36 | THE RUSSIAN REPORT Advice for agents WORDS | Market opinions
Russia: uncorked
OPP has grilled a group of agents and developers for their tips and advice on how to sell to the Russian overseas property market.
How do you think the recession has changed the Russian buyer market … in terms of attitude?
“The key for Russians is quality; they are more informed about property than they were ten years ago, and for many, the UK domestic product is simply not good enough. As such, we are aware of international property funds being set up to develop high quality residential mansions in the Home Counties, in particular, Surrey, which is also popular with Russian buyers, specifi cally to meet their needs and high standards.” Andrew Giller, Partner and Head of London at The Buying Solution.
“In the early days of the crisis we saw a substantial increase in buyers for lower priced property. They were scared about the security of the banks (most collapsed in the crisis of 1998) so they withdrew their savings and bought into the safety of property. The middle market is now moving substantially with increases in enquiries for property up to €1.5 million. The high end of the market generally continued during the crisis. Whilst the plight of many oligarchs were headline news, many clever business people understood the opportunities and continued to make their purchases especially in London, New York and Miami.”
Kim Waddoup, CEO, A I Group.
“We see less interest in off plan projects because clients in the recent past have experienced delays and cancellation. Russian clients become very cautious about the reputation of the developer and the agents with whom they are dealing. We have also noticed a trend for Russian clients to do their own due diligence on the location and its investment potential.” Alper Apaydin, managing director, Advantage Properties International.
“Business activity is increasing because Russian’s are encouraged by the weak pound and long-term capital gains, particularly as Prime London property was least affected in the downturn. As such, it is deemed relatively safe for those who wish to expand their investment portfolios. The key for Russians is quality; they are more informed about property than they were ten years ago, and for many, standard domestic product is simply not good enough.” Andrew Giller, Partner, The Buying Solution.
... in terms of budgets?
“Russians are very much in the prime Central London property market place at the moment, encouraged by the weak pound and long term capital gains,
particularly as Prime London property was least affected in the downturn. Budgets range up to £30m, and the type of property requested varies from lateral fl ats to good houses on garden squares. Russian buyers do not restrict themselves to renowned areas such as Mayfair and Belgravia, as Middle Eastern buyers tend to do, but will also consider locations such as Notting Hill and Chelsea, for example. Andrew Giller, Partner and Head of London at The Buying Solution.
“I fi nd that Russian clients with budgets of €250k plus are serious players and - when they see something they like - they have no problems in moving forward. Towards the end of last year we received a lot of low budget clients, between €100k and €150k, and they were not so serious. To be honest, they were a complete waste of time.” Richard Hazel, director, Windrush Alliance.
“More and more clients go for investment projects that will give them guaranteed rental yield security bonds. For example, the Antalya Sea by the Mountain residence project enables the client to put down a 30% deposit and take the rest as a 70% loan (for which low interest rate LTV Euro mortgages are available). The starting price is €62k and the client gets 5 + 5 years
9% per annum guaranteed rental yield security bonds.’ Alper Apaydin, managing director, Advantage Properties International.
“Budgets are definitely lower.
They are demanding much more for their rouble.”
Armando Macia, marketing
director, Grupo Marjal. ... in terms of buying for investment?
“Russian clients are not just looking for a holiday home that they visit twice a year anymore … they want a secured Investment PLUS a holiday home.” Alper Apaydin, managing director, Advantage Properties International.
“Younger Russian clients are
looking for a purchase with rental potential nowadays.’
Armando Macia, marketing director, Grupo Marjal.
“We are seeing an increase in the number of potential buyers looking to purchase for Investment. This sector is cautious and educated. They don’t believe in spin about highly over-infl ated possible returns offered in the past. Many are looking for commercial enterprises with secure incomes. Finance remains relatively new to Russia. Buyers under €100k are generally only interested in up to 4 installments within a short time. In the higher sectors some appreciate the possibilities of fi nancing, but again only for shorter periods.” Kim Waddoup. CEO, A I Group.
Market fi zz | Russian buyers are starting to pop up again
“We have found that investment is rarely the reason, and they are typically lifestyle buyers. They want to use their Montenegro property as a holiday home and to spend a few months a year there to live, and sometimes work. Therefore, they
www.opp.org.uk | JUNE 2010
RUSSIANreport
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