Guiding Lines: Ring Road Experiment

The project in question was launched by Vassily Anisimov’s investment firm Coalco and the International Consulting Center (MKTs), who have set about building the class A Greenwood business park at the 71st kilometer of the Moscow outer ring road, or MKAD.

The plan envisages development of a 130,000-square-meter estate comprising 13 office buildings, each – with floor space ranging from 3,000 to 12,000 square meters – designed to house one tenant.

The business park will also feature a hotel, residential quarters, a fitness center, bank branches and other facilities enabling business people to optimize their work schedules. Realtors have immediately branded Greenwood a pilot project, as so far there are no large business centers near the Moscow ring road. The only facility available in the area is Country Park, a small business center in Khimki, situated within 0.5 km from the ring road, largely regarded as unsuccessful.

The 16,000-square-meter Country Park was commissioned by the Race-Сommunications company in February 2004, and since then as much as 200 square meters of its office space has remained vacant, with landlords having failed to attract tenants. And Greenwood has over 100,000 square meters of office space to offer!

However, Coalco and MKTs seem to be undeterred by their rivals’ failure. On the whole, their motives are clear. Developing office space in Moscow is time-consuming and costly.

Securing construction sites for such projects requires either the removal of industrial facilities or the demolition of dilapidated residential blocks, whereas in the Moscow Region, outside the ring road, unencumbered vacant sites are still available and land is cheaper. It is just that office tenants don’t seem to care much about the investors’ considerations.

They take much more interest in their own comfort and convenience. Many companies are reluctant to move even any further than the city’s inner ring (Third Ring Road). Needless to say, they will hardly be tempted to move beyond the Moscow outer ring road. Lower rental rates are perhaps the only argument that may prompt a firm employing 600 to 800 workers to relocate to the suburbs.

But the saving should be no less than 30-50%. It must be tempting to pay just $350 for a square meter of class A office space, instead of $1,000. At the same time, Western office developers have long been moving further out to the suburbs. The only difference is that the majority of corporate employees in developed countries get to work by car, not by bus and then metro where they have to change lines at least twice.

A Russian living somewhere like Vykhino, in the south-eastern outskirts, will not hesitate in making the decision to quit instead of facing the prospect of traveling to and from Khimki (north-west of Moscow) every day. Thrifty tenants could end up losing at least 30% of their staff almost straight away after a move.