respect to Q3 2015 (-1.3 percentage points), and compared to
December 2014, its share has grown more significantly, by 8 percentage points.
The largest volume of new supply in Q4 2015 was recorded in the segment of the comfort class. Among the
new projects is to provide the most noticeable are residential complex "Zolotaya Zvezda", "Domashny",
“Rodnoy gorod. Octyabrskoe pole", "Rodnoy gorod. Kakhovskaya”, “Perovsky”, “Green Park”, ”Dushinskaya, 18"
and other. The total volume of new supply in the comfort class segment in Q4 2015 was app. 270 thousand sq.
m.
Among the business-class projects, which have filled up a supply in the 4Q 2015, it is worth noticing a new
building within the residential complex "Zilart", as well as a residential complex "Saturday", "Vander park" and
Page 298
"Veresaeva, 11". The total volume of new supply in the business-class segment amounted to about 28 thousand
sq. m.
About 45 thousand sq. m entered the market in the economy class segment, including residential complex
"Kvartaly 21/19", as well as residential complexes "On Bazovskoy" and "Nekrasovka".
Chart 29. Supply by class, %
The structure of supply in the primary market of residential buildings (excluding
apartments) in "old" Moscow, December 2015
Central AD
Western AD
Southern AD
South-Western AD
South-Eastern AD
Eastern AD
North-Western AD
Zelenograd
Northern AD
North-Eastern AD
7%
11%
3%
11%
11%
15%
14%
10%
12%
6%
Source: Blackwood
Share of apartments continues its decline (4.5 percentage points), share of fitted-out apartments offered for
sale (by 3.5 percentage points) in the total volume of active offer.
Chart 30. Supply structure transformation
Apartments and residential units
January 2015
24,1%
75,9%
apartment units
residential units
December 2015
19,6%
0%
80,4%
20%
40%
60%
80%
100%
Source: http://www.1rre.ru/
Page 299
Fit out vs. shell-and-core
January 2015
23,4%
76,6%
Fit out
Shell & Core
December 2015
26,9%
0%
20%
73,1%
40%
60%
80%
100%
Source: http://www.1rre.ru/
There is a trend of reduction of the average size of the apartment. The average area of the lot declined in 2015
from 68.3 to 63.9 sq m (excluding elite real estate). The structure of the proposal the proportion of 1-2bedroom apartments and studios reached almost 80% (for the year grew by 5.3 percentage points). According
to the parameters of the average area and number of rooms in a Moscow apartment building is now close to
the Soviet housing stock.
Chart 31. Supply structure transformation on Moscow primary market, January to December 2015
January 2015; 6,8%
December 2015;
4,5%
January 2015;
19,9%
December 2015;
17,0%
January 2015;
38,1%
December 2015;
41,4%
December 2015;
37,1%
January 2015;
35,2%
percentage of 1room residential
units
units
units
units
Page 300
Chart 32. Weighted average prices, thousand rubles per sq m
250
200
150
100
50
dec.11
feb.12
apr.12
jun.12
aug.12
oct.12
dec.12
feb.13
apr.13
jun.13
aug.13
oct.13
dec.13
feb.14
apr.14
jun.14
aug.14
oct.14
dec.14
feb.15
apr.15
jun.15
sep.15
nov.15
0
Weighted average prices, thousand rubles per sq m
Demand
The fall of the main socio-economic indicators naturally led to a decrease of consumer demand in the primary
residential real estate market. According to Moscow's Russian State Register, the number of registered
contracts equity participation in the building in 2015 decreased by 18.4% and amounted to 19.6 thousand units.
The number of registered transactions involving mortgage according to the same agency was 33.1 thousand
units, which is 23.4% lower with respect to 2014.
Among the factors that contributed to a drop in demand are:
Falling incomes,
High level of amounts due by population,
Deferred demand anticipation of lower prices on the market,
Reduction of mortgage loans.
According to the Central Bank of the Russian Federation the number of mortgage housing loans for the period
from January to November in Moscow fell by 45% in quantity and 46% in monetary terms. The state program
on subsidizing mortgage rates supported the primary housing market, preventing its further downfall.
As of the end of November, the weighted average mortgage rate in Moscow was established at the level of
13.43%. For comparison, in December 2014 it amounted to 12.45%.
Page 301
Chart 33. Monthly percentage dynamics of mortgage and direct selling deals, Moscow primary market,
2015
100%
90%
15%
26%
29%
19%
27%
38%
80%
37%
35%
46%
45%
46%
70%
51%
60%
mortgage
direct…
50%
74%
71%
81%
73%
62%
30%
63%
65%
54%
55%
54%
November
85%
October
40%
20%
49%
December
September
August
July
June
May
April
March
Febrary
0%
January
10%
There is a tendency of decrease in the average area of apartments sold. In 2012, the average area of sold
apartments in Moscow was 80 sq m and in 2015 it was 62.4 sq m. The tendency is observed in all types of
residential market.
Chart 34. Average sold units area dynamics, oscow and new Moscow, 2010-2015
100
90
80
Moscow
70
Moscow (new
borders)
60
50
2010
2011
2012
2013
2014
2015
Page 302
The buyers’ profile has changed. In the absence of a visible market price growth it took many so-called
investors left the market. Stagnation in the labor market has led to a decrease in migration flows to Moscow,
which has led to a reduced demand from buyers from the regions.
Commercial Terms
The weighted average bid price on the primary market at the end of the 4Q 2015 amounted to 182,053 rubles
per sq. m (excluding the elite segment and apartments). Compared to the previous period, the decrease of 3%
is registered. Compared to the end of 2014 a decrease is more substantial and constitutes about 16%. Dollar
equivalent to the weighted average prices are at $2,571 per sq. m. The decrease compared to December 2014
amounted to about 34% (growth of the dollar during this period was more than 25%).
Average offer prices in the primary market, depending on the class in Q4 2015 were fixed at the following level
(approximately):
Economy class 130,000 rubles per sq. m;
Comfort class 156,000 rubles per sq. m;
Business class 250,000 rubles per sq. m.
The change in the market prices of new buildings in the 4Q 2015 due to a significant change in the structure of
the Supply in connection with the release of a large number of new projects, as well as in connection with the
leaching of the most liquid offers in terms of reduced demand.
Due to the significant increase in the share of comfort class segment as a whole, the average price proposals in
the primary market has declined. At the same time the average indicators segment by segment showed
different indicator dynamics.
Compared to the 3Q of 2015 the average offer price in the segment of comfort class remained at the same
level; but as compared with the end of 2014 the decline was about 5.5%.
Business class for the quarter gained 1.5%; but compared to December 2014 there is a decrease of 2.9%.
In the segment of economy-class in comparison with the previous period marked by growth of 10.2%, however,
with respect to December 2014 there is a decrease of 26%.
In general, it is worth noticing that in the 4Q 2015, the majority of developers offered discounts and various,
and transaction prices in most cases, were below the offer prices.
The highest level of average prices in the boundaries of the "old" Moscow (excluding the elite segment) are
traditionally recorded in the Central Administrative District (344,200 rubles per sq m), as where there is no
supply of new buildings of economy and comfort class.
The lowest prices are in Zelenograd (81,500 rubles per sq m) and South-East districts (142,500 rubles per sq m).
That is due to significant supply of economy- and comfort class "Zhemchuzhina Zelenograda", residential
complex "Zeleny Bor" and residential complex "Nekrasovka".
Trends and Forecasts
This year was marked by the economic downturn. The decline in energy prices, as well as raising the key rate of
the Central Bank of Russia (CBR) negatively affected the business and investment activity in the country.
Page 303
According to the Federal State Statistics Service in January-November 2015 industrial production in the country
decreased by 3.3% compared to the same period last year.
Investments in fixed assets have decreased by 5.5%. The volume of construction works for 11 months showed a
decline of 9.9%.
The deterioration of the macroeconomic situation has led to a reduction in the number of employees in
companies and reduction the level of salaries. The total number of unemployed in January-November 2015
increased by 7.2%. In comparison, for the entire 2014 there was a reduction of unemployed by 5.2%. Average
monthly real wages decreased by 9.2% (compared to 1.3% growth in 2014). This is the strongest reduction in
accrued salaries since 1999.
According to "Romir" research holding in autumn 2015, employees downsizing faced 39% of Russian
companies. Reduction of salaries recorded in every fourth (26%) Russian company, in every tenth (11%) there
was a cut or complete cancelation of benefits package. According to experts, these indicators were better
during the crisis of 2008-2009.
Reducing income of the population naturally led to a reduction in the level of consumption in the country.
Retail sales in the 11 months of 2015 fell by 9.3%, paid services by 1.9%.
Reduced incomes, on the one hand, and increasing rates on loans led to a fall in lending to households. The
volume of loans to individuals, according to the Russian Central Bank decreased by 34.6%. According to the
National Agency credit about 18% of borrowers have a late payment on the loan for 60 days or more.
According to the latest estimates of the Ministry of Economic Development decline in GDP in 2015 will be about
3.7%.
According to the ministry forecast in 2016 it expected GDP growth of 0.7%. However, such growth is possible if
the average oil price is at the level of $50 per barrel.
Thus, the forecast for 2016 is unfavorable. This will inevitably affect the real estate market as one of sectors of
the economy.
Despite the economic crisis, the number of new projects in the "old" Moscow has increased significantly.
Investment costs that were made in previous years, have forced developers to bring new projects to the market,
despite the decline in consumer demand. As a result, the level of competition in the market has increased.
In the area of housing policy it is worth noting the important changes that are planned to the law FZ-214 "On
Participation in joint construction ...". They suggest a binding equity builder to the price of new housing under
the contracts of share participation, the creation of a single register of real estate developers and the
introduction of an alternative mechanism for ensuring the rights of shareholders - the placement of funds of
participants of shared construction on escrow accounts in banks. Adoption of amendments can contribute to
the growth of the construction cost, the price of apartments, as well as the withdrawal from the market of small
construction companies.
Thus, given the projected external and internal factors affecting the development of the residential real estate
market, we can talk about the stage of the crisis on the market, which is reflected in the decrease in the number
of transactions, the level of prices.
Page 304
As of December 2015 a decrease of prices in "old" Moscow is observed, but so far it has not become a mass
trend. The main impact to reduction of the prices was caused by change in the structure of supply, such as
increase of supply on early development stages. Although price stability starting from September 2015 a veiled
price declines can be noted. Developers have begun to provide a variety of promotions and discounts, which
lasted until the end of the year. Discounts size ranged from 3 to 20% and an average of 10-15%. In addition to
direct discounts developers offer individual terms of the acquisition.
In 2016 the market price increase is not expected, on the contrary, developers will be forced to reduce asking
prices in order to stimulate the sale of apartments. This applies to just put into operation residential complexes.
Groth of the prices in projects under construction is possible and it will be associated with the stage of
construction readiness.
Ministry of Finance has extended the program to subsidize mortgage rates till May 2016. This is a positive
impact on the primary housing market, keeping it from falling further. Upon completion of the program a
decline in the number of transactions on the market may occur. Based on the background of the unfavorable
macroeconomic situation the level of consumer demand on the primary housing market of the "old" Moscow
will continue to decline.
Page 305
Rival projects in the immediate neighborhood. Analysis of competitive environment changing perspectives
Table 55. The list of existing competitors in the zone of influence of “Noviy Balchug” apartment complex
Residential
complex
Type
of the
premi
ses
Wine House
Flats
57, Sadovnicheskaya St,
Moskva
Balchug
Viewpoint
Balchug
Residence
Apart
ments
Apart
ments
3,5,7 Sadovnicheskaya
emb., Moscow
31, Sadovnicheskaya
street, Moscow
Address
Developer
GALSDevelopm
ent
AO
“INTECO”
AO
“INTECO
Date of
commission
ing
Average area of flats, sq m
Fitting
out
Class
Number
of flats
one-room
flats
threeroom flats
two-room
flats
Asking price, RUR per sq m
threetwothreeroom
room
room
flats
flats
flats
Completed
Shell&core
Elite
205
67-117
62-125
56-149
471,000
n/d
471,000
IIIQ 2016
Shell&core
Elite
116
58
64-158
120-262
489,160
500,600
489,160
IIIQ 2016
Shell&core
Elite
107
53-221
81-105
123-182
464,800
471,300
464,800
Table 56. The list of existing competitors in the zone of influence of “Leningradskoye Shosse” residential complex
Residential
complex
Type
of
the
pre
mise
s
Mayakovsky
Flats
10, Golovinskoye Hw,
Moscow
Bely Park 2
Flats
9, Belomorskaya Str.,
Moscow
Nevsky
Flats
10 b1. Admirala makarova
Str., Moscow
Average area, sq m
Address
Developer
TEKTA
group
Best
Novostroy,
TsentrInve
st
Krost
Date of
commission
ing
Fitting
out
Class
Number
of flats
oneroom
flats
tworoom
flats
threeroom flats
oneroom
flats
tworoom
flats
threeroom
flats
4Q2018
Shell&core
Econom
1092
45
62
85
156,335
163,000
155,000
Completed
Fitted-out
Econom
328
45-53
70-85
94-104
193,000
180,000
171,237
4Q2016
Shell&core
Comfort
484
29-36
40-50
57-82
190,000
190,000
190,000
Page 306
Table 57. The list of existing competitors in the zone of influence of “Donskoy Olimp” residential complex
Residential
complex
Type
of
the
pre
mise
s
Dom na
Samarinskoy
Flats
4, 2-aya Samarinskaya
Str., Moscow
Sky House
Flats
40, Mytnaya Str., Moscow
Zhiloy
Kvartal I'M
Angliysky
Kvartal
Dom na
Serpukhovsk
om Valu
Flats
Flats
Flats
Average area, sq m
Address
4, Kozhevnetchesky
proezd, Moscow
7 b. 1, Mytnaya Str.,
Moscow
20, Serpukhovskoy Val,
Moscow
Date of
commission
ing
Fitting
out
Class
Number
of flats
oneroom
flats
tworoom
flats
threeroom flats
oneroom
flats
tworoom
flats
threeroom
flats
1Q2016
Shell&core
Business
73
40-43
55-68
87-133
333,850
329,700
300,000
2Q2016
Shell&core
Business
539
53-69
97-155
127-172
322,232
282,306
281,882
PSN group
4Q2018
Shell&core
Business
200
32-46
46-79
89-134
335,141
337,415
327,231
PIK,
StrabagSe
Completed
Shell&core
Business
949
43-64
73-127
109-126
458,716
468,750
409,295
Lider
Invest
1Q2017
Shell&core
Business
/Premiu
m
38
56
75
112
250,000
240,000
225,000
Developer
Lider
Invest
Bestkon,
MosCityGr
oup
Page 307
Table 58. The list of existing competitors in the zone of influence of “Grunvald” residential complex
Residential
complex
Type
of
the
pre
mise
s
Fort
Skolkovo
Flats
Residentsya
Skolkovo
Flats
Russky
Avangard
Flats
Akademgoro
dok
Flats
Dom na
Tikhoy
Flats
Average area, sq m
Address
Kashtanovaya/Berezovaya
Str., Zarechye,
Odintsovsky district,
Moscow region
Kashtanovaya
Str.,Zarechye, Odintsovsky
district, Moscow region
Tikhaya Str.,Zarechye,
Moscow region
26 b. 4, Tikhaya
Str.,Zarechye, Odintsovsky
district, Moscow region
17, Tikhaya Str.,Zarechye,
Moscow region
Developer
Date of
commission
ing
GK
Absolut
Fitting
out
Class
Number
of flats
oneroom
flats
tworoom
flats
threeroom flats
oneroom
flats
tworoom
flats
threeroom
flats
Completed
Shell&core
Business
156
42-53
71-80
95-139
145,414
146,250
146,250
Zarechie
Completed
Shell&core
Business
614
39-51
62-83
82-105
167,553
121,446
n/a
ZhilInvest
XXI
Completed
Shell&core
Business
/
Premium
80
n/a
n/a
218-503
n/a
n/a
200,000
Bestkon
Completed
Shell&core
Business
180
43
n/a
106
162,000
136,364
134,930
ZhilInvest
XXI
2Q2016
Shell&core
Business
54
82
n/a
220
n/a
244,970
210,058
Page 308
Table 59. The list of existing competitors in the zone of influence of “ZILART” residential complex
Residential
complex
Type
of
the
pre
mise
s
Dom na
Samarinskoy
Flats
4, 2-aya Samarinskaya
Str., Moscow
River Park
Flats
7, Rechnikov Str., Moscow
V-House
Flats
Dom na
Nagatinskoy
Flats
AFI
Residence
Flats
/Apa
rtme
nts
Average area, sq m
Address
Developer
16 b.5-6, Elektrolitny
proezd, Moscow
14 b.2, 1-y Nagatinsky
proezd, Moscow
Lider
Invest
AEON
Corporatio
n,
FerroStroy
Vedis
group
Lider
Invest
8, Paveletskaya Emb.,
Moscow
AFIDevelo
pment
Date of
commission
ing
Fitting
out
Class
Number
of flats
oneroom
flats
tworoom
flats
threeroom flats
oneroom
flats
tworoom
flats
threeroom
flats
1Q2016
Shell&core
Business
73
40-43
60-68
87-133
333,850
329,700
300,000
2Q2016
Shell&core
Comfort
648
39
57
80
196,000
205,500
197,3000
1Q2017
Shell&core
Business
304
50
75
103
190,000
212,664
206,487
4Q2016
Shell&core
Comfort
259
42
62
96
196,400
193,000
197,000
4Q20172019
Shell&core
Business
546
57
87
115
170,090
170,039
164,057
Page 309
Table 60. The list of existing competitors in the zone of influence of “Luchi” residential complex
Residential
complex
RC
"Tat'yanin
park"
Type
of
the
pre
mise
s
Flats
RC
"Rasskazovo
"
Flats
RC
"Meschersky
les"
Flats
RK "V
Solntsevo"
Flats
Average area, sq m
Address
Govorovo village,
Novomoskovsky
administrative district,
Moscow
Vnukovskoe rural
settlement,
Novomoskovsky
Moscow
2 bld, Borovskoe Hw,
Zapadny administrative
district, Moscow
5 Aviatorov St., Moscow
Developer
Date of
commission
ing
Fitting
out
Class
Number
of flats
GK Mits
Completed
(1 ph)/1Q2Q 2016 (2,3
ph)/ 4Q
2016 (3 ph)/
1Q 2017 (6
ph)
Shell&core
Comfort
Sezar
Group
4Q 2016 (1
ph)/ 4Q
2017 (2 ph)
Shell&core
GK PIK
4Q 2017
Moscow
Fiscal
Enterprise
"Upravleni
e
grazhdans
kogo
stroitelstva
"
Completed
oneroom
flats
tworoom
flats
threeroom flats
oneroom
flats
tworoom
flats
threeroom
flats
10332
39,9362,66
62,8-97
100,96133,94
132,850
135,850
130,850
Comfort
1203
37.5-45
54.2-70
87-99.4
140,895
141,653
134,150
Shell&core
Comfort
263
22-47
45-70
85-94
127,006
102,900
89,167
Shell&core
Econom
640
37-38
50-61
73-76
136,995
121,783
112,645
Page 310
Table 61. The list of existing competitors in the zone of influence of “Ibitsa” residential complex
Residential
complex
Type
of
the
pre
mise
s
Average area, sq m
Address
Bachurino village,
Sosenskoe rural
settlement,
Novomoskovsky
Moscow
Nikolo-Khovanskaya
Str.,Gazoprovod
Settlement, Moscow
Developer
Date of
commission
ing
A 101
Developm
ent
Fitting
out
Class
Number
of flats
oneroom
flats
tworoom
flats
threeroom flats
oneroom
flats
tworoom
flats
threeroom
flats
Q3 2016
Fitting out
Comfort
4643
41.7-45.1
63-77.6
77.3-125.5
131,800
121,200
95,200
Sezar
Group
Completed
Shell&core
Comfort
1630
34.4-52.7
55-71.4
77-92
145,000
157,263
145,000
RC "Moscow
101"
Flats
RC "Nikolin
Park"
Flats
RC "Legenda
18"
Flats
Kommunarka community,
Moscow
K-Region
Q1 2016
Shell&core
Business
/Comfor
t
928
27-29.4
40.5-77.6
71.4-72.3
113,000
98,000
111,000
Flats
Moscow
Avgur
Estate
Q3 2018
Shell&core
Comfort
451
30-49.1
56.4-69.3
82-104.4
89,000
91,200
76,200
Flats
Gazoprovod community,
Moscow
Krost
O1 2017
Shell&core
Comfort
889
21-30
30-47
42-49
130,000
104,550
112,000
Flats
Moscow
MITSFinance
Completed
Shell&core
Econom
958
32-48
66-69
98.4-102
152,778
151,515
117,117
RC
"Ispanskie
kvartaly"
RC "Novaya
Zvezda"
RC
"Kommunark
a 14"
Page 311
Table 62. The list of existing competitors in the zone of influence of “Nakhabino Yasnoe” residential complex
Residential
complex
Type
of the
premi
ses
Skazka
Flats
NakhabinoSkver
Flats
Pavlovskiy
kvartal
Flats
Address
9, Krasnaya street,
s. Pavlovaskaya Sloboda,
Istrinskiy district,
Moscovskaya oblast
s. Isakovo, Istrinskiy
district, Moscovskaya
oblast
Novaya street,
s. Lobanovo, PavlovoSlobodskoe, Istrinskiy
oblast
oneonethreeroom
room
room flats
flats
flats
onetwothreeroom
room
room
flats
flats
flats
Developer
Date of
commission
ing
OOO
“Magi”
IVQ 2016
Shell&core
Comfort
382
42-50
55-78
78-118
93,500
84,000
89,000
IskaNedvozhi
mist
Completed
Shell&core
Comfort
1,109
37-40
58-60
72-81
73,150
68,970
63,745
OPIN
Completed
Shell&core
Comfort
1,500
38-48
59-73
79-97
82,680
68,340
78,290
Fitting
out
Class
Number
of flats
Table 63. The list of existing competitors in the zone of influence of “Novoe Domodedovo” residential complex
Residential
complex
Type
of the
premi
ses
Address
Bolshoe
Domodedovo
Flats
Vostryakovo microdistrict, Domodedovo,
Moscovskaya oblast
Gorod
Shastya
Flats
Vostryakovo microdistrict, Domodedovo,
Moscovskaya oblast
Evropeiskiy
Flats
Zapadniy micro-district,
Domodedovo,
Moscovskaya oblast
Developer
OOO
“Lider
Group
Domoded
ovo”
OOO
“Lider
Group
Domoded
ovo”
Stroyteks
Date of
commission
ing
Fitting
out
Class
IQ 2016
Shell&core
Comfort
IIQ 2016
Shell&core
Comfort
Completed
Fully fitted
out
Comfort
Number
of flats
onethreethreeroom
room flats room flats
flats
onetwothreeroom
room
room
flats
flats
flats
24-46
51-68
73-80
54,000
53,000
48,500
382
24-40
50-57
66-76
64,500
58,500
58,500
1,032
43-48
59-72
85-89
95,000
90,000
76,000
Page 312
Residential
complex
Type
of the
premi
ses
Lunniy
Flats
Address
Zapadniy micro-district,
Domodedovo,
Moscovskaya oblast
Developer
Date of
commission
ing
OOO
“SMR
Sroy”
IVQ 2016
Fitting
out
Class
Shell&core
Comfort
Number
of flats
393
onethreethreeroom
room flats room flats
flats
44
60-71
90-98
onetwothreeroom
room
room
flats
flats
flats
79,650
73,300
67,000
Table 64. The list of existing competitors in the zone of influence of “Podolsk-Erino” residential complex
Residential
complex
Type
of the
premi
ses
Simpheropol
skiy
Flats
Vesenniy
Flats
Polivanovo
Flats
L’vovskiy
Flats
V poselke
Fabriki 1
Maya
Flats
Address
Micro-district Vesenniy,
s. Sosnoviy Bor,
Podolskiy district,
Moscovskaya oblast
s. Bykovo, Podolskiy
oblast
s. Polivanovo, Podolskiy
oblast
s. L’vovskiy, Podolskiy
oblast
s. L’vovskiy, Podolskiy
oblast
onethreetwo-room
room
room flats
flats
flats
threetwothreeroom
room
room
flats
flats
flats
Developer
Date of
commission
ing
Podolskiy
DSC
IQ 2016
Shell&core
Econom
173
35-43
54-60
78-79
57,260
69,450
57,260
FSK
“Razvitie”
IQ 2016
Shell&core
Econom
1,402
38-47
57-68
79-120
54,000
59,500
54,000
IQ 2016
Shell&core
Econom
272
18-47
33-54
92-111
n/d
52,450
n/d
IQ2016
Shell&core
Econom
288
35-65
62-67
84
n/d
74,000
n/d
IQ 2016
Shell&core
Econom
83
43-48
64-76
86-93
65,000
65,000
65,000
OOO
“Consultin
g
company
Podmosko
v’e”
Group of
companies
“PZHI”
Glavgrado
stroy
Fitting
out
Class
Number
of flats
Page 313
Residential market overview of Yekaterinburg
Supply
Yekaterinburg market of residential real estate under construction was characterized by stable supply in the
post-crisis period of 2008-2011. At the same time there was a significant number of "frozen" projects. Active
new construction has started since 2012, both by reducing the amount of suspended construction projects, as
well as by the new projects launching.
Market volume of residential real estate under construction was about 2.6 mn sq m in Yekaterinburg at the end
of 2015 (gross building area residential complexes on sale).
Chart 35. Gross building area of housing under construction in Yekaterinburg, mn sq m
Professional participants of Yekaterinburg real estate market divide the city into 5 price zones depending on the
distance from the center. Each zone includes several city districts. The districts are distributed by price zones as
follows:
The Downtown (the Center, the Central area), limited by Moskovskaya St., Chelyuskintsev St.,
Vostochnaya St., Dekabristov St., Lunacharskogo St. and Bol’shakova St.;
Zone 1, embracing neighborhoods of Avtovokzal (Bus Station), Botanichesky, VIZ (Upper Iset’
Metallurgical Plant), Vokzal’ny, VTUZgorodok, Zarechny, Parkoviy, Pionersky, Shartashsky Rynok
(Shartash Market) and Yugo-Zapadny (South-Western);
Zone 2, including Akademichesky, ZhBI (Concrete Factory), Zavokzal’ny, Novaya Sortirovka, Sibirsky,
Siniye Kamni (Blue Stones), Uktus, Uralmash, Shirokaya Rechka (Broad River) and El’mash;
Zone 3, comprising Elizavet, Kompressorny (Compressor), Lechebny, North Sortirovka, Sovkhoz, UNC
(Ural Scientific Center), Khimmash and Chermet;
Zone 4, comprizing Verkhnemakarovo, Gorny Schit (Mountain Shield), Izoplit, Istok, Kalinovsky,
Kol’tsovo, Medniy, Nizhne-Isetsky, Palkino, Ptitsefabrika (Poultry Farm), Pyshma, Rudny, Sadovy,
Page 314
Severka, Sem’ Klyuchey (Seven Springs), Chusovskoye Ozero (Chusovskoye Lake), Shabrovsky, Shartash
and Shuvakish.
Map 19. Division of the city by the price zones
Main housing construction is carried out in two locations, in Zone 1 and in Zone 2 – 72% of the total volume of
housing under development in Yekaterinburg. This figure remained stable during the last year, but the ratio of
locations has altered. Yet in 2014 the most active construction took place in the zone 2, and then zone 1 took
the leadership in 2015. The share of the Central area accounts for about 7% of the market.
Avtovokzal (Bus Station) and VIZ (Upper Iset’ Metallurgical Plant) neighborhoods are the leaders by the amount
of housing under construction, that is ca. 600 thous. sq m in total.
Page 315
Chart 36. Distribution of housing under construction of Yekaterinburg by price zones, %
A steady growth of housing put into operation was recorded in Yekaterinburg starting in 2013. At the same
time the pace of launching new objects began to decline. As a result, the amount of residential space entering
the market has reduced by 42% in 2015, compared to that already commissioned.
Chart 37. Comparison of residential real estate volumes that entered the market to that put into
operation
put into operation, mn sq m
excess of the new supply above the commissioned, %
Page 316
The ratio of the supply already commissioned and the new supply is reflected in the distribution of
Yekaterinburg developers by volumes of housing put into operation in the last 6 years, as well as by the number
of projects under realization.
Since 2009, 44% of the housing was put into operation by the three companies: AtomStroyKomplex, Kortros
(integrated development project of “Akademichesky”) and “LSR. Nedvizhimost’-Ural”.
Chart 38. Rating of developers by housing put into exploitation, %
As of 2015, AtomStroyKomplex, GK ASTRA, UralEnergoStroyKomplex and “LSR. Nedvizhimost’-Ural” were the
key players in Yekaterinburg residential real estate market, which in aggregate build 39% of residential
complexes in the city.
Page 317
Chart 39. Rating of developers by number of residential objects on sale, %
Demand
The level of demand in 2015 one can describe as low, below the stable 2013 by performance. The amount of
deals in Yekaterinburg primary market has reduced by 43% compared to an excessive 2014, accounting 16
thous. of residential units or 640 thous. sq m.
Chart 40. Sales dynamics in Yekaterinburg primary residential market
Page 318
To analyze the Projects, qualitative parameters of demand were considered depending on the buyers'
requirements, depending in their turn on the class of housing. Regarding the classification of the housing
market, one should note that today there is no uniform standard classification and the criteria approved by the
legislation, which would give a clear division of property in the Russian Federation by classes. Each region has
its own specificity. As a consequence, there is no clear evaluation of the object parameters to assign it to a
particular segment of the housing market. In the research, an expert has determined the class of a property by
the classification adopted in Knight Frank company, given the basic criteria:
location (district)
proximity to big thoroughfares and transport hubs (for determining the degree of comfort for
residents)
social status of residents
structural and technical, architectural and planning characteristics of the house
the number of units in the house and on the floor
minimal area of an apartment
the quality of construction and finishing materials
engineering
availability of adjacent territory, parking and the number of parking spaces per apartment
infrastructure (kindergarten, school, stores)
professional building management
Principal requirements:
Buyers of mass demand housing are mainly focused at:
transport accessibility (proximity to the stopping points, ability to get to the city center);
developed infrastructure (availability of kindergartens, schools, food stores);
"turnkey" finishing (no additional costs for finishing premises);
minimal footage of units (1-room - from 30 sq m, 2-room - from 45 sq m, 3-room - from 65 sq m; no
overpayment for corridors, balconies and loggias);
location (this group of consumers is less likely to move and is more inclined to stay in the area of
residence).
Relevant buying schemes for this group of customers are as follows:
secondary housing in offset when paying for an apartment
payment in installments
mortgage
Buyers of business-class housing pay special attention to the following features:
location of the house;
proximity to transport interchanges, local city centers, shopping centers;
quality fit-out of an apartment;
Page 319
open or underground parking available;
well-maintained house territory, playground, bicycle stands and professional property management
company;
convenient apartment layouts, availability of auxiliary rooms and balconies.
Buyers of elite housing pay special attention to the following features:
multi-system protection, private territory;
the object appearance - number of floors, design of adjoining territory and of in-house spaces;
adjoining the house and nearby infrastructure;
comfortable and safe parking, underground parking with car wash;
ceiling height over 3 m;
duplex apartments and penthouses;
professional management company.
Sales show general trends, common for the market:
During periods of strong demand, regardless of the project characteristics the sales were at a high level
until 2015.
The main reasons for the decline in demand in the past year were: an expensive mortgage, reducing the
proportion of the solvent population, withdrawal of private investors from the market.
The decline in demand for primary housing market affected the construction activity. The rate of doing
work has considerably decreased on many construction sites in late 2015.
The deal, under which funding is derived from the sale of apartment in the secondary market make a
significant part of the market demand. The strong reduction in demand against the background of
significant increase in supply in the secondary market, have an indirect effect on the primary market.
Only a decrease in supply price could support the market in 2016.
Commercial Terms
Over the last 5 years one could observe the positive dynamics of prices in the primary market of Yekaterinburg.
A marked increase in prices for housing under construction has occurred against the background of the sales
surge in 2014. However, the market began to change due to changes in the economic situation. In the IV
quarter of 2015 one could observe a decrease in average asking price due to a variety of marketing campaigns,
organized by developers. However, the annual dynamics of the average price index still kept a positive trend
and stood at 3%. The average price of housing under construction in Yekaterinburg was 67.5 thous. rub./sq m
at the end of December 2015.
Page 320
Chart 41. Dynamics of the average price for housing under construction in Yekaterinburg, thous.
rub./sq m
Annual dynamics of prices by Yekaterinburg locations had multidirectional trends at the end of 2015. Thus the
average price indices rose in the Center and in the Zone 2, while in other zones the average prices declined.
The highest increase in average prices was recorded in Novaya Sortirovka, ZhBI (concrete factory) and Uralmash,
while the biggest decrease occurred in Chermet and VTUZgorodok neighborhoods.
Page 321
Map 20. Average prices distributed by Yekaterinburg price zones and its annual dynamics16.
Average price of sq m in a most popular 1-room flat as of December 2015 was 70,290 rubles. In contrast to the
secondary market there was a positive trend during the year in the new construction market but the number of
projects on sale was declining.
The increase in prices one could observe for all types of apartments: for one-room flats + 3.2%, two-room flats
+ 3.1%, three-room flats + 4.1%.
Table 65. Annual changes in apartment prices during 2015
Unit type
Changes
1 room
Average price, rubles
per sq m
70,290
2 rooms
73,660
3.1%
3 rooms
69,696
4.1%
3.2%
16
The average prices are cited as of December 2015. The price dynamics is given compared to Q4 2014.
Page 322
Professional Opinion Regarding Market Development Perspectives
Active reduction in the volume of new projects entering the market can lead to a deficit of liquid supply. At the
same time the city administration is actively working to develop new spots for residential construction, mainly
due to the redevelopment of former industrial areas. However, the prospects for the development of housing
construction in Yekaterinburg are sufficiently stretched in time.
Change of the economic situation in the country, the ending of the state program to subsidize mortgage rates
in 2016 could lead to a decline in demand. Against this background, the exit of investment buyers from the
market looks quite expected. A reduction in the value of housing under construction can be the only factor
stimulating the demand in the market. As a result a reduction in the average prices in Yekaterinburg primary
market is likely, in the range of 10-15%.
Page 323
Rival projects in the immediate neighborhood. Analysis of competitive environment changing perspectives
Table 66. The list of existing competitors in the zone of influence of “Rassvetniy” residential complex
Universitetskiy
Accord
Olymp
Type of
the
17
premises
Flats
Apartments
Apartments
Bazilic
Flats
Residential complex
Address
Developer
Date of
commissioning
Fitting out
Class
41, Mira St.
Novgorodtsevoy St.
32 , 40-Letiya Komsomola
Pedagogicheskaya, Gagarina,
Vishneva, Mira streets
Pervostroitel’
Uralenegrostroykomplex
Dominvest
commissioned
15.05.2017
15.05.2016
Shell&core
Shell&core
Shell&core
Comfort+
Comfort
Comfort
Average asking price, RUR per sq m
one-room two-room
threeflats
flats
room flats
81,534
77,929
69,285
53,303
51,363
50,368
56,788
55,928
49,024
Victoria Invest
15.08.2016
Shell&core
Comfort
68,000
63,000
58,000
Table 67. The list of existing competitors in the zone of influence of “Khrustal’niye Klyuchi” residential complex
Residential complex
Type of
the
premises
Koltsovskiy Dvorik, phase 1
Flats
Koltsovskiy Dvorik, phase 2
Residential complex at
Yaskina Street
Aviator
Flats
17
Date of
commissioning
Address
Developer
Sputnikov, Aviatorov,
Raketnaya streets, Koltsovo
Diart Ural
Flats
12, Yaskina St.
Gorzhilstroy
commissioned
Shell&core
Economy
Flats
Aviatorov, Raketnaya streets
Efes
commissioned
Fully fitted out
Economy
15.11.2016
Fitting out
Class
Shell&core
Economy
15.11.2016
hereafter in the tables: ‘flats’ for residential premises, ‘apartments’ for non-residential premises
Page 324
onetwo-room
threeroom
flats
room flats
flats
60,000
52,000
46,000
60,000
not on
sale
54,200
52,000
46,000
53,471
49,105
54,222
50,750
Table 68. The list of existing competitors in the zone of influence of “Michurinskiy” residential complex
Zapadniy
Greenwood
Residential complex at Tenistaya
street
Khrustal’nogorskiy
Sukhodol’skiy
Flats
Apartments
Krasnoles’ya St.
Proninoy St.
Maksima
Alta
commissioned
01.04.2016
Fully fitted out
Fully fitted out
Economy
Economy
Average asking price, RUR per s
one-room
two-room
flats
flats
65,257
63,700
60,000
59,000
Flats
Tenistaya, Sukhodolskaya St.
AtomStroyKomplex
III quarter 2017
Fully fitted out
Economy
53,239
55,124
Flats
Flats
Savkova, Khrustal’nogorskaya St.
199, Sukhodol’skaya St.
commissioned
IV quarter 2016
Fully fitted out
Fully fitted out
Economy
Comfort
n/a
69,326
59,094
67,091
Akademicheskiy
Flats
Krasnoles’ya St.
AtomStroyKomplex
Brusnika
Kortros “Akademicheskoye
Group”
commissioned
Fully fitted out
Economy
66,349
58,217
Residential complex
Type of the
premises
Address
Developer
Date of
commissioning
Fitting out
Class
Table 69. The list of existing competitors in the zone of influence of “Rastochnaya” residential complex
Residential complex
Type of the
premises
Semitsvet, phase 1
Semitsvet, phase 2
Simphonia
Kvartet
Flats
Flats
Flats
Flats
Address
Developer
Tehnicheskaya, Druzhinina streets
Astrainveststroy
13, Kourovskaya St.
30, Manevrovaya St.
Zheldoripoteka
UIT Uralstroy
Date of
commissioning
Fitting out
Class
01.01.2016
01.04.2017
01.10.2016
01.10.2016
Fully fitted out
Fully fitted out
Shell&core
Shell&core
Economy
Economy
Economy
Economy
Average asking price, RUR per
one-room
two-room
flats
flats
62,733
63,928
61,000
60,000
66,143
63,708
64,357
61,361
Table 70. The list of existing competitors in the zone of influence of “Flagman” residential complex
Residential complex
Type of the
premises
Address
Developer
Date of
commissioning
Fitting out
Class
Repin park
Regata
Bulgakov
Flats
Flats
Flats
75, Zavodskaya St.
126, Tatischeva St.
27, Tokarey St.
Aston
NKS-Development
AtomStroyKomplex
commissioned
commissioned
commissioned
Fully fitted out
Fully fitted out
Fully fitted out
Comfort
Comfort
Comfort
Page 325
Average asking price, RUR per
one-room
two-room
flats
flats
75,418
73,501
84,150
79,588
87,270
81,002
Table 71. The list of existing competitors in the zone of influence of “Shefskaya” residential complex
Alfa
Type of
the
premises
Flats
Oazis, phase 1
Flats
Oazis, phase 2
Flats
Oazis, phase 3
Flats
Residential complex
Teplichnaya street
Elektrikov street
Atlant
Address
Developer
Date of
commissioning
Tsvetochniy pereulok
Formula Stroitel’stva
15.11.2016
15.05.2016
1A, Starykh Bolshevikov St.
Sredneural’skoe
Stroitel’noe Upravleniye
15.08.2016
15.11.2016
Flats
6, Parnikovaya St.
UGMK-Holding
commissioned
Flats
5, Elektrikov St.
Efes
commissioned
Flats
3, Starykh Bolshevikov St.
Stroytek
commissioned
Fitting out
Class
Fully fitted out
Partly fitted
out
Partly fitted
out
Partly fitted
out
Economy
one-room two-room three-room
flats
flats
flats
73,085
61,147
62,158
Comfort
65,000
59,000
56,000
Comfort
65,000
59,000
56,000
Comfort
65,000
59,000
56,000
Fully fitted out
Economy
76,096
73,065
67,036
Economy
63,167
62,333
59,000
Economy
n/a
n/a
58,285
Partly fitted
out
Fully fitted out
Page 326
Appendix 4 –
Residential market segmentation according to the current
classification
Page 327
The classification of modern residential buildings supposes differentiation of projects according to the following
basic characteristics:
Location;
Areas and proportion of different types of apartments;
Parking availability and its characteristics;
Constructional type;
Number of storeys in the building;
Average apartment18 area.
We define the following classes of multi-apartment houses in the residential real estate market of SaintPetersburg:
Class A (prime) which in its turn is subdivided into 2 subclasses: A+ and A.
Class B (middle-class), which is also subdivided into 2 subclasses: higher middle-class (B+) and class B.
Class C (mass-market residential real estate), which is subdivided into 2 subclasses: higher mass-market
class and lower mass-market class residential real estate.
Table 72.Market segmentation according to the modern classification
C
Characteristics
C
(economy)
B
C+
(medium)
B (comfort)
Location
Non-central districts
Non-central
districts,
prestigious
suburbs
Constructional
type
Large Panel
System
building;
brick and
reinforced
concrete
building with
small
Brick or brick
& reinforced
concrete
building
18
Large Panel
System
building(rare
ly);
brick and
reinforced
concrete
building
A
B+ (business)
A (elite A)
A+ (elite A+)
Prestigious
zones of noncentral
districts;
embankments
outside the
borders of
historical
centre;
prestigious
suburbs
Historical centre;
embankments
with scenic
views
The most
prestigious
zones of
historical
centre
Brick or brick
& reinforced
concrete
building
Brick or brick &
reinforced
concrete
building
Brick or brick
& reinforced
concrete
building
hereafter an ‘apartment’ means a residential premise; a ‘unit’ means a residential premise or an aparthotel room/flat, literally a non-
residential premise
Page 328
C
Characteristics
Storey number
(prevailing in a
residential
complex)
Apartment
number on a
stairwell, item
Parking index,
place number
per one
apartment
B
C
(economy)
apartments
C+
(medium)
B (comfort)
A
B+ (business)
A (elite A)
Up to 12
A+ (elite A+)
Of no importance
Up to 16
Up to 9
Of no importance
Up to 7
Up to 5
Up to 4
Of no importance
From 0,5
From 0,7
From 1,1
Placing offices
and service
industries is
possible,
excluding public
catering
Mainly for
internal use
Nonresidential
premises
No requirements
No
requirements
Placing offices,
service
industries and
trade is
possible. Public
catering and
food products
are not
preferred
Usual
apartments
ratio by room
number
Studios – to
50%
1 room – to
70%
2 room – to
30%
3 room – to
15%
Studios – to
5%
1 room – 3040%
2 room – 3545%
3 room – 2035%
4 room – to 5%
Studios – 0%
1 room – to
25%
2 room – 3040%
3 room – 3545%
4 room – to
10%
Studios – 0%
1 room – to 15%
2 room – 2535%
3 room – 3550%
4 room – to 15%
Multiroom – to
2%
Studios – 0%
1 room – 0%
2 room -1525%
3 room – 4060%
4 room – 1525%
Multiroom – to
10%
From 65
From 80
From 110
From 130
Studios – to
15%
1 room – 3545%
2 room – 2535%
3 room – 1520%
Average
apartment
From 35
From 52
area, sq.m
Page 329
Appendix 5 –
Office market segmentation according to the current
classification
Page 330
Table 73.Market segmentation according to the modern classification
Class A
Class B+
Class B-
must
recommended
1. BUILDING ENGINEERING SYSTEMS
1.1. Building Management System (BMS)
must
1.2. Heating Ventilation and Air-Conditioning (HVAC)
HVAC system that provides allthe-year-round cooling, heating
and humidity control within
individual premises.
HVAC system that provides
cooling, heating and humidity
control.
must
must
Heating, Ventilation and Air
Conditioning systems.
must
Recommendation: four-pipe AC.
1.3. HVAC capacities
Capacity to provide 24-hour and all-the-year-round cooling in server rooms. Temperature in office areas:
22 C0 ± 1 C0. Fresh air supply: 60 m3 per hour per 10 m2 of office rentable space, according to planned
occupancy.
must
optional
recommended
1.4. Modern fire security system
which includes fire detection, fire alarm and fire suppression.
must
must
must
1.5. Elevators
Modern high quality speed
elevators from major
Modern elevators for 4-storey buildings and higher.
international brands.
must
must
must
recommended
recommended
1.6. Maximum waiting time of elevators
No longer than 30 seconds.
must
Recommendation: an intelligent
elevator control system to be
installed in the buildings with 20
or more floors.
1.7. Power supply
Page 331
Class A
Class B+
Class B-
Two independent sources of power supply with automatic change-over or diesel generator power supply
system as emergency backup (power supply should be a minimum 70 VA of the one-time electric load per
1 m2 effective office space), UPS for emergency systems.
must
optional
recommended
1.8. Security system
Modern security and access
Modern security and access
control systems: CCTV at all
control systems: CCTV at all
entrance points, around the
entrance points, around the
building, at parking areas,
building, at parking areas,
electronic card access, 24-hour
electronic card access, 24-hour
security personnel.
security personnel.
must
CCTV at all entrance points, 24hour security personnel. Access
control.
must
must
must
recommended
2. BUILDING STRUCTURE
2.1. Clear ceiling height: min 2.7 m and over
must
2.2. Layout
Open floor plates, efficient layout,
supporting columns. Regular
column grid: not less than 6×6.
must
Open floor plates, efficient
layout, supporting columns.
Regular column grid: not less
than 6×6.
must
Open floor plates for the whole
or more than 50% of office
rentable area, efficient layout.
recommended
Recommendation: For not less
than 90% of usable area distance
from windows to columns should
not be less than 4 m.
2.3. Floor depth
Floor depth: not more than 20 m from window to window. Not more than 10 m from window to floor
plate core and 12 m for buildings with non-regular forms and atriums.
must
optional
recommended
2.4. Loss factor
Building loss factor: not exceeding 12%. Areas are calculated according to BOMA standards.
must
must
recommended
2.5. Load bearing capacity: not less than 400 kg/m2
Page 332
Class A
Class B+
Class B-
must
optional
recommended
2.6. Fit-out of common areas and facade finishing
High quality materials used in fitout of common areas and facade
finishing.
Quality materials used in fit-out of common areas and facade
finishing.
must
must
must
2.7. Raised floors
Building is designed for full value
raised floor installation.
must
Possibility to install raised floors.
optional
recommended
2.8. Lighting & window grid
Modern high quality windows providing sufficient natural lighting.
must
must
recommended
3. LOCATION
3.1. Location
Good building location, an absence of nearby objects that can have a negative impact on a building’s
image
(e.g. functioning industrial buildings, dumps, etc.).
must
optional
recommended
3.2. Transport access
Location within not more than 15-minute walks from the nearest metro station or an adequately
organized shuttle-bus service (waiting time of about 5–15 minutes during morning and evening peak
traffic periods).
must
optional
recommended
4. PARKING
4.1. Parking type
Underground parking or covered
multilevel parking. Surface guest
Organized guarded parking.
parking.
must
must
must
4.2. Parking ratio
Page 333
Class A
Class B+
Class B-
- Within the Garden Ring: not less than 1 space per 100 m2 of leasable area (1/100).
recommended
recommended
recommended
- Between the Garden Ring and the Third Ring Road: not less than 1/80;
- Between the Third Ring Road and MKAD: not less than 1/60;
- Outside MKAD: 1/30–1/40 or more.
must
must
recommended
5. OWNERSHIP
5.1. Single ownership (the building is not sold by floors or blocks to different owners)19
must
optional
recommended
6. PROPERTY MANAGEMENT & SERVICES FOR OCCUPIERS
6.1. Property management
Professional property
management company with not
less than 5 buildings under
management (not less than
Property management company.
Organized property
management.
2
5,000 m each) or with relevant
international experience.
must
must
must
6.2. Telecom providers
No exclusive telecom provider. Potential possibility to use services of two or more independent telecom
providers.
must
must
recommended
6.3. Lobby
Efficiently organized reception area appropriate to building size, providing convenient access to the
building. Well organized waiting zone.
must
optional
recommended
6.4. Amenities
Professionally organized staff
cafeteria adequate to building
19
Staff cafeteria and other amenities in the building (ATM, newsstand,
dry-cleaning, shops, etc.). Infrastructure nearby should be considered.
Not applicable for multifunctional complexes (MFC) comprising office and retail premises or apartments
Page 334
Class A
size and population
Class B+
Class B-
must
must
At least two
more amenities in the building
(ATM, newsstand, dry-cleaning,
shops, etc.). Infrastructure nearby
should be considered.
must
7. CERTIFICATION
7.1. Certification according to one or more international environmental assessment methods for
buildings (e.g. BREEAM or LEED)
recommended
recommended
recommended
Page 335

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