Investment Management and Real Estate

The real estate sector in Russia is experiencing significant challenges as the effects of the global credit crisis continue to make themselves felt. International debt finance for new development projects has all but dried up and a number of the industry participants are encountering challenges in drawing down on and/ or servicing existing facilities to finance current development work. The cost if finance is rising, as are vacancy rates. There is evidence of downward pressure on rental rates for office space and the residential market has witnessed a significant decline in sales volumes and is beginning to evidence some softening in prices as some developers are forced to lower prices to stimulate sales.

These trends have led many developers to significantly revise their strategies with the accent now being on suspending new development projects, finalising active projects, sourcing new funding options, managing operational assets and looking for opportunities to rationalise their operating structures and cut general and administrative expenditures.

Whilst transactions are still taking place the volumes have significantly declined and the general market sentiment is that this trend is likely to continue into late 2009.

PricewaterhouseCoopers has a network of specialists comprising global knowledge with local experience who can help investment managers and real estate companies to turn challenges into opportunities in key areas including governance, risk management, financial reporting, cost cutting and operational effectiveness, raising capital and business development strategies.