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Tverskaya Street is the Most Profitable Place for Retailers
May 24, 2011 14:47

The Forbes has researched the deal over Moscow's major avenue. Tverskaya street is a profitable place, it's an "eldorado" for retailers. But who owns Tverskaya street?

"According to our data, there were only three buy-sell deals of placements on the first floors of Tverskaya street buildings over the past ten years. This is the most well-known street of Moscow and the most expensive, it has been shared out years ago and now nobody wants to loose a profitable place", — says Alexander Isaev, broker Realtor of UBG company, which works with the real estate in the centre of Moscow.

If we look at the pictures of the street from the Soviet Era, we will see, that there were a lot of roadway trees on it and it was not crowded. It was reconstructed about sixty years ago, the street was build up with edifices with shops on the first floors — the rooms were made for trade standards: six-meter ceilings and large windows. The shops and cafes has been occupying their premises on the basis of warrants, issued in 1970. Since the beginning of market reforms, the store personnel headed by their directores, started to create rental companies or limited liability partnerships and Moscow authorities have issued new documents for leasing.

The companies, created by employes of trade, became the owners of "golden meters". Women's team of "Moloko" shop headed by Alexandra Talakina, 60, as privatizers, that means actually for free, obtained 390 square meters in the building number 15. Now these spaces cost about $20 million.

There were lots of privatization deals. Some areas were fragmented and passed into private hands in parts. The most popular areas were former Soviet stores.

Russian businessman Yakov Yakubov has many names. He is 70 years old and he avoids mass-media. He doesn't register companies for himself, all his real estate is owned by offshore companies or by people from his team (lawyers, accountants, assistants and advisers). He decided to buy as much space on Tverskaya street as possible and now he ownes the largest real estate and the best houses on the street. We are talking about buildings number 4 and number 6 in the very beginning of the street, situated next to the State Duma and Moscow Art Theatre. The pedestrian traffic here is the biggest in the city, according to special researchings, more than 50 000 people per day passes by this place. According to Penny Lane Realty, here are the highest rental rates that amount up to $10 thousand for the square meter per year.

In real estate deals Yakov Yakubov uses the same scheme: he buys stocks or shares from store employees. There were some cases of active resistance of top managers, but they ended with the victory of Yakubov.

According to the Managing Director of UBG company Alexander Sankin, the area of premises suitable for trade is about 50 000 square meters on Tverskaya street. Retailers are most interested in places from Kremlin to Pushkin Square, it's about 30 000 square meters. Rents range here reaches $13 000 for square meter per year, stakes sale reaches $120 thousand per square meter. Anyway demand for space on Tverskaya exceeds supply. One advertising banner costs $10 thousand for 10 days.

Real estate business "players" go to any tricks of the trade to get at least a few meters on the street. Tenants of the house 17 complain that one businessman has managed to privatize six-meter space under rubbish chute and pass it to the ownership of a Cyprus company.

"An increase in rental value happened first of all because the supply on Tverskaya Street is limited. Second, Real estate development in Russia has been rapid and Tverskaya is now the main street of the entire country, pushing up demand. That is why rent here is the highest. Every retailer wants to have a shop on this street," says Maksim Gasiev, Regional Director of Colliers International in an interview to RT.


Author: Ksenia Dzhalagonia

Tags: Russian business Moscow Russian trade   

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