Money Growing: Transport Solves Everything

Real estate market experts name several places that are informally called new business districts, where a group of business centers with a shopping and sports-entertainment component is concentrated. These areas are Paveletskaya, Belorusskaya, Taganskaya, Sokol, Aeroport, Baumanskaya, Semyonovskaya, Frunzenskaya and Kaluzhskaya metro stations and of course Moscow-City and Nagatino i-Land. Actually, only the last two can be considered as central business districts, as they share the same concept of construction on one large area. The Moscow authorities have also announced Bolshoi City (Big City), which is currently being designed. But all business districts in Moscow, to various degrees, suffer from poor transport accessibility.

Plans and traffic jams

The construction of new highways will hardly increase the area of roads in the city. By 2013 an eight-lane Fourth Ring Road is planned to open. Probably, the same situation as with the Third Ring Road will repeat itself: it did not solve the problem – cars were still stuck on the same radial highways in traffic. An interesting innovation may be the construction of two belt roads, one which will pass to the north and another to the south of the Third Ring Road from northwest to southeast. It is possible they could provide a clear route from one side of the city to the other but bypassing the center. In 2009, the construction of the traffic light-free Bolshoi Leningradki, which runs from Manezhnaya Ploshchad up to the MKAD, should be completed. Shadow roads (roads that run parallel to existing roads) are planned to be built along Kutuzovsky prospekt, Volgogradsky prospekt, and a highway along the Oktyabrskaya railway is planned, etc.

Although the plans look good on paper, if you consider them carefully they appear to be useless. For example, Volgogradsky prospekt is one of the most problematic roads and has needed a shadow road for a long time. Traffic jams are particularly bad where Ulitsa Lyublinskaya joins it. But the planned shadow road will also join Ulitsa Lyublinskaya and in no way facilitate movement on Volgogradsky prospekt. And the general plan is full of such strange solutions.

According to the new general plan of Moscow until 2025, 440 km of metro lines will be constructed, and in the next four years 30 new metro stations should open. But practically all plans involve extending existing lines in Zhulebino, Solntsevo and Novokosino, rather than the construction of new lines. A new circle line and a new line Kapotnya - Nagatinskaya Poima, which will join the current circle Koltsevaya line, are also planned. But all of this is in the distant future.

Trams in European capitals also operate effectively. They are practically silent, much more comfortable as they are equipped with ventilation, air-conditioning, etc, and are more spacious, having 3-4 wagons. And most importantly, routes are organized on specially allocated parts of roads in tunnels and overpasses, which do not cross main roads. Thus public transport does not depend on road traffic. In Moscow, they also intend to create a high-speed tram network that will have lines separated from roads. In the next five years in the most problematic districts – the East and South-East – the first lines will be constructed: metro stations Ploshchad Ilyicha - Shosse Entusiastov - Novokosino; Kozhukhovo – metro station Tekstilshiki. Within the next 20 years there will be 12 high-speed tram lines with a total length of 220 km across all districts. The Moscow District Railway, which they have wanted to make passenger transport for a long time, should become another form of public transport in the capital.

Who owes who

Ideally everything is great: city structures are developing a transport scheme of the city in view of prospective business areas. But the city should find a solution for the transport situation as a whole: construction of the metro, roads, overpasses, the development of public transport, etc. And this is also why the city authorities take from developers a so-called share of the city. "In practice a developer usually includes a transport concept within the structure of a town-planning application to the corresponding organizations for approval,” says Andrei Nesterenko, general director of Capital Group Commercial Real Estate. “Subject to the necessity of constructing additional roads and entrances and exits and also parking for tenants, the transport conditions in nearby areas need to be taken into account. A developer usually involves external advisers in the project to create a transport scheme, and more often they are foreigners, as there are not many Russian experts. The research and design institute of the general plan also develops a special transport scheme as was done when the Moscow-City International Business Center was constructed. Experts model transport streams around the area, calculate car streams, draw up entrances and exits on the territory of the business complex, the width of roads, etc.

Developers often have to pay for some elements of transport infrastructure, for example changes to trolleybus routes and moving stations to lower the loading in the area, or reconstructing a tram depot, constructing entrances and exits, etc.

"If the construction of additional roads and overpasses is needed, the construction company can apply for compensation of such expenses from the city in an investment contract,” adds Nesterenko. In some cases the authorities agree, in others they don’t. Everything depends on relations and skills of negotiation.

For example, AFI Development’s project Tverskaya Zastava at Belarusskaya involves the major reconstruction of the square with the construction of huge transport infrastructure as stipulated by the city. According to Natalia Ivanova, director of the public relations department at AFI Development, the company itself offered to reconstruct the existing lay-out and the area. “Transport streams in the area of Belarussky vokzal currently exceed the throughput capacity of the existing road lay-out at times," explains Ivanova. As part of the reconstruction, seven pedestrian underpasses will also be constructed, some of which will lead directly to the underground shopping center. The traffic intersection will be ready at the end of 2009. The shopping center will be ready at the start of 2010. The provisional volume of investments in the project is $500 million. Large projects with complex transport infrastructure, according to Ivanova, make the most profit.

With the Nagatino i-Land project the city has taken more active participation. For example, an underground station at the business area is being construction from the city budget. With the Moscow-City project, practically all work on maintaining transport infrastructure was done by the city. Unfortunately, the absence of one directly interested owner in this project ruined the project.

Price is no object

Both the city authorities and developers explain the problems with the creation of adequate transport infrastructure by the high cost of these works. Russian roads cost, according to various data, 3-10 times more than European and Scandinavian roads. The climate only partially explains such an enormous difference; the main problem is simply the pilfering and inefficient technological process. In Europe, as part of the conditions of a tender, a period for servicing is stipulated, for example, in Germany it is no less than two years. For example, if you construct something badly - you repair it at your own expenses. In all other cases, transport infrastructure takes a much more modest place in the budget.

According to Andrei Petrov, a partner at Knight Frank, in the Bolshoi-City project the transport component makes up to 10-15 per cent of the total cost (not including the construction of the metro and monorail). The creation of a monorail line, incidentally, is not as expensive as it’s thought to be. "Manufacturers are prepared to provide the initial investments, but the constructer is obliged to provide passenger streams necessary for recoupment," says Petrov. You may remember that Mirax Group was going to build a monorail from their Federation Tower over the Moscow River, but could not guarantee passenger steams.

The more local the project, the higher the cost of creating transport infrastructure and the construction of underground car parks. According to Lyudmila Bocharova, development director at Ekoofis, it varies from 20-30 per cent up to 50 per cent of the total cost of the project. “Moreover, in some areas of Moscow, for example Paveletskaya, the close arrangement of subsoil waters makes construction of an underground car park considerably more expensive," she adds.

Moscow authorities are only now planning to take care of the transport problems, but the majority of developers do not consider it necessary to be engaged in it. "In Moscow there are practically no constructors who would pay close attention to transport," Petrov complains.

However the situation is changing. "Developers are more often aspiring to take part in developing areas to raise the appeal of commercial real estate premises, especially outside the Third Ring Road," Irina Dzyuba, sales manager at MR Group, notes. The success of a project is influenced by a good transport scheme that provides optimum transport streams, she is sure.

An inconvenient legacy

Traffic jams in a city center are an inevitable phenomenon and natural for all megacities, and harsh traffic in decentralized business areas is a specificity of Moscow, and an inheritance from the Soviet system of planning the city. In the suburbs of the capital, except for the southeast, there are practically no places of work, and at 7am everyone goes to work in the center.

The process of moving business activity out of the center that began about five years ago has led to the occurrence of bad traffic jams on radial highways. The construction of the Third Ring Road has promoted the construction of business centers in adjoining areas. But within a year the Third Ring was blocked and car streams came to a standstill on the same overloaded radial roads: Leningradskoye shosse, Komsomolskoye shosse, Prospect Mira, Shosse Entusiastov, etc.

The situation in the Southwest business district is much better. This area is making use of the great demand from companies renting business complexes in Profsoyuznaya, Kaluzhskaya, Vorobyovy Gory, etc. The main highways in this area - Leninsky Prospekt, Profsoyuznaya Ulitsa - are considered among the quickest in terms of passability. However there are still traffic jams here too.

In less favorable areas developers are compelled to pay greater attention to the transport problem. In relation to MR Group’s business complex project on Skladochnaya Ulitsa, located near Dmitrovskaya metro station, it has planned to construct a new underpass directly to the complex and new roads. For the large-scale business complex projects Fili-1 and Fili-2, which MR Group is realizing together with Central Properties, a set of measures to help solve the transport situation have been stipulated, including the construction of extra exits from the metro.

Nearby, at Kuntsevskaya metro station, AFI Development will realize a large multipurpose center project measuring 1.5 million sq.m. "The road junction near Kuntsevskaya demands more modern solutions. Therefore we offered the city a vision of development of the area, like at Tverskaya," says Ivanov. AFI intends to make a multilevel pedestrian-transport zone uniting existing and projected metro stations, public transport, car parks, and also retail premises. Above Aminevskoye shosse there will be a huge pedestrian boulevard with a retail component (250,000 sq.m). Also within the limits of the project is the construction of class A office space (1.3 million sq.m), a shopping center (53,000 sq.m), railway flyovers, and car parks (217,000 sq.m). Now in connection with the expansion of this territory work is taking place on updating the concept of the project.

Eastern and southeastern areas of the city are gradually starting to develop. Developers are planning sites near the future Fourth transport ring. But all so-called business districts lean on the existing transport infrastructure. Another approach has been applied to Moscow-City and Nagatino i-Land.

"City" without roads

The idea for Moscow-City appeared at the end of the last century. In the 1990s the first business center in Moscow was being designed, at the same time as Paris’s La Defance and London’s Canary Wharf started. But they didn’t use their experience completely. For example, the designers took into account the mistake with La Defance, which lives during the day but dies at night. But from the point of view of transport accessibility the Moscow-City project clearly falls short of the mark. La Defance started development with the construction of several tunnels and high-speed roads which connect it with other areas of Paris. With Moscow-City the infrastructure is not as advanced as the construction of skyscrapers. In Petrov's opinion, it was necessary to build the roads the city is planning to now, more than five years ago. For example, a project on the organization of transport streams on the territory of the business centre is currently being approved in the department for motor licensing and inspection. If you remember, Canary Wharf was not successful for a number of years. During the first phase of the project the level of vacant premises reached 50 per cent. But the situation changed when the transport problem was solved, the high-speed and convenient Jubilee underground line was constructed.

For Moscow-City much the same has been done: two metro stations and the Third Ring Road are being constructed. But there are already obvious problems even though only the first three towers have been commissioned. And by 2010 Imperiya Tower, Evrazia Tower, Mercury City and Gorod Stolits, with a total of 350,000 sq.m of office space, will be put into operation. Employees of tenants of the first offices in City take 20-30 minutes getting into the territory of the skyscrapers. "An incorrectly designed traffic intersection on the Third Ring has caused a bottle neck effect. There are traffic jams and the susceptibility of breaking down has increased," says Natalia Baranova, a marketing expert at GVA Sawyer. The mini-metro works inefficiently - trains come at greater intervals.

Perhaps the situation will change after the construction of an overpass onto 1st Krasnogvardeisky proezd, while simultaneously expanding it by 32m and increasing the size of new entrances onto the Third Ring in the area of Moscow-City, and after Shelepikhinskaya Naberezhnaya is lengthened and a left turn is inserted. Greater hopes are assigned to the central kernel of Moscow-City, which will unite metro interchanges, three metro lines and one mini-metro line.

But now, according to Petrov, seven of 10 potential tenants have refused to move to Moscow-City, and the transport problem will still not be solved. "In view of the fact that the transport infrastructure of the business complex was not thought out in detail at the design stage, good transport accessibility is already impossible for Moscow-City," regrets Baranova. But it is necessary to try to make it acceptable.

Nagatino i-Land in five stages

Moskovsky Biznes-Inkubator is building the Nagatino i-Land project on the former territory of the ZIL factory. There will be 35 buildings with a total area of about 1 million sq.m on the 32-hectare area. 100,000 people will work at Nagatino i-Land. Within the structure of the project are office, retail, exhibition, entertainment and sports areas. The provisional design cost of the technological park, according to Andrei Astakhov, general director of Moskovsky Biznes-Inkubator, is $1 billion.

According to him, when designing Nagatino i-Land the experience of Moscow-City, and also business parks in London and Shanghai, were taken into consideration. An advantage of this project in comparison with Moscow-City is an integrated approach to stages of construction. The first phase, on a 9.5-hectare area, will represent a complex of six class A and B office buildings (216,000 sq.m) and two car park buildings. This year the new Tekhnopark metro station) between Avtozavodskaya and Kolomenskaya) will open.

In total five phases have been planned, which also means parallel development of transport infrastructure. This includes construction of the embankment from Ulitsa Simanovskogo along the territory of the former factory to Pechatinkov, a bridge over the Moscow river, re-use of the road to Trofimova ulitsa and the Third Ring Road (was previously on factory territory). In the more distant future besides expansion of Prospekt Antropovov, construction of the Pechatinkov-Brateyevo highway and eastern shadow road on Varshavskoye shosse from the Third Ring to the MKAD is planned. There are plans to construct a highway along the Malogokoltsa Moscow railway from Sevastopolsky prospekt to the techno-park. The development of an accessible mooring within the limits of a government program on the development of water transportation is also possible. There is a future project for the use of Moscow’s railway network, in particular, railway transportation will connect Nagatino i-Land with other large business districts - both existing and those that have been announced: in the Frunzenskaya, Luzhnetskaya Naberezhnaya, Kozhukhovo, Dubrovki regions, the territories of the Moskvich factory, etc.

The city is only paying for the metro station and embankment to the techno park. Astakhov notes that the techno park is building roads on the territory and surrounding areas at its own expense.

Within the complex various types of transport will be used. In Petrov's opinion, the network of public transport in the territory of Nagatino i-Land will allow for there to be less parking places, help solve the problem of traffic jams and spontaneous parking.

Whether the public transport will be free or not for the employees of the business district is still an open question. Wither way it is necessary create a public transport network, Petrov is assured.

"Prospekt Antropov is already now one big traffic jam. What will happen when 1 million sq.m is put into operation? " asks Alexei Bogdanov, director of the office real estate department and partner at S.A. Ricci / King Sturge. In his opinion construction of the bridge and the shadow road n Prospekt Antropov will weaken the "pressure in the pipes," and expansion of the embankment should also help. Whether it will be enough for the business centre, market participants aren’t sure.

Taking into account how quickly the number of cars in Moscow is increasing and, in particular, transport streams in areas under construction, and also future centers and complexes the transport situation will not change radically, Baranova summarizes. It will probably only partially improve it through the construction of commuter car parks in the main transport spots of the city and access to the centers by high-speed public transport (metro, high-speed trams), he says.