One of the ways to finance RE here is through investment companies with 5-6% rate up to 7-10 years. There are also other ways, however seller financing is not common in Russia.
The demand on office spaces here are very high and supply is low, so the prices permanently rise. Several large office complexes will be opened soon, but they will not fulfill the demand.
ROI on the average deal is about 7-15%. You can find a lot of such deals here. But if you spend some time for a search then you can find more profitable ones.
Now we negotiate about the office building that after fix-up will give 30% ROI if you want to hold it, and 350% ROI (before-tax) if you sell it a year later.
I don’t know much about foreclose RE as we haven’t worked with it.
If the lease contract is finished and tenants don’t want to go away then the eviction can take up to several days after you ask your management company to move them out.
The liquidity of Moscow RE very much depends on the condition of buildings, the district of the city, etc.
My company works in Moscow and is interested in buying large commercial real estate here. However these are our first steps.
We found several good opportunities and began working with russian investors and banks. However we also consider the cooperation with foreign investors and banks as the important part of our project, for they have a lot of experience and knowledges in real estate investing.
I’d like to ask whether US investors, banks and mortgage companies are interested in real estate of Moscow?
And if so how we can get into touch with each other?
Re: Cooperation with Russian company? - Posted by rdjlazo
Posted by rdjlazo on February 05, 2005 at 22:09:33:
i will doubt it very much that you can convince U S investors will invest in Russia. Specially people on this board. You have to educate us a lot before somebody will touch Russian RE. How liquid are RE assets there? How do you finance Comml RE there? What rate,term, qualifiying borrowers?
What is the value RE apreciation there?
What kind of return of investment do you predict?
How do you forclose RE there? How long does it take?
How do you evict tenants there? How long does it take?
Hard enough for us to invest in another state here, how much more in another country. Control and exit strategy will be a very big issue.
Good luck,
RDJLAZO