Russian Re-boom Coming: Time to Invest? And what sectors.

Let us understand that the Moscow real estate market is still doing well with residential rents still high. And  regarding premium office rents, many of the contracts were written in euro or dollar terms . That is after crushing massive sanction blow salvoes sent out by Obama and Europe. Of course, secondary and peripheral markets have been looking poorly from a trend analysis.

http://ru.investinrussia.com/data/files/sectors/EY-Real-Estate-Trend-indicator-Russia.pdf

So as oil prices recover and with Trump coming to power can you imagine the leverage one will get on cheap rubles bought now and invested in decent properties especially in regional cities connected to commodities like oil. The profits may start looking good even in the higher quality of the secondary markets.

One should never forget  be it from  Azerbaijan to Kazakhstan, both ex Soviet republics and far off internal republics of Russia have retained valuable contacts with Moscow. It is the key cosmopolitan city of Europe to the many rich from the regions albeit the very super rich have places in London and other main cities on the continent.

In the face of western hostility particularly from Obama and Merkel’s Germany and well beyond, Moscow  still remains the most cosmopolitain European city of sanctuary to many well-off Russians and  those of allied ex Soviet states.

But yes much money from them has left Russia in recent years but this is  likely to turn around on the short to medium term with a vengeance when opportunity strikes.

The savvy western investor with good Russian partners still has the opportunity to enter particularly the real estate market though possibly too late for the Moscow stock market. Ihave contacts there who can be helpful developed over two years living in Moscow.

However, this is not a market for those who see Toronto or Sydney as not being safe enough. Returns can be high for the risks taken in Russia, though.

Yes this is anecdotal and impressionistic. More information can be obtained for consultancy fees plus underlying research. Try this though.

E.ON Russia JSC – Annual Report, April 2016

 

 

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