The Real Estate Sector: Waiting for First Quarter ‘09 To Pass

President's Letter

Holding on to Key Business Values During Challenging Times

Most of the articles in this issue of AmCham News, written by experts, analysts, and people from a wide spectrum of businesses, contain a reoccurring theme: that the first part of 2009 is going to be tough for most businesses operating in Russia. Among different sectors, the level of concern may vary, but everyone is preparing for the first quarter.

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Issue Contents

• President's Letter
  Holding on to Key Business Values During Challenging Times
  Most of the articles in this issue of AmCham News, written by experts, analysts, and people from a wide spectrum of businesses, contain a reoccurring theme: that the first part of 2009 is going to be tough for most businesses operating in Russia. Among different sectors, the level of concern may vary, but everyone is preparing for the first quarter.
• Retrospective
  Listening to the Winds of Change
  A popular song chronicled the beginning of a new country and described a sense of optimism and hope for the Russian people several years ago: Follow the Moskva, down to Gorky Park, and listen to the winds of change…
• Marketplace
  Transparency and Disclosure by Russian Companies 2008: Insignificant progress as the number of IPOs plummets
  Executive Summary The Transparency Index, calculated as the average score for the 90 largest public Russian companies, grew to 56% in 2008 versus 55% in 2007, according to the study. In the group of 71 companies covered by the study both in 2007 and 2008 the score has grown by 2.5 percentage points (“p.p.”) to 57.7% in 2008 versus 55.2% last year.
• Darkest Before Dawn: Preparing for a Tough First Half
  Conditions in the Russian economy are deteriorating and will get worse before stabilizing, hopefully, in third or fourth quarter of next year. The equity market will remain weak, with volatility driven by a combination of domestic news and the trend in global – especially emerging – equity markets and commodities. But the valuation of most of the blue-chip companies and corporate debt issues are now pricing in an even worse-case scenario.
• The Impact of the Strategic Sectors Law: Six Months in
  Last May, on the day Mr. Medvedev was inaugurated into office as President of the Russian Federation (RF), the long-anticipated “Law on Foreign Investment in Companies with Strategic Significance for National Security and Defense” (the “Strategic Sectors Law”) and Federal Law No. 58- FZ amending certain other Russian laws to give effect to the Strategic Sectors Law (the “Amendments Law”) came into effect.
• Real Estate Sector
  The AmCham Real Estate Committee
  The Real Estate Committee of the American Chamber of Commerce in Russia is a vital part of our sector’s business community. It is a forum in which we can address the many relevant issues in our industry.
• Buying and Selling Real Estate in Russia: VAT And Profit Tax Concerns
  Although Russian real estate is becoming an increasingly popular target for investors and businesses alike, Russian legislation is still unclear on how transactions involving real estate should be taxed.
• Hiring Within the Real Estate and Construction Sectors: Sitting on a Fence
  This id a quite a difficult period in the construction and real estate markets because of the international economic situation. Development and construction companies, as well as investment funds, are freezing projects or cancelling them altogether.
• Moscow Office Snapshot: Forecast 2009
  One of the effects of the credit crunch on the Moscow office market has proven to be a lack of financing for current projects under development. Due to the uncertainty surrounding the delivery schedule for office space, CBRE Moscow has checked each property announced for delivery during 2009.
• Missing Opportunities: The Critical Need for Infrastructure (Outside of Moscow) and the Development of the Russian Economy
  In many ways infrastructure is the foundation of economic development. As the Russian economy and real estate sector experience their first slowdowns after more than seven consecutive years of growth, it is a good time to look at how infrastructure fits into Russia’s growth and economic diversification goals and to address clear needs in the years to come.
• Crisis Offers Opportunities for Re-assessment of Building Design Process
  After a long period of sustained growth the recent events on world financial markets have re-focused attention on quality. Investment funds are hovering to take advantage as highly leveraged developers and owners look to offload distressed real estate assets at lower prices.
• Regional Profile
  Novgorod Oblast
• Regional Briefing with Deputy Governor Alexander Gabitov
• Q&A with the Governor of Novgorod Oblast, Sergei Mitin
• Regional Briefing with Vladimir Oblast
• Corporate Social Responsibility
  Big Role Models: Big Brother Big Sister
• Policy Events
  Deputy Prime Minister Meets with AmCham Members To Discuss Olympic Investment Opportunities
• AmCham St. Petersburg Annual Labor Market Seminar: Handling HR in Tough Times
• Moscow HR Conference
• AmCham’s Annual Tax Seminar Addresses: Tax Reform in Russia
• Social Events
  Annual Holiday Party
• Committee briefs
  Committee Briefs Moscow (Autumn 2008)
• Committee Briefs St. Petersburg (Autumn 2008)
• Off-The-Wire
  Off-The-wire
• Welcome Aboard
  Welcome Aboard