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09.07.2013

Rent rates and penalties are the main tools that Moscow intends to use as motivation to force the industrial area owners develop these areas.

According to the NIiPI Genplan / Moscow Municipal General Architectural Planning Research Institute there are 7,839 ha of industrial area. Of them only 52% is used for industrial and research facilities whereas the remaining territories either carry old buildings which are offered for cheap office rent or used as junk yards, or just remain abandoned. The city lacks a clear industrial area development policy.  According to a Moscow developer, if an owner has been able to come to terms with the Moscow municipal authorities to approve the construction of commercial buildings in one area, this area gets developed. That is the reason why there just few industrial areas left in the city downtown where the real estate is the most expensive.

 According to Mr. Sharonov, the Moscow Government has compiled a priority list of 34 areas, however none of the area development motivation schemes has proved efficient. If no efforts are made, the industrial areas will deteriorate, Andrey Sharonov laments, since some of these areas are already turning into waist yards.

Alexander Ovanesov, Partner at Strategy Partners Group, calls this municipal approach too simplistic. The city should first of all decide which areas to keep as industrial and which – to redevelop.‘The city should set priorities and decide what they want to see become of the areas that have been used as industrial’, he believes.


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