Moscow Investment digest January 2018
The Moscow Department for Economic Policy and Development, in cooperation with the Moscow City Investment Agency, presents a new issue of the Moscow Investment Digest.
VDNKh EXPO development project investor is selected
Based on the open competition results, the Tashir Group of Companies was selected as an investor for the high-tech VDNKh EXPO cluster project. The project launch is scheduled for early 2018. The development of the EXPO area includes restoration, reconstruction and construction. The total investment amount is RUR 27.281 bn, the investor's share being RUR 22.271 bn.
"The new EXPO center area will exceed 320,000 square meters. According to preliminary estimates, the annual number of visitors will increase from 1.5 to 4.5 million. For their convenience, a roofed promenade gallery will be arranged. Due to energy-saving construction technologies, environmentally friendly materials, efficient space arrangement and the unique historical landscape of VDNKh, Moscow will be able to create an expo cluster to be envied by any metropolitan city in the world", Deputy Mayor of Moscow for Economic Policy and Property and Land Relations Natalya Sergunina said.
The EXPO cluster will comprise three exhibition pavilions and related infrastructure (cafes, restaurants, shops, etc.). Within the cluster, modern convertible exhibition and concert halls, as well as an international customs warehouse facility will be arranged.
Moscow is the main innovation and technology center of Russia
"Moscow is the leading Russian center, where new technologies are tested and implemented, and the relevant large-scale projects are deployed", Head of the Moscow Department for Economic Policy and Development Vladimir Efimov said.
Moscow's leadership in mastering cutting-edge technologies is proved by major innovation projects. One of those is "My Documents". 128 "My Documents" offices are currently operating in Moscow, having provided about 25.5 million services in 2017, with an average waiting time of only three minutes. The range of electronic services covers almost all city life sectors: culture, health, education, business, and transport. In addition, Vladimir Efimov distinguished the project for developing a city electronic patent system, including a labor patent system for migrants.
Moscow Investment Portal was visited by a record high number of users in 2017
The Investment Portal has registered over 1.7 million visitors during the current year, and 4 million visitors since February 2014, when it was created. Besides, more than 20% of visitors are foreign users. The most demanded sections of the Investment Portal are Auctions, Investor's Guide, Investment Map, and Investor's Personal Account over 13,000 entrepreneurs have already signed up for. The Investor's Personal Account provides access to 14 online services of the portal. "The today's most popular online service allows to apply for visiting the property items listed for auction. Since the service was launched in early 2016, the portal has received about 27,000 applications", Head of the Moscow City Investment Agency Leonid Kostroma stated.
In 2017, the examination of initial public procurement prices allowed to save more than RUR 54 bn for the Moscow treasury
The Moscow City Investment Agency, State Budgetary Organization Mosgosexpertiza and independent expert organizations verified of the initial (maximum) prices of the government contracts, in order to meet the needs of the Moscow city, saving RUR 48 bn of treasury funds during the last year, which is 60% more than in 2016. Another 900 million rubles were saved due to the price verification carried out by the Inter-Agency Working Group.
Besides, in 2017, the treasury expenditures were cut by RUR 5.7 bn as a result of examining the initial (maximum) prices of the procurement contracts concluded by Moscow state unitary enterprises, business companies, state autonomous and budgetary institutions.
"In total, the initial government contract price examination in 2017 allowed to save a record amount of RUR 54.6 bn for the city treasury, which is 23% more than in 2016", Moscow Government Minister, Head of the Moscow Department for Economic Policy and Development Vladimir Efimov informed.
The leading role in saving treasury funds through examination was played by the competent Department of the Moscow City Investment Agency. According to Moscow City Investment Agency Head Leonid Kostroma, verifying the initial (maximum) prices of the government contracts concluded for the Moscow city needs allowed to cut treasury expenditures by RUR 35.5 bn in 2017, i. e. about 65% of the total savings in this area.
The Moscow R&D export grew by 50% during the first nine months of 2017
Moscow Government Minister, Head of the Moscow Department for Economic Policy and Development Vladimir Efimov noted that it is no coincidence that the Moscow export growth is related to high-tech applications: during the first 9 months of the last year, the R&D export grew by 49.8%, and the IT export increased by 15.5%. According to the Minister, the city provides all the necessary conditions for the further development, including high-quality personnel, a well-developed infrastructure, an experience of advanced solution implementation and the authorities' support.
Moscow received RUR 15.7 bn due to labor patents in 2017
The Multifunctional Migration Center issued more than 453,000 labor patents in 2017. This is 12% more than in 2016. "RUR 15.7 bn were received last year, which is 9% more than in 2016," Moscow Government Minister, Head of the Moscow Department for Economic Policy and Development Vladimir Efimov said.
This became possible due to the labor migration reform, which allowed the inefficient administrative regulation model to be replaced by an economic one. Quotas were replaced by labor patents, and the Russian regions were entitled to evaluate those depending on the peculiarities of the relevant labor markets.
Moscow continues to support efficient enterprises
Moscow is actively developing its industrial potential, stimulating innovative production enterprises and technical research projects. Only in 2017, 27 companies in different processing and innovation industry branches joined the real sector support program developed by the Moscow Government in 2016.
"It is only efficient enterprises that may obtain the status of an industrial complex, a technopark, a Moscow technopark resident, a special economic zone, and, accordingly, be granted with tax and other benefits. 76 companies have received support from the Moscow Government since the program launch: 39 industrial complexes, 33 technoparks, and 4 anchor technopark residents", Head of the Moscow City Investment Agency Leonid Kostroma stated.
Technopark Rudnevo received the status of a priority investment project
The technopark accommodates five plots with a development potential for industrial projects needed for the city: manufacture of construction materials and components, metal processing, machine-tooling etc.
The technopark residents will comply with all sanitary standards and have the necessary technology and processing solutions to carry out full operational cycles.
The status of a priority investment project allows to receive substantial support, including tax benefits. This status is awarded to the entities that implement social and infrastructure programs, as well as the programs in the priority sectors of the city's economy and modernization of production sites.
At least RUR 150 bn were invested in New Moscow construction in 2017
Over RUR 800 bn have been invested in the development of the Troitsky and Novomoskovsky Districts during the last five years. Most of the funds are the private investors' money. The amount of funds invested in New Moscow development until 2035 is 7 trillion rubles, with only ca. 20% of treasury funds. More than 1 trillion rubles of the invested funds are to be spent on the road and transport infrastructure development, and about 2.8 trillion for housing construction. The rest of the funds will be used to construct commercial real estate, social facilities and to develop engineering infrastructure.
Besides, it is planned to create at least 10 industrial parks in New Moscow. About 28,000 hectares of land might be allocated to achieve this purpose. To build industrial parks, both treasury funds and the investors' money will be used. For instance, New Moscow is now intensively developing the Comcity business park, which will provide 20,000 jobs after the project completion. More than 10,000 new jobs were created on the annexed territories in 2017.
Investors delivered over 40 social projects in 2017
41 social facilities were built and introduced by investors during the last year, including nine kindergartens, five schools and seven sports and recreational facilities. In total, investors have provided Moscow with more than 3,500 school places and 1,080 kindergarten places.
Thus, last year, 38% of schools, 64% of kindergartens, 50% of medical centers, 32% of sports facilities, and 60% of cultural facilities were built by investors.
Over 180 construction projects in the Unified Project Bank
In 2017, the base of the Unified Project Bank was supplemented by another 74 investment projects. To date, it comprises 182 construction projects accounting for 5 million square meters of real estate.
Residential real estate projects are the most demanded among investors. The Unified Bank is a virtual platform, which is intended for rightholders interested in selling their projects or finding co-investors for the implementation of those, as well as for investors willing to invest in construction.
Over 180 cultural property items in Moscow were restored in 2017
In 2016, the property state analysis was completed. 248 items (about 6%) in Moscow were found to be in an emergency and unsatisfactory condition. In total, 423 monument buildings were under restoration in 2017, 182 of the projects have been completed, and 430 are planned for 2018. The landmark items include the building of the People's Commissariat for Finance, the restoration of which is planned to be completed in three years.
Besides, the reconstruction of the tenement building on Povarskaya Street was completed at the expense of private investors. The building housing 129 apartments has an area of more than 37,000 square meters. After the facility commissioning in 2017, the building was named "Theatrical House". Half of the 182 facilities were restored at the expense of investors.
A 19th-century tenement building in Khamovniki was put up for auction
The building at Kropotkinsky Lane 10/1 was put up for public auction under a 49-year preferential lease program. According to the program terms, the future leaseholder may switch to a preferential rental rate "1 ruble a year per square meter" if it undertakes to restore the facility original appearance. All types of repair and restoration work should be completed in 3 years and 6 months. The purpose of the building is not specified.
Applications for the auction are accepted until February 16; the auction will be held on February 21, 2018.
Online real estate sales in Moscow increased by almost 50% in 2017
This was reported by Deputy Mayor of Moscow for Economic Policy and Property and Land Relations Natalya Sergunina.
According to Natalya Sergunina, last year 19,000 buyers announced their intention to purchase city real estate via electronic platforms, which is 6,000 more than in 2016. "It does not only concern the intention to make a virtual purchase. Buyers participated in the electronic auctions held by the Moscow unified trading platform. The increase in the bidders number shows that the business community and citizens purchasing apartments and car spaces are very well informed and trust the digital trading concept. The acquisition of real estate through an electronic auction is becoming one of the Moscow trends", she said.
Head of the Moscow Department for Competition Policy Gennady Dyogtev stated that 99.4% of all city auctions were held in electronic form. More than half of the bidders, namely 11,000, are individuals.
The city real estate is in great demand among small and medium-sized businesses
About 900 people took part in auctions for commercial real estate lease in 2017. The number of the city real estate facilities and land plots sold at the auction has doubled: in 2017, the number of bidders willing to rent real estate increased up to three or four people against two bidders for one lot in 2016. More than 95% of the participants are the representatives of small and medium-sized business.
As Head of the Moscow Department for Competition Policy Gennady Dyogtev noted, an average final price excess had changed as well. "In 2017, an average final price excess made over 40%, as compared to only 32% a year earlier", he said. The most popular facilities turned out to be the ones located in the Central Administrative District.
Small-area items are also in demand among bidders. At year-end 2017, 150 items were sold, and the number of bidders increased from 5 to 8 per lot. More than 1200 bidders announced their intention to purchase small-area items in Moscow at public auctions.
In addition, in 2017, the amount of land plots for major construction sold at the city auctions has doubled: over 70 bidders expressed their willingness to purchase through auctions 31 land plots for major construction. The interest in the city land auctions is increasing due to the expansion of the land application range: auction winners can use the land to construct detached houses, multi-storey buildings, car service centers, industrial enterprises, warehouses, educational institutions, health facilities, etc. In total, 5903 property and land auctions for RUR 57 bn were held in 2017.
Currently, the Investment Portal comprises about 3,500 items of city real estate.
The Moscow Digest archive is available at the Moscow Investment Portal.