(Source: Globe Street)
Nearly 85% of all Moscow commercial real estate projects are frozen and 78% for St. Petersburg, while the number put on hold is increasing every month in both cities, according to research by the magazine-portal the Bridge.
The development stop is mainly caused by the sharp slide in demand and lack of available funding, particularly from banks. For developers, loans are nearly out of reach and annual interest rates of 20% to 25% prove absolutely unprofitable for developers. As well, the number of companies able to go through the procedures necessary for getting a loan has decreased by a factor of about 10 this year.
Read Allan Saunderson’s full article “85% of Moscow RE Construction Projects Now Frozen” in Globest.com (September 8, 2009).