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Tezh! — 09-11-2007 08:30:29
A panorama of part of the future site of Moskva-City, looking northwest over the Moscow River.
Big City, also known as Moskva City-2 and Novy Center, is one of the largest development projects in the world and on completion will be the largest office cluster in Russia, including business centers, residential development, retail premises, administrative buildings and hotels. Together with Moscow City it could well become Moscow's new central business district and, as such, the location of choice for all major corporations. The Moscow city government has thrown its weight behind the project and is boosting it further by restricting the construction of new offices in the historic center.
The scale of the project puts it on an equal footing with Docklands in London and La Defense in Paris. The site takes in parts of the western, northwestern, northern and central prefectures. Big City is bounded by Shelepikhinskaya Naberezhnaya to the west, Khoroshevskoye Shosse to the north, Ulitsa Sergeya Makeyeva to the east and Krasnopresnenskaya Naberezhnaya to the south. In total, the site covers about 1,000 hectares, which is comparable to the entire area inside the Garden Ring.
After planning approval for the Moscow City project was granted, the city government started to look at developing the neighboring industrial area, and the project came to be known as Big City. In early 2005 the city government issued a resolution concerning the wholesale development of the area adjoining Moskva- City and The Big City Company, an affiliate of developer Sistema-Hals, was set up to undertake it. $100 billion of investment is required for the reclamation of the area according to Sistema-Hals.
At present the future site of Big City includes both residential and industrial areas with approximately 100 industrial facilities located there, including the Proletarsky Trud metal components factory, a flour mill, a plant producing industrial construction materials and a sugar refinery among others. These facilities will be gradually relocated to sites outside the Moscow city limits to free up space for redevelopment, a very complicated process that will involve a huge amount of man hours and investment. Many of the residential properties will be renovated to meet modern standards or replaced with higher quality structures, while luxury residential buildings are planned for the right bank of the Moscow River near the Fili district.
Big City is expected to provide some 12 million square meters of premises, half of which Sistema-Hals has stated will be residential. The exact completion date for the project has not yet been determined, but it could well run for 10 to 20 years. This means that tenants and residents in the first projects will have to put up with working and living on a construction site where most of the infrastructure has not yet been completed. The same situation is already in evidence at Moskva-City. Therefore the developers will need to think very carefully about how they are going to plan their construction and the phasing of projects in order to ensure trouble-free access, parking and so on for the first tenants. But at the same time, the first projects will be in a more favorable situation from a commercial point of view, benefiting from the current high demand for office space. Projects such as Mirax Plaza on Kutuzovsky Prospekt, Legion IV on Ulitsa Kulneva and Don-Stroi's project on Zvenigorodsky prospect, which already have good access and will not be affected much by surrounding construction, will be most probably pre-leased quickly at good rents. If the right lessons are learned from Moskva-City, where the volume of traffic has turned out to be greater than that on which the planning of the road and parking system was based, then properties in Big City will be in high demand.
The area designated for development in the Big City project.
Office space in Big City
There are no existing Class A office buildings in the Big City area, although apart from industrial premises, the area does contain some Class B and Class C properties. Most of them were built prior to 1990 and although the facades of some of them have been renovated, many are now in poor condition again.
The adjacent table provides information, GLA and expected delivery date for nine major Big City office projects comprising approximately 2,000,000 square meters of multifunctional space in total.
According to the development plan, office clusters will be located along the following main transport routes: the Third Ring Road, Zvenigorodsky (Krasnopresnensky) Prospect and the ring railroad that links all the main lines running out of Moscow and runs near to the Third Ring Road for much of its length. Luxury residential buildings will be located on the Moscow River quayside.
The area adjoining Big City is relatively undeveloped and lacks any Class A properties. It consists of small Class B buildings of less than 5,000 square meters. Most of these were built prior to 2002. There are five Class B projects with rentable areas of more than 10,000 square meters: phases one and two of the World Trade Center, the Neftyanoy Alliance Building and phases three and five of the buildings at 13 2nd Zvenigorodskaya Ulitsa.
Planned improvements to the transport infrastructure to be made as part of the Big City project.
Planned new construction
This 368,000-square-meter development is located on prestigious Kutuzovsky Prospekt and on completion will provide Class A office space, as well as luxury apartments, cafes, boutiques and restaurants and parking for about 3,000 cars. Mirax Plaza will consist of two high-rise towers, 41 and 47 stories high, on top of ten-storey podium buildings.
Sistema-Hals intends to construct a 50,000-square-meter business center with underground parking at 7 4th Magistralnaya Ulitsa, scheduled to be delivered in the first quarter of 2010.
Ingeocom have a site on 1st Silikatny Proyezd used at present for the storage of building materials, although this facility is to be relocated outside Moscow in two to three years' time. The company intends to construct several multifunctional complexes with a total area of over 200,000 square meters on the 7.8-hectare plot. The exact delivery date is presently uncertain since the project is still at the planning stage, but has been preliminarily scheduled for 2015.
The Class A Legion IV business center will be located on the opposite bank of the Moscow River to Moskva-City on Ulitsa Kulneva, near the intersection of the Third Ring Road and Kutuzovsky Prospekt. The high-rise structure of Legion IV is designed to echo the skyline of Moskva-City and will have a total area of 85,000 square meters, a restaurant with panoramic views and multi-level parking.
The 1.12-hectare site for this project is located near the Third Ring Road and ring railroad. Upon completion of the new section of Zvenigorodsky (Krasnopresnensky) Prospekt, running from its interchange with 1st Magistralnaya Ulitsa to Ulitsa Mnevniki and Prospekt Marshala Zhukova, the site will be easily accessible from the city center. It is located in the first line of buildings in the immediate vicinity of exits from the transit bridge and the interchange in the area of 1st to 3rd Silikatny Proyezd. The business center will be 10 minutes by car from Kutuzovsky Prospekt, Leningradskoye Shosse, the Third Ring Road, Moskva-City, the federal government building on Krasnopresnenskaya Naberezhnaya and the mayor's office on Novy Arbat.
Don-Stroi intends to build a multifunctional complex with retail and office space as well as a cinema center of approximately 267,000 square meters on a 5-hectare site on Zvenigorodsky Prospekt. One of the towers making up the complex will have two levels of underground parking. Don-Stroi also owns a 3-hectare land plot located close to 5 Zvenigorodsky Prospekt, where the company plans to build a multifunctional complex with a residential component. Together, these projects will bring an extra 680,000 square meters to the market.
On December 28, 2006, Storm Properties received approval from the city government's urban planning commission to develop a 160,000-square-meter office project at 8 Prichalny Proezd. The investor is MZhK, part of the Bouquet Group of Companies. Members of the commission have commended the work of Rezerv, the project's architects, who designed the complex to take account of the city government's future plans to construct a new highway and an underground station in the vicinity. Implementation of this plan will significantly increase transport accessibility to the site both for private vehicles and by public transport.
PIK Group is planning to build 200,000 square meters of office and residential space on the 7-hectare site of the Krasnopresnensky sugar refinery. The developer has bought 98 percent of the shares in the plant located on Ulitsa Mantulinskaya. Guta Group and the city government were interested in acquiring shares in the plant, but despite their attempts PIK won out, Vedomosti reported in August last year.
Wimm-Bill-Dann is planning to build an office and residential complex at 40 Shmitovsky Proyezd, on the site of city flour mill No. 4. No information about the amount of floor space or any other specifications were available at the time of writing.
The success of Big City hinges on a well developed transport and infrastructure system. The transportation system in the Big City area will be improved in order to enhance transport accessibility, as detailed on the adjacent map. According to Sistema-Hals, this includes building anew or reconstructing over 80 kilometers of roads in the Big City area.
In addition to new roads and bridges, the development of Big City includes plans to extend the existing mini-metro line from Mezhdunarodnaya station to link up with the Tagansko-Krasnopresnenskaya line, with a new interchange station being built alongside the already extant Polezhaevskaya station. Construction has not yet started and the planned completion date is not currently available. Water transport will also be developed with the construction of a new wharf on the Moscow River. Several helicopter pads are planned to provide VIP passengers with transit to international airports.
The long-term outlook
Only a small selection of all the projects that will eventually be built in Big City has been discussed here. There is some concern among industry players that the quantity of new construction will oversupply the Moscow market, and some developers will have problems finding tenants. It is difficult to predict right now how the situation could develop. The projects are mostly scheduled to come on stream at different times and most probably many of them will be delayed in any case. Moreover, the demand for quality space is continuing to grow, as new companies arrive on the market. Established Russian and foreign corporations are expanding and many existing tenants are looking to move into better quality buildings from their current location. Therefore developers planning to deliver buildings in the next few years should pay a lot of attention to the quality of their products: parking and infrastructure, efficiency and flexibility of their premises, the professionalism of their property management and technical maintenance. Competition is becoming more aggressive and in several years' time just being able to deliver a building of such-and-such a class will not be enough on its own. For example, the developer of the Park City project on the site of the Badayevsky brewery on Kutuzovsky Prospekt (which doesn't fall within the bounds of Big City, but is nonetheless located very close by) is investing a lot of time and effort in properly planning the project, hiring the best consultants, and putting in good infrastructure. Park City is practically the first master-planned project on such a large scale in Moscow to be undertaken by a single developer. Although this has required long preparation and several changes of plan, this will pay off in the long run, after the project has been officially brought on stream and during its life-span on a changing market.