Authorities tighten the nuts
The main owner of Class C premises is the Moscow government represented by organizations subordinate to it, such as the Moscow Joint-Stock Company. As confirmed by the Moscow State Joint-Stock Company, they do indeed lease municipal land to private enterprises, but did not give details. Over the past year, the government has twice tried in its own way to restore order in this sector, announcing a decision to increase rates on municipal areas to market levels (from 700 rubles to $ 400 per 1 sq. M per year) and prohibiting the rental of premises in hotels.
Signed by Moscow Mayor Yury Luzhkov, the order forbids from February 1, 2005, administrations of municipal hotels to enter into lease agreements for rooms for office, retail, and services. According to consultants, a third of the capital’s hotel stock was used for offices. Although their prices were not low – $ 400-700 per 1 sq. Km. m
Market players said that raising rates is another resource to replenish the city treasury. At a press conference on the results of 2004, the head of the complex of economic policy and development of Moscow, Yuri Roslyak, said that the rental of non-residential premises for rent guaranteed to bring about 10 billion rubles to the city budget. And even earlier, Vladimir Silkin, the head of the City Property Department, openly stated that some tenants, using preferential rental rates in municipal premises, sublease them, the income from which annually brings them about $ 100 million. “In 2005, prices in segment C will grow, since most of the space belongs to the city government, which promises to raise rates by almost half, ”said Alexander Limarenko.
“Raising prices for municipal premises will only exacerbate the problem of small business,” says Dina Krylova. Raising prices for Class C offices will not make these offices better. The position of the Moscow government can be understood: you need to replenish the city budget and deal with tenants who rent out premises that they received at discounted prices at market rates. But such companies that lease premises are easy to identify. So while the actions of the government seem more likely to be aimed specifically at replenishing the treasury. In the meantime, there are indeed quite a few entrepreneurs whose low office rents are helping to get on their feet.
What does the market offer?
The market can still offer small and medium-sized businesses better conditions than those in the old buildings of the research institute or basements. But there are few options.
You can buy a mansion for reconstruction in the secondary market. The cost of such buildings is now $ 500-700 per 1 sq. Km. m. Become its owner, repair ($ 500 per 1 sq. m), occupy part of the premises in it, and the rest are recommended to be rented out by Region Development. A successfully reconstructed object of class B yields a yield of 15-20%. Another thing is that the supply of such mansions in the market is also in short supply.
The cheaper way is non-residential premises on the 1st floor of a residential building. It can either be rented already equipped as an office, or bought at the construction stage of a house and repaired on its own. 300 sq. Block m with a separate entrance costs about $ 3000 per 1 sq. m in the central areas of the city and approximately $ 1,500 far from the center. To repair the premises will require $ 500 per 1 sq. Km. There is also a way similar to shared construction in the housing market – shared participation in the construction of a business center.
According to Noble Gibbons consultants, Class B offices located away from the city center are sometimes rented at rates comparable to Class C in more prestigious areas.
Kings of industrial zones
One of the largest players who are not ashamed of public fame in the class C office market has become the investment company Vizavi. She was distinguished by the fact that two years ago she bought 0.5 million square meters. m of urban enterprises. Having occupied an undeveloped market sector, the company undertook the reconstruction of obsolete production buildings and combined 500,000 square meters. m into a single network under the brand name “Office Park Visavi.”
In several areas of Moscow, business parks already operate, where premises are leased at rates of $ 200-350 per 1 sq. Km. m per year. In particular, in the office-park “Sheremetyevsky” 14,000 square meters. m rents a publishing house “Burda”. Vizavi invested $ 100 million in the purchase of buildings and their repair and expects the project to yield more than 30% per annum. According to Petr Koshkin, Deputy General Director of Vizavi Investment Company, the low rental price for these premises is explained by the fact that the owner rents them out without intermediaries.
About 400,000 square meters. m of network offices belongs to classes C and B. These are Mozhaysky parks on 6 hectares of land in the Western Administrative District, Dmitrovsky in 4.5 km of the North-Eastern District, Sheremetyevsky in the Maryina Roshcha area (6 ha), “Warsaw” with an administrative building with an area of 2690 square meters. m and office and commercial building with an area of 7300 square meters. m, “Krasnoselsky” on the territory of 1.3 hectares. The Kursk park is being designed for 45,000 square meters. m total area.