On November 9, experts and analysts discussed in the office of RD Construction the specifics of the loft apartments market in the Russian capital. The discussions were part of the conference “Living in Lofts: All Specifics and Target Audience”, organized by the Expert Board for Redevelopment under RGUD, with support of RD Construction.
Residences in the loft style first appeared in late 1920s in Manhattan during the years of the Great Depression. In those days a lot of manufacturing companies went bust and former factory shops and storage facilities were transformed into housing. Representatives of creative occupations were among the first to take interest in this type of residential premises, since they were attracted by large areas which could be used in different ways – as studios, workshops, rehearsal halls, etc. In Russia loft apartments became popular almost 100 years later and this real estate market segment sees rapid development in Moscow and other places. The present and the future of loft apartments was the main topic for experts to discuss at the conference.
The event was opened by Alexei Strekalov, architect and partner of DUOARC, who reviewed Moscow’s industrial zones, analyzed the functional zoning and assessed most promising zones for various types of property to be placed there. As was estimated by DUOARC, most promising are parcels inside 8 industrial zones covering the total of 270 hectares (Varshavskoe shosse, Yuzhny port, Degunino-Likhobory, Bratsevo and others). The process of urban regeneration there can be launched during the next 5 years. It is possible to erect up to 3.5 million sq. m of housing and apartments of all types and classes in the said territories, with classical lofts in old buildings accounting for no more than 100-200 thou sq. m.
The topic was further elaborated upon by Boris Yushenkov, coordinator at the Center for Applied Urban Studies (SPb), who delivered the report “How Urban Sociology Can Help Industrial Redevelopment into Lofts”. Mr. Yushenkov pointed out that 40% of “common” denizens are ready for experimental dwelling in lofts, especially if a developer creates good neighborliness conditions and “embeds” certain cultural codes in a particular project.
Alexander Shibaev, Director of Consulting, Analytics and Research at Blackwood, mentioned the problems with classification of lofts. Blackwood experts proposed to peg the classification to the Dictionary of RE Terms, earlier published by the Expert Board for Redevelopment.
Karine Shmareva, CEO Intermark Serviced Apartments, graphically showed how loft apartments could become an investment product, when managed by a professional company ensuring stable cash returns for the owner in case of a long-term contract. The approach of Shmareva sparked the interest among the conference participants, due to a high possible yield, and roused many questions from the audience. Following a short discussion, Karine invited all those interested to have a full-fledged investment model calculated for them on an individual basis.
Vyacheslav Antropov, Development Director at Contact Real Estate, told about the demand for loft apartments in Central Moscow, having noted that those buying this property in Central Business District are little different from other elite property buyers, giving preference to exclusive single offers. The prices on lofts are comparable to those on projects of other classes in Central Moscow.Dmitry Cherny, Head of Projects with MIEL-Novostroyki, expressed his confidence that there can be no demand for loft apartments outside of Central Moscow. He matched the average size of the loft apartment standing at 100 sq. m with the average asking price of 250,000 rub/sq. m and concluded that this price is too high for districts outside of Central Moscow.
Alexander Poduskov, Loft Development Director at KR Properties, defended the opposite view and showed his company’s new project near Danilovskaya Manufactory with residential units ranging from 60 to 100 sq. m, opposite the ZIL territory. The planned sale prices are in the 160-180 thou rub/sq. m bracket. The company is entering the site already in spring 2017.
Experts agreed that because 30-40% of those residing in lofts are family couples with kids, it is necessary to fashion playing grounds and commercial daycares in close proximity. On the whole, there is a definite prospect of developing some sites at quite a distance from the center, but only if a multifunctional environment is created as the key approach to their development.
Not in vain was the office of RD Construction chosen as the venue for this event, given that one of the company’s key competences is redevelopment. RD Construction initiates and organizes events for the professional community on a regular basis, while the conference theme – formation and development of the loft housing market – is one of the results of industrial redevelopment.