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SEE INSIDE FOR THE HOTTEST REAL ESTATE IN AND AROUND MOSCOW
N° 70, December 2010
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to the neighborhood simply because of the
its central location, realtors said, though
on a far smaller scale than in development hotbeds such as Ostozhenka, mostly
because of the density and endurance of
Chistiye Prudy's existing real estate.
Localities and Living
Nostalgic
Moscow in
Chistiye Prudy
Work and Play
T
by Alec Luhn
VLADIMIR FILONOV
I
f Ostozhenka is for fat cats and
Arbat is for eclectics, then Chistiye
Prudy is for nostalgics. Although
Chistiye Prudy — the area to the
northeast of the Kremlin bounded
roughly by Kitai Gorod and the
Garden Ring — has become a center of nightlife, it also has managed
to preserve its pre-Soviet architecture
and layout better than similar central
Moscow neighborhoods. In a city where
skyscrapers are breaking through the low
skyline, glass facades are replacing Soviet
concrete and thoroughfares are being
plastered and even spray-painted with
advertising, Chistiye Prudy is one of the
last places where homebuyers can still
find the atmosphere of old Moscow.
“This area's still got lots of old buildings. It hasn't been reconstructed like other
areas,” said Andrei Borodin, 33, who has
lived in the neighborhood since 1991 and
who works at Trans-Siberian Hostel on
Barashevsky Pereulok. “You can still feel
the Moscow we knew when we were children in the courtyards and lanes.”
Over the past decade, a real estate
dichotomy has emerged in Chistiye Prudy.
Because of its lack of construction and
its proximity to centers of government,
culture and business, it has a dual market:
Spartan housing can be found in its mass
of unrenovated rental apartments in old
The Chistiye Prudy neighborhood's namesake pond reflecting trees and fine architecture in this
warm-weather photograph. The area's atmosphere brings in partiers and high-income residents.
buildings, while luxurious living is on sale
in its limited number of newly built or
remodeled elite apartments. What's more,
that gap is continuing even as new construction trickles into the neighborhood.
Unlike most of Moscow, Chistiye
Prudy has remained relatively untouched
since the late tsarist era. Its closest competitor for the “old Moscow” mantle, the
Arbat neighborhood, was half torn-down
in the Soviet period, but Chistiye Prudy
weathered the ambitious reconstruction of
Soviet times and the uninhibited development of the Wild '90s almost unscathed.
“The Chistiye Prudy neighborhood
is unique in that substantial changes
haven't happened since the end of the
19th century,” said Anastasia Mogilatova
of the Welhome agency, which deals with
elite real estate. “More than 50 percent of
the buildings in this nook of old Moscow
date to this time.”
Few mid-range alternatives exist
between the area's elite and unrenovated
options. Secondary market, or previously
inhabited, apartments in the area have an
average cost of 200,000 rubles to 230,000
rubles ($6,400 to $7,400) per square
meter, realtors from the MIAN real-estate
agency said. Meanwhile, Chistiye Prudy's
new housing, most of which falls in the
elite category, ranges from 250,000 rubles
to 600,000 rubles ($8,100 to $19,300)
or more per square meter. As the cost per
square meter is multiplied, the price difference between old and new apartments
becomes significant.
New construction will eventually come
he history of Chistiye Prudy, or “clean
ponds,” starts with an “Unclean Pond,”
or Pogany Prud, as the single pond remaining in the area was originally known.
Although there are various accounts, it is
commonly believed that the pond received
the "unclean" name around the 17th
century, when butcher shops on nearby
Myasnitskaya Ulitsa would throw their
meat scraps into the pond. This and other
nearby ponds became known as Chistiye
Prudy around the turn of the 18th century, after a famous statesman and friend
of Peter the Great, Alexander Menshikov,
built a mansion in the area and cleaned up
the ponds, according to Russian-language
history web sites.
After Chistoprudny Boulevard was
built in 1820, the Moscow upper class
built mansions on the side of the thoroughfare closer to the Kremlin, while
commoners built their homes on the outer
side. Besides the various social classes, the
area also was home to many religious and
ethnic minorities. Today, the traces of these
enclaves can be seen in street names such
as “Armenian Alley” and in the diversity
of religious buildings, including Lutheran
and Catholic churches and a synagogue.
Today, a sizable number of French speakers can be found in Chistiye Prudy due in
large part to the French Lyceum. Also, the
Armenian, Belarussian, Iranian, Kazakh,
Latvian and Swiss embassies are located
here.
Many historic buildings dot the area,
continued on page 2
VLADIMIR FILONOV
ALEC LUHN
A sign advertising "Dom na Myasnitskoi," one of only several new residential projects in the area.
continued from page 1
including the Sretensky Monastery (17th
century), the Church of the Entry of the
Holy Mother in Barashi (17th century)
and the Church of the Archangel Gabriel
(18th century). Alongside such architectural relics are Stalin-era apartment
buildings and other monuments to Soviet
architecture, including the Tsentrosoyuz
Building. The best-known post-Soviet
building is the red “Egg House” on
Mashkova Ulitsa, which, as its name suggests, resembles a Fabergé egg.
Chistiye Prudy attracts homebuyers
and renters not only with its historic
architecture, but with its cultural life and
closeness to the capital's centers of business and government as well.
“The assets of the cultural and historic
center of the capital and the more business-focused, modern parts of the city are
equally accessible” from the Basmanny
and Krasnoselsky districts, said MIAN
general director Vasily Mitko. Basmanny
and Krasnoselsky are the two municipal
districts in which the Chistiye Prudy
neighborhood is located.
The combination of business and recreational features gives the area potential
for long-term growth, Mitko added.
In particular, Mitko pointed out
the proximity of the Higher School of
Economics and various museums and government buildings, including the city and
federal duma buildings. A large number of
A building showing off its artistic reliefs near the corner of Pokrovka and Chistoprudny Bulvar.
offices also has appeared in the area during
the past 10 years. This has attracted many
well-to-do tenants seeking to live within
walking distance from work, he said.
Chistiye Prudy is less well-known as
a place to work than as a place to play,
however. Even during the Soviet era,
Chistoprudny Bulvar was a street for strolling and socializing. Today, on any weekday
evening or weekend with walkable weather, buskers play for change, young people
carouse and passersby admire the boule-
in the city,” she added, referring to the
street just south of the pond.
A final advantage of the region is
its comprehensive public transportation
infrastructure. The Red, Orange and
Light Green subway lines converge in
Chistiye Prudy, and buses, trams and
marshrutki (gypsy vans) run frequently
along the neighborhood's traffic arteries.
Three trams travel along Chistoprudny
Bulvar itself.
“The central location and developed
New construction in Chistiye Prudy has
been limited by the density of existing
buildings in the area.
vard's monuments. Recently, the boulevard hosted a temporary photo exhibit of
Russian Orthodox religious scenes.
Since the fall of the Soviet Union,
the area has witnessed an explosion of
bars, 24-hour cafes and clubs, including
Propaganda and Krizis Zhanra. Residents
said the concentration of nightlife attracts
young people from across the city.
“There's the boulevard and the clubs,
or you can just walk around or go to a
cafe,” said Darya Voskresenskaya, 27, who
rents an apartment on Ulitsa Chaplygina.
“Pokrovka is one of the best party streets
transport infrastructure have especially
influenced the character of the [Chistiye
Prudy] real estate market,” Mitko said.
But Chistiye Prudy's main draw, realtors and residents agreed, is its peaceful,
nostalgic atmosphere. The neighborhood's
ambience even inspired an eponymous
popular song by Igor Talkov, who sang
“Chistiye Prudy, green dream of the centuries / the distant shore of my childhood
/ where the accordion plays.”
“Today Chistiye Prudy is the tranquility of cozy, quiet streets; an abundance of greenery, ponds and tennis
courts; the famous theater, Sovremmenik;
and ancient, low-standing residences,”
Mogilatova explained. “This romantic
atmosphere attracts buyers here.”
The Grass Isn't Always Greener
n addition to Chistiye Prudy's many
attractive features, however, there are
ALEC LUHN
COURTESY OF INTERMARKSAVILLS
I
drawbacks. Despite Talkov's adulation of
the region's “green dream,” Chistiye Prudy
lacks a park of any significant size, and
greenery is hard to come by outside the
boulevard. The number of public schools
lags behind that in central neighborhoods
such as Khamovniki, realtors said, and
exercise options are limited because of the
lack of open space and relatively few fitness clubs.
“For people who like a morning jog,
this is not the best place because of the air.
There's lots of traffic, and there's no big
park around here,” Borodin said.
Voskresenskaya also noted the poor air
quality in the area. “The environmental
conditions are bad, and there are constantly lots of people,” she said. “It suits
me here, but if you have a child it's probably not healthy.”
On any weekday, the neighborhood's
thoroughfares are overloaded. That poses
the greatest inconvenience to those living
or working in the area, realtors said.
“The discomforts are the same as in
other central neighborhoods, especially
transport access,” said Yekaterina Guriyeva,
the head of the in-town residential real
estate department at IntermarkSavills.
“If you need to drive or take the kids
somewhere, the situation is difficult, and
Chistiye Prudy is not an exception.”
When asked about traffic in the area,
Borodin was quick to relate anecdotes
illustrating the daily — and sometimes
nighttime — gridlock.
On weekends, he said, "there's horrible traffic jams even at three in the
morning because of the big clubs." Even
if you do manage to make it through the
traffic, it is nearly impossible to find a
spot for your car because of the underdeveloped parking, he added.
Parking is cropping up in other
neighborhoods, but it isn't appearing in
The Rossiya building poking up from Sretensky Bulvar. It is a mainstay of the elite market.
2
Luxurious housing brightening up the inside of the Rossiya, which was completed in 1902.
The Moscow Times Real Estate Catalog
December 2010
Chistiye Prudy, or at least not much of it,
Guriyeva said.
Rising Demand
onetheless, demand for housing in
Chistiye Prudy is growing, realtors said.
While the neighborhood is not grouped
with "The Golden Mile” of astronomically priced real estate near Ostozhenka,
the average price per square meter of elite
new real estate in Chistiye Prudy — about
$15,000 — is the third-highest out of 11
centrally located neighborhoods, according to Welhome statistics.
The majority of new apartments for
sale belong to the elite segment of the
market, Mitko said. By MIAN's standards, “elite” signifies a price of at least
250,000 rubles ($8,100) per square meter,
a videocamera security system, high-quality construction materials and an express
elevator if in a multistory building.
The limited construction in Chistiye
Prudy — most new buildings are raised
next to an existing structure on the same
plot of land — leads to high demand for
new elite apartments. As a result, many
buyers turn to the secondary market for
elite homes. Mitko said most clients purchasing new real estate in Chistiye Prudy
are wealthy buyers seeking elite apartments to live in or as an investment.
Finding middle-class housing is difficult,
he added.
An economical alternative to the elite
market is housing in run-down older
buildings, often without elevators, which
is plentiful in Chistiye Prudy and costs less
than similar housing in central neighborhoods like Khamovniki, Guriyeva said.
In fact, the majority of real estate transactions in the neighborhood take place on
ALEC LUHN
N
Cars parked two deep on Krivokolenny Pereulok demonstrating Chistiye Prudy's parking problems.
the secondary market, said Mitko.
“Among our buyers on the secondary market are members of the upper
middle class who work in large Russian
and international companies or own small
businesses,” he added.
Borodin, whose family lives in a sixroom apartment in an older building,
echoed Mitko's appraisal of the average
Chistiye Prudy real estate buyer as upper
middle class, noting that a foreign architect
and a French diplomat live in his building.
Voskresenskaya said apartment owners are
mostly lifelong Muscovites and “intelligentsia,” while many middle-class and “artistic
youth” rent apartments here.
Borodin lauded secondary market
apartments in the area, pointing out that
older apartments are often more spacious
and feature higher ceilings. However, buy-
ers should scrutinize the condition of older
apartments and the building's utilities,
since a lot of those on the market require
major renovations, Mitko cautioned.
“If you rent an inexpensive apartment,
it often happens that the conditions there
are poor,” such as with plumbing, said
Voskresenskaya, who has done renovations in her apartment in exchange for
reduced rent.
Although elite new apartments are in
vogue in Chistiye Prudy, supply has yet
to catch up to demand. Construction of
elite housing in the region began only in
the early 2000s, much later than in Arbat,
Ostozhenka and Patriarch's Ponds, realtors noted. Furthermore, new construction has been limited by the density of
existing buildings in the area.
“Thanks to the landscape and histori-
cally developed architectural conception
of the neighborhood ... massive construction of modern housing here isn't possible,” Mogilatova said.
One of the few major housing construction projects in the region is Dom
na Myasnitskoi, which is being built on
Myasnitskaya Ulitsa by Sobor-Sm with
investment from the Moscow government. The five-story complex, which is
slated for completion in fall 2012, is
expected to have office and retail space on
the first two floors. It also will have four
additional levels underground, including
three stories of parking. Apartments start
at 330,000 rubles ($10,600) per square
meter, with the most expensive offering so far a 386 square-meter apartment
for 235.8 million rubles ($7.6 million).
Medium-size apartments of up to 150
square meters with views on Myasnitskaya
and the city center are most in demand,
said Mitko, who has clients considering
apartments in the building.
More construction is on the way, realtors said. Although developers can construct elite housing in Chistiye Prudy with
the knowledge that it will sell, for now it
is simpler to build in other neighborhoods
with fewer constrictions, Guriyeva said.
But as the rest of Moscow is built up,
developers will turn to Chistiye Prudy if
only because of its central location.
Realtors are recommending Chistiye
Prudy as a place to invest in real estate.
“The purchase of housing in the area
around Myasnitskaya Ulitsa was and
remains attractive from the point of view
of long-term investment,” Mitko said.
When development does arrive, it
remains to be seen whether Chistiye Prudy
will change drastically or remain a neighborhood for nostalgics.
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December 2010
The Moscow Times Real Estate Catalog
3
In '11, Positive Signs and
A Mayoral Question Mark
by Rachel Nielsen
C
Publisher
Editor-in-Chief
U
end office buildings, a trend that will
continue in 2011, analysts said.
High-end office vacancy is now estimated at under 20 percent by analysts interviewed for this article. Jones
Lang LaSalle’s corporate clients chief in
Moscow, Andrei Postnikov, estimated
the current vacancy rate in Class A
offices to be 17 percent. Next year, “we
could see the vacancy rate go to 10, 12
percent, even less,” he said.
The figures indicate a marked
uptick. Real estate consultant Colliers
International put vacancies for Class
A offices in June at nearly 20 percent,
while Jones Lang LaSalle said 30 percent
of Class A offices were vacant around
the start of this year.
Now, companies are hiring and seeking bigger or just spiffier places for
their employees. Some are buying or
leasing that space in existing buildings,
while other companies are springing for
spanking-new digs.
About 800,000 square meters of
office space could be finished by the
end of 2011, said Olga Pobukovskaya,
the office property director of Colliers
International’s Moscow branch. That
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figure is up from roughly 500,000 square
meters expected to be finished this year.
In 2009, office space was just a fraction
of those figures, she said.
Pobukovskaya predicted that major
projects, such as Don-Stroi Invest’s
planned Oruzheiny retail and office
center near Olimpisky Prospekt, would
be pushed ahead.
“We expect closings from interesting
deals that have started at the end of this
year,” she said. In general, the capital’s
commercial market will be more active
in 2011, as large companies look to
move their employees into newly constructed offices in 2012.
Expansion of Western hotel chains
took place in the capital in 2010, with
Rezidor Hotel Group opening its second
Radisson-brand hotel in April. Western
hotel expansion is expected to continue
in the capital next year.
The warehouse market also has experienced growth this year, with about
996,000 square meters rented and purchased through September, which is
greater than the full-year figure for 2009
of 939,000 square meters, according to
Jones Lang LaSalle research.
Retail also is making a comeback.
Postnikov said there was an increase
in retail space transactions this year.
Retailers “didn’t have the appetite to
acquire new space last year...they were
kind of frozen,” he said. Now, stores
ranging from small food shops to the
gigantic Mall of Russia near MoskvaCity are opening their doors. Mall of
Russia is slated to open in December.
Postnikov said a push to complete
Moskva-City itself — the business center
that was a pet project of ousted Mayor
Yury Luzhkov — is also possible. If
completed according to expectations,
the collection of gleaming high-rises will
offer roughly 1.3 million square meters
of office space.
That figure would be roughly 10 percent of Moscow’s office stock, Postnikov
said, adding that the office space at
Moskva-City won’t cause a glut. In
fact, there is currently an undersupply
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The Moscow Times Real Estate Catalog
T
A
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Ekaterina Son
Rachel Nielsen
[email protected]
Staff Writer
Alec Luhn
[email protected]
Copy Editor
Art Director
Justin Lifflander
Maria Georgiyevskaya
Advertising Director
p, up and up. Then way,
way down. And up again. In
steps. That’s how Moscow’s
commercial real estate market has performed over the
past five years, as the capital’s
real estate boom collided with the global
economic crisis, the market bottomed
out and a recovery began this year. Now
the question is, where is the market
headed in 2011?
The answer is up some more, real
estate insiders said. More and more
businesses are filling unused offices,
while construction equipment is revving up on stalled sites. Meanwhile,
brand-new locations, such as the business center at 8 Preobrazhenskaya
Ploshchad and the Legend of Tsvetnoi
office and apartment complex on
Tsvetnoi Bulvar, are seeking to sign
tenants. The upward arrow may be a
jagged one, however, as the city adjusts
to its new mayor, Sergei Sobyanin, and
his at least initially more conservative
approach to development.
There are signs of improvement in
Moscow’s commercial market. One is
the decrease in empty offices in high-
A
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of office space, and, compared with
cities in the United States or Europe,
Moscow’s amount of space for whitecollar workers is lagging, he said.
Construction at Moskva-City was
interrupted in late 2008, just as the crisis
swept the country.
Just-installed Mayor Sobyanin has
weighed in on Moskva-City, calling it an
“urban planning mistake,” Moskovsky
Komsomolets and other media reported.
He said “what’s done is done,” however,
and called for city planning to deal with
the expected increase in traffic around the
site. Plus, Sobyanin has already waded
into other areas of commercial real
estate. For instance, he said he wants to
ban the construction of office centers
and malls within the Third Ring Road.
His ambitious tactics for combating
the city’s snarled traffic, which his team
published online and which include limiting new building construction to allow
for wider traffic lanes, could also change
the city’s real estate dynamics.
As for the questions left by Luzhkov’s
absence, Postnikov said no one "can
really have a good answer." Next year will
be the first in nearly two decades that the
capital rings in the new year without the
one-time mayor and his real estate mogul
wife, Yelena Baturina.
“But we anticipate some changes and
probably some further limitations with
regard to big developments in central
Moscow,” Postnikov said.
Pobukovskaya also noted Sobyanin’s
desire to alter the commercial real estate
market in Moscow’s center, as well as his
anti-traffic campaign.
Regarding the effects of Luzhkov’s
ouster on the commercial market,
Pobukovskaya said, “Tricky question.
Nobody knows!”
December 2010