Guiding Lines: Residences on the Outskirts
As regards business parks providing only office space (without manufacturing facilities), there are already several examples of such projects developed on the outskirts and beyond MKAD, and those have proved quite successful. The town of Khimki has Country Park (18,000sqm), raised in early 2004 by CityPro and Race Communications. Country Park’s tenants are BMW Russland Trading, Real Hypermarket, Metro Cash & Carry, Nokian Tyres and Volvo Trucks.
In 2006, so much was said and written about business park formats, industrial and technology parks that certain analysts even pinpointed that tendency in their surveys. But then, the idea to pursue office projects on the outskirts still has many opponents.
Office market decentralization is in full swing in the capital. Business parks are becoming increasingly popular, although their role on Russian market is still debated. At the same time for some reason property consultants refuse to admit that as a result of decentralization and development of new formats business parks are likely to move to the outer side of MKAD, and even farther on, to the countryside.
Those offices do not necessarily have to be low-grade and house only technical staff. The market, it seems, has split up into two camps. Skeptics claim that company employees who live in Moscow will experience difficulties in getting to their offices situated on MKAD, especially those who do not have a car. High-paid professionals who live in the Moscow Region work in the capital, for the most part.
As the market is growing saturated office rents and sale prices on MKAD will of course near Moscow levels. But at the same time they are not likely to grow as quickly as in downtown area. Besides, the schemes on the outskirts will require building the entire engineering infrastructure from scratch. Payback on those properties given low take-up by would-be tenants and specific of their operations may prove quite long. And while the cost of a parking facility on the outskirts is much lower as compared to similar projects in central locations, organizing transportation service for employees from a metro station to the office building will require extra spending. As an example of a failed business park they often cite the project on the Nagatino Island, the territory of the former Likhachev car plant ZiL where the government had once pledged to develop some 1 million square meters of new offices. Even 10,000sqm have not been built yet.
In truth, business parks have never been launched not because their construction stalled but because those projects, just as the format itself, became really popular only recently. Moscow, even if not without certain national specifics, follows the path of development of all foreign markets, such as London, New York, Warsaw and many other cities. But while in the early stages Russia saw arrival of foods and home appliances manufacturers, today production facilities in this country are being launched by car makers and construction companies. Namely IT companies will generate demand for quality office space to house their rank-and-file employees. But Moscow will not be able to meet that demand. That is why office parks will have to be raised outside the capital. Workforce will be hired among local residents.
In economically successful towns and districts of the Moscow Region we are beginning to see confirmation of that. For example, Domodedovo District’s economy is growing owing to the international airport operating in the area, and also owing to a major trunk road, one of the strategic transportation routes of Russia, linking the capital to southern provinces. In the vicinity of the town of Domodedovo several major warehouse projects and freight terminals have already been launched by Moscow-based developers. People employed by those companies are Domodedovo residents, hired on a competitive basis as the area is still short of jobs.
The Moscow Region’s government plans to develop a vast industrial territory near Domodedovo; in the long term the authorities plan to build four such areas – in the north, west, south and east of the region. As to the population of Domodedovo, which currently has 100,000 residents, the local government hopes it will double as all the companies who will establish their presence there will need professional staff to operate their businesses. Nowadays, almost all projects underway in the Moscow Region provide office space.
Offices at Krylatskiye Kholmy in the district of Krylatskoye are rented predominantly by international brands Microsoft, Intel and Sun Interbrew. Top executives of those firms also work in Krylatskoye. Offices are let at up to $600 per 1sqm, which is comparable to rents on Tverskaya Zastava Square.
It has to be kept in mind that the Moscow Region and MKAD have successful and unsuccessful spots. For example, Krylatskiye Kholmy’s success was predetermined by the compound’s proximity to Krasnopresnensky Prospekt Street which is to link Novorizhskoye Shosse to Krasnopresnenskaya Naberezhnaya [embankment]. The road will have no traffic lights and lead to downtown Moscow. Country Park, on its part, stands at the intersection of the Moscow-St. Petersburg motorway and MKAD.
Greenwood business park will soon be launched by Coalco at the 71st kilometer of the Moscow outer ring road, or MKAD, between Leningradskoye and Volokolamskoye Shosse. The 20-ha compound comprises 13 buildings with a total area of 130,000sqm. Aras Agalarov builds a 1.5 million sqm office park in Crocus City. Ikea develops Ikea Business Park in Khimki (100,000sqm), Khimki-9; Rezidentsiya on Rublyovo-Uspenskoye Shosse will soon be finalized (21,000sqm).
Centurion Group is building the business park Western Gate at the intersection of MKAD and Mozhaiskoye Shosse, 170,000sqm. CMI Development plans a 100,000-sqm office center in the City of Millionaires in Rublyovo-Arkhangelskoye, 3 km from MKAD on Novorizhskoye Shosse.