Russia: Fairy tale ending or start of a
Reforms are crucial to recovery
ALWAYS READ THE small print.
Its one of the cardinal rules of any successful
investment strategy but seemingly one that was widely ignored
when it came to the Russian real estate market. In the
pre-credit-crunch period, investors snapped up billions of
dollars-worth of stock in initial public offerings from the
sector in the belief that demand and prices for real estate in
Russia were heading in one direction only to infinity
and beyond. With the benefit of 20/20 hindsight, that highly
optimistic belief in the sectors prospects looks sadly
misplaced. Financing for developers and their customers has all
but dried up, with the result that prices for commercial and
residential real estate are already down 30% to 50% over the
past 12 months and still trending lower.
Although real estate...