Yekaterinburg: the dynamically growing centre of the Urals
Situated on the eastern edge of the Ural Mountains, 2,500 km from Moscow, Yekaterinburg is the business, industrial and cultural center of the Urals. It is the capital of both the Sverdlovsk Region and the larger Urals Federal District of Russia, which comprises six other regions for a total population of 14.2 million.
The economies of Sverdlovsk Region and Yekaterinburg are evolving dynamically, as are major indicators, such as industrial output and retail turnover.
Yekaterinburg is Russia’s third largest city by social and economic development, the second by consumer goods expenditures, with the salaries of Yekaterinburg residents rising on average by 23% a year.
Yekaterinburg is:
• 1 330 thousand people,
• 110 thousand Ha,
• 10 thousand US dollars of regional product per capita,
• 6 thousand US dollars of retail turnover per capita.
Business centre location: Akademia City
Akademia City is Yekaterinburg new district, situated 7 km from the city centre. The area of 1267 ha will be built over with 9 Mio. sq.m. of residential estate and 4,2 Mio. sq.m. of commercial estate, public and social establishments. The project includes five blocks with office and logistics premises.
Preconditions for business centre.
• A large-scale construction project with all types of real estate provides the necessary business and living environment and creates a positive image for the future business centre.
• Good location, proximity to the city centre, perfect view of the site.
• The area allows building a large and inexpensive parking that will be a competitive advantage of the project.
• Low construction costs due to well-balanced urban and architecture design.
These factors and an elaborated business centre design and marketing concept will form the conditions for a competitive leasing rate – the key demand factor.
Demand and supply on the office premises market
Office premises market in Yekaterinburg has been rapidly growing in the recent years. The demand for offices is boosted by the constantly rising number of enterprises in Yekaterinburg (both domestic and foreign) and the development of already existing businesses.
Most domestic companies rent C class office premises located on the ground floors of residential buildings or in the old administrative buildings with lower leasing rates. Thus, the demand for high quality office space is driven mainly by foreign and large domestic companies.
Market parameters
• Total available office space: 3 Mio. sq.m.;
• A and B class premises space: 158 000 sq.m., including 64 000 sq.m. on the open market;
• Occupancy rate: 96 – 98%;
• Total high quality office space per 1000 people: 118 sq.m.;
• Projects announced for 2007 – 2010 (total space): 1 Mio. sq.m., offices premises being mainly developed by local companies;
• Leasing rate including operational expenses and VAT: $1285 sq.m./year (A class)
and $618 sq.m./year (B class).
Despite the relatively high leasing rates, there is practically no vacant office space available in the city. At the moment it is impossible to rent an office with an area of more than 300 sq.m. in the existing A and B class office centres.
Akademia City business centre B+
Key concept features
• The business centre is comprised of several buildings of different height with the total area of 200 000 sq.m. that can be used by a single or several tenants.
• The construction will be undertaken in 4 phases.
• Spacious central entrance halls with high ceilings.
• The height of ground floors is not less than 6 m, the height of upper stories (between false floor and counterceiling) is 3 m, to create a sense of large space, whereas false floors enable to use the best telecommunication solutions and leave space for future development.
• A sufficient number of car parking spaces (1 car parking space x 50 sq.m. of area rented).
• The pillars net of 9 x 9 m (for the maximum convenience of tenants).
• The majority of premises are leased at the shell & core stage without internal finishing which enables the tenants to equip their offices themselves and tailor them to their own needs.
• Auxiliary infrastructure (such as bank offices, retail points, food courts, gyms and conference halls).
• The proposed leasing rate (by the time the 1st stage has been accomplished) is $300 sq.m./year (excluding taxes and operational expenses).
Investment program
RENOVA-StroyGroup is seeking for strategic partners / investors / end-users / developers / operators to jointly develop the Business centre. The Business centre investment program:
• Investment total: $ 300 Mio.
• Construction starts: 2008
• Construction ends: 2010
• Total space: 200 thousand sq.m.
• External financing requirement:
$ 150 Mio.
