Russian real estate is the best investment

MOSCOW. (RIA Novosti economic commentator Mikhail Khmelev) - Investing in real estate is one of the most attractive and profitable ways of making money everywhere.

Now experts are pointing to the Russian property market as a good place for investors to put their capital. The commercial real estate market is considered to be the best option.

In 2006, deals involving office space in Russia made up almost one-quarter of all transactions in eastern and central Europe. In 2007, experts predict that the value of the Russian residential and commercial property business will leap to 11 billion euros. An investor's profits from real estate operations, depending on the type of investment, could vary from 8.5% to 35% per year.
In 2006, investment in commercial real estate worldwide totaled $643 billion (487 billion euros). According to Cushman & Wakefield, a real estate agency, they rose by one-third last year to a record high. The agency forecasts that world investment in real estate will grow in 2007 to $681 billion, with half of it in Europe.

European property has been described as the best investment opportunity compared with other continents. Its estimated returns exceed profits from international and European securities, as well as from U.S. real estate and securities. Experts predict that capital movement will change, too. Instead of direct investments in the purchase of real estate, investors will be putting their money into real estate investment funds.

Russia, and particularly the Moscow real estate market, has, according to major developers, become the world's third largest market after London and Paris. Forecasts by DTZ Holdings, a consultancy, indicate that the value of commercial property deals in Russia in 2007 will reach 5 billion euros, compared with 3 billion euros in 2006 and 1 billion euros in 2005.

Investments in this sector are divided practically half and half between retail and office space. According to Cushman & Wakefield, returns on office investments at the end of 2006 in Moscow were around 8.5% per year, while space rented out to retail stores yielded as much as 9.5%. By 2009, profits in this segment may come down to 7% or 7.5%, but even in that case they will be higher than in Western Europe, where commercial real estate investment returns are only 4% per year. read more

From Novosti