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Nizhny Novgorod’s most notable 2009 newsmakers, Part 2 |
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Oleg Kouzbit, Online News Managing Editor
Last week Marchmont began a series of overviews to highlight Nizhny Novgorod’s most important 2009 corporate newsmakers. A brief look was taken at how regional heavy industries had grown over the past year. In today’s feature we offer you a summary of 2009 achievements and failures in Nizhny’s real estate sector.
WTC Nizhny Novgorod
The most notable event in Nizhny’s commercial real estate sector in 2009 was the official opening in September of the first $50m stage of the World Trade Center Nizhny Novgorod—the first such center in the vast Volga Federal District of Russia.
Between now and late 2012 two more stages of A-class office space, hotels and parking are planned to create a $245m multifunctional complex.
The Nizhny WTC’s largest investor is Moscow-based investment and brokerage group Aton.
WTC Nizhny Novgorod is now part of one of the world’s largest business cooperation networks, currently consisting of 330 WTC-branded centers in more than 100 countries.
Nizhny’s ‘builder of the year’
In late 2008 experts across the real estate sector were decidedly downbeat about residential and commercial development here, but Nizhny developer Stolitsa Nizhny is a good example of how experts don’t always get it right.
In February 2009 the company announced $171m worth of Sberbank-supported plans for an ambitious residential complex in Nizhny Novgorod. The 150,000-square-meter project was named Sedmoye Nebo (Seventh Heaven) and called for construction of eighteen 17-storey apartment blocks, complete with social and business facilities, in an eco-friendly city district next to the Volga River.
Under plans unveiled at the height of the credit crunch, the first four blocks were supposed to be completed and sold by the end of 2009, with the entire complex to be finished in 2011.
The developer not only carried out its 2009 plans but did even more. By the year end five apartment blocks were commissioned and a sixth almost ready by early 2010 and people reportedly buying apartments prior to commissioning.
And three more blockbusters
In August Stolitsa Nizhny jolted the regional commercial real estate market again by announcing a $57.4m multifunctional complex in Nizhny Novgorod on an 85,000-square-meter land site that the company would reportedly rent for up to 49 years.
Under plans, the complex will include retail, office, sports and leisure facilities.
The company said it is on track to begin construction “within the next five years.”
As 2009 came to a close, the developer broke news of yet another multifunctional mall in the city. The $35m DIY-type retail project, reportedly designed to cater to the ‘dacha market’ (summer houses with gardens) will break ground early next year and be put into full operation in 2014.
Stolitsa Nizhny’s crowning achievement in 2009 was the December launch of $12.2m Phase 1 of its DIY-hypermarket Castorama in Nizhny Novgorod. The 13,000-square-meter outlet is located near its Seventh Heaven development.
This year the company is reportedly beginning construction of Castorama’s $100m second stage to include a grocery’s, multiplex, retail shops, food court, and a 4,000-car parking lot.
Investing in healthy lifestyle
Nizhny Novgorod has traditionally been a sports hub for Russia’s entire Volga area. There used to be active construction going on for both professional and amateur sports but it dwindled in the past decades. Last year two companies attempted to revive interest by announcing new sports facilities.
In July, Nizhny country club Ildorf announced its $32m sports complex.
Construction of the 6,000-square-meter facility will be in the city’s Sovietsky district and is expected to kick off in May. Plans also include snowboarding and skiing facilities, swimming pools, multifunctional sports halls, a sauna complex, and a 150-room hotel.
Ildorf has set a target date of 2012 to complete the project.
In February, Moscow developer SU-155 announced it was revisiting its 2008 plans to build a ski complex next to Nizhny’s Grebnoy Canal on the Volga River.
The $250m, 28,000-square-meter project calls for construction of a 120-meter ski-ramp, 22,000-square-meter ski slope, skating rink, water-park, retail space, as well as a residential complex with a hotel and parking.
The company’s projected completion date is 2012.
Coming from afar to build in Nizhny
SU-155 wasn’t the only ‘Varangian’ in 2009 to lay down construction plans for Nizhny Novgorod. Developers from Russia’s two capital cities of Moscow and St. Petersburg have had vested interests in Nizhny Novgorod since the 1990s’ real estate boom. They made notable headlines last year, too.
In February, Moscow’s Atlas Torgovli announced $200m plans to build an underground mall in downtown Nizhny. The four-level project with cafés, plenty of retail space and a 600-car parking lot was supposed to be built under Gorky Square almost in the very heart of ancient Nizhny. The second level was designed to lead to a new subway station currently under construction, the first in Nizhny’s historical center.
The developer set up its local subsidiary, Modnaya Ploschad Nizhny Novgorod, to carry out the endeavor. Originally, construction completion was scheduled for 2013.
Local authorities took almost six months to review the project, as well as competitive proposals from Moscow’s Snegiri Development and Nizhny’s Tekhnologii Budushchego.
In July Atlas Torgovli received approval for a modified plan for its underground mall—with a new more modest price tag of just $110-111m.
The city will lease a 12,400-square-meter land site on Gorky Square for 49 years to the Moscow company. Atlas Torgovli is expected to build underground passages, retail outlets, and a parking lot (for 463 cars underground and 130 cars at ground level).
Local media have already named the project ‘Nizhny’s new Manezh’ after the famous (and for some notorious) underground mall right next to the Moscow Kremlin.
Construction is reportedly scheduled to begin in late 2010 – early 2011 and last two years.
In August, St. Petersburg-based Invest Development said it wanted to build a number of medium-sized WOTT DIY-hypermarkets outside Nizhny Novgorod. With a reported $217m in overall investment the developer had plans to build its markets in a dozen smaller cities and towns across the region.
There are no timeframes specified as yet, but the company is reportedly well financed.
Bowing out...
Nizhny’s 2009 real estate market had its losers, too. Oleg Deripaska’s Basic Element was perhaps the most prominent.
In October the holding, which had by that time accumulated $1+bn debt, had to cancel its ambitious $440m, 400,000-square-meter residential complex in Nizhny Novgorod, for which it had purchased in 2008 five-year $37m renting rights.
Despite sagging rentals and project delays, the Nizhny Novgorod region came through 2009 in much better shape than many imagined. Now all eyes are on 2010 to see if the positive trend will continue.
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