Is Equity Capital Realistic for Russia?
In Europe, debt is going to be strictly rationed, as commentators proffer equity as real estate’s main source of capital. Though for Russia’s real estate market, capital will not likely be equity-sourced this year. “Dribbling” is how capital flows will make their return into European real estate markets in 2010. As a joint conference of the Urban Land Institute, or ULI, and PricewaterhouseCoopers in Moscow in February delivered this forecast, the suggestion was made that, although investor activity would return into markets that have been silent for the past year, investment across the continent would be mostly equity-led in 2010. “Banks control both sides of the real estate question,” concluded a study by the organizers called Emerging Trends in Real Estate Europe, “removing the pressure on existing borrowers to sell and… [being] very reluctant to finance new deals.” Russia has certainly seen its real estate market dominated by banks, with asset seizures frequent and many companies
