Measures of state support to stabilize the activity of Moscow developers

17.03.2016

State support measures should be introduced for developers that proved to be stable actors on the real estate market, said the Chairman of Moskomstroyinvest (the Moscow Committee for Realization of construction Investment Projects and Co-Investment Agreements) Konstantin Timofeev at the International Exhibition of investments and real estate MIPIM-2016, which takes place in Cannes, France.

According to him, it is necessary for developers in order “not to fail their investors”.

“In Moscow, the investors of 99% housing construction are citizens, construction of commercial real estate is conducted by banks as investors,” Konstantin Timofeev said.

He noted that in the current economic situation some developers can withdraw from the market. “And we have to understand that these are not the strongest of them. It’s kind of a commercial shortlisting,” Konstantin Timofeev said.

According to the Chairman Moskomstroyinvest, the main problem is the quality of management of development companies. “Analyzing the experience of the Committee’s work with developers, we can say that the major complexity arise from bad choice of management teams and inconsistent distribution of financial flows. Often companies do not submit the required amount of funds for the further development and formation of capital reserves,” added Timofeev.

It can be recalled that the Moscow government is implementing measures to support the developers. Many of them were adopted in 2015. For example, the procedure for determining fees for change of permitted use of land and the provision of payments by installments to the city budget has changed.

Transfer of 12 state services in electronic format became an important step; it contributed to the transparency of governmental agencies and reduction of administrative barriers.

In order to support developers, the Moscow Mayor Sergey Sobyanin decided to revise the “paper” projects and allow building housing instead of offices, in case this is not contrary to the urban development of the city.

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