"If you have an opportunity to enter the market it`s easier to do now."

The participants of St. Petersburg market entered the year 2009 torn by doubts and fears. Many fears were justified but others were not. On the New Year Eve we asked our readers to answer three questions and examine the positive aspects of the crisis.

• What fears proved unjustified?
• What opportunities did the crisis open before you?
• You`ll devote the year 2010 to...

• It should be noted that all of my forecasts proved true: I predicted that the acute phase of the crisis would be over by September, the dollar exchange rate would leap to 35 rubles, large development companies would be the first to leave the market etc. I am even terrified a bit about my gift of foreknowledge.
• The key opportunity provided by the crisis is not to slave to the clients` expectations but come up with an honest and straightforward analysis of the market situation, suggesting realistic scenarios. Now I often ask my clients: "Are you prepared for an unexpected but honest answer?" And my clients increasingly often reply "yes".
• I am going to devote the year 2010 to realization of available opportunities to direct my clients towards a realistic scenario which is sometimes at variance with their vision. I also want to devote this year to the development of our team`s professional skills and to my own professional growth.

Nikolai Vecher, CEO, GVA Sawyer SPb, Vice-President of MDG:

• A year ago when the situation was rather obscure I feared durable stagnation in the real estate market. However the crisis Led to market stratification: projects with quality Location and infrastructure gained a competitive edge. As a result BC Petergofsky did not lose a single tenant during this period and now it is 100% occupied. BCBoLloevCentercommissionedinlate 2008 is already 60% occupied and new Leases are being currently negotiated. We are negotiating with potential tenants regarding our new projects to be delivered in 2011-12 - in particular with retail and office tenants of a mixed-use on Moyka Quay, 73-79.
• There can be nothing positive in the crisis, but due to the clearing of the competitive field we managed to promote our commercial and residential properties faster and cheaper and also to increase our brand awareness. In addition, this economic situation is a good time for purchasing valuable assets, including highly motivated and skilled personnel.
• In the near future our company plans to raise the efficiency of the operational properties and complete the projects now under construction. Early in December 2009 Ollila townhouses are to be commissioned and in the 1Q of 2010 work son Akademicheskie dachi must be completed. We also intend to develop new residential and commercial projects.

Dmitry Abramov, CEO, BTK-Development:

• Already in late 2008, when it was possible to assess the profundity of the global economic crisis and project its impact upon the commercial real estate market we developed our business development strategy for 2009, set the goals and laid plans, factoring in the existing and possible risks. In particular one of the main risks is the Lack of any activity in the market and consequently the lack of completed transactions. Summing up the preliminary results of the year we can state that the given apprehensions were groundless with regard to the office and retail segments where we cut a considerable number of deals. As for the industrial and investment segments, the dynamics was different. The investment sector demonstrated some activity in St. Petersburg, but in most cases it did not lead to real deals; in the industrial sector the market players showed almost no activity at all and the number of transactions was negligibly small.
• Rather than talking about new opportunities provided by the crisis, I`d say that the crisis confirmed the effectiveness of the business model selected by our company as this model is based on diversification of our activities between the main segments of the commercial real estate market and on rendering a full range of services to our clients.
• We`ll work harder than in this year.

Andrei Rozov, Head ofJLL`s St. Petersburg Office:

• We certainly had fears after the economic crisis rode roughshod over this country at the end of last year. The worst fear of all was inevitable layoffs of our backbone personnel unless we would be able to readjust and realign the structure of our orders. Fortunately our fears were unjustified as the events developed in accordance with a "moderately optimistic scenario." And instead of reducing our staff we began recruiting new personnel starting from the second quarter.
• We refined and perfected those services which had been auxiliary before the crisis but then the demand for them increased. I mean auditing, financial and technological examination and oversight of construction projects. The price of risks run by the projects is incredibly high now. Hence the focus on such issues as the best use of cash assets, keeping within the construction schedule and ensuring the high quality of projects. We discovered the potential of other regions, such as the Leningrad and Novgorod regions. We also expanded into Russia`s South - Krasnodar and Rostov-on-Don. In 2009,1 could devote more time to my family, traveling and recreation. As for our company, we purposefully set to strategic development and retargeting of the entire system -we carried out in-house reorganization and reviewed corporate standards.
• We look upon 2010 as the year of internal growth for our company, increase in our client base and geography of our operations as well as involvement in landmark projects. In a word, we`ll be working on our development and hope that the frozen projects will thaw out.

Gennady Kirkin, CEO,SKIrbis:

• The occupants of Renaissance Business Centers are very large-scale companies representing different sectors. The crisis began in the financial environment and then flowed into the economical realm. This wave impacted different sectors in a different way. At that time our fear was the tough work to be done for all of our tenants and giving them the fair revisions of economical conditions. As a result of our flexible approach, we were able to continue with 98% of our tenants. The crisis forced us to streamline our operations. As for benefiting from the crisis, we thought we should add some more plots to our portfolio and actively searched for openings but didn`t come across the plots which would match ourcriteria.
• We didn`t stop any of our development projects in 2009 but only slowed down so 2010 will be the year to accelerate. In 2010, we will launch the first hotel development project in St.Petersburg which will be run by a world-renowned hotel chain.

Bora Bosok, Marketing Director, Renaissance development:

• In my opinion, the worst fears about the crisis have been postponed till some time later.
• The crisis threw off the scales from the eyes of many market participants and we again came to our senses.
• We`ve been 15 years in the real estate market and we are not going to change our occupation in 2010, especially since there is a heap of opportunities in this area.

Georgy Rykov, CEO, GC Besth. Commercial Real Estate:

• AVIELEN A.G. was entering the year 2009 at the stage of robust construction on all the four buildings of AEROPORTCITY SPb. Accordingly, our fears were related to a threat of construction stoppage with all ensuing consequences for both the company and its personnel. It became clear by May 2009 that we should better forget about bank loans. We had a number of serious discussions with the project investors and a viable solution was found. Thanks to a deliberate, economically readjusted strategy of project development we managed not to halt construction works at the most difficult time. The project is currently being realized in conformity with the schedule.
• Two competitive projects in Pulkovo 3 area were terminated during the crisis; we also suspended and froze many of the announced projects and changed the profile of others, having converted them into residential real estate. This gives us grounds to assume that by the time of demand recovery and economic upturn our project will be timely and in high demand.
• We`ve laid many plans for the next year. In fact this will be the decisive year fortheAEROPORTCITYSPb project. Closer to autumn 2010 the inauguration of our Crowne Plaza Hotel must take place. We also plan to open three business centers in 2010. A refreshening news is that the problem of transport infrastructure that was so heatedly debated is being successfully solved as it was decided to connect the Pulkovo area with the downtown by means of the Overland Express link. Commencement of the works on the airport modernization, in order to increase the passenger traffic at the city`s main gateway, will be veyr important for us as our project will be ready to serve the needs of all guests and business partners of the northern capital.

Andrei Kanivets, CEO, Avielen AG:

• If we compare the Russian market with European markets,theformergrows much faster. Bureaucratic snags drive us mad but we believe they will be removed. The situation is getting better all the time, especially in Saint Petersburg.
• The crisis made land prices more realistic so now it`s easier to enter the market. Surely many companies have problems with dispensable cash, but if you have an opportunity to enter the market it is easier to do now.
• We are launching a new residential project called Swedish Crown because we expectthatthe production expenditures will be more grounded than before. An upturn will start in the nearest time and it is better to launch this project now than after the market has recovered.

Juuso Hietanen, CEO, NCC Nedvizhimost:

• Fortunately the year 2009 was not the year of fears. The trends had been clear Long before someone dared to attach the "crisis" tag to what was going on. The price of mistakes is much higher on the market which is no longer omnivorous and all-forgiving. However we managed to resist the temptation to make decisions guided only by fear.
• I don`t think our company now has more opportunities than before; simply some of them dropped out of our sight. For instance by establishing a feedback with representatives of small and medium-sized business we were able to develop a concept of the universal commercial format CU BIS.
• I`d like to devote the year 2010 to some serene pastime, but most Likely we`ll have to roll up our sleeves. The construction sector will certainly have new opportunities in the fast-changing economic environment and we`ll use them.

Vlad Sementsov Operations Director, GC Perviy Bazis:

• We were afraid to lose permanent clients on account of their contracted business turnovers and to lay off considerable staff numbers. But this did not happen: we managed to fully preserve our production department and office.
• The crisis opened new opportunities, such as the offer of additional services to our clients, new cost management opportunities and the development of new technologies allowing even more competitive prices. In addition, we learned to treasure our human and financialresources and to streamline the operations of each employee.
• In 2010 we are going to Look for new business horizons and to retain our leading positions on the market.

Anastosia Grigoryeva, Director, Marketing Department Delikotny pereezd SPb:

• The oil price is one of the factors affecting the real estate market. Fortunately, the pessimistic forecast for the average annual price for Russian oil below $50 proved wrong. As regards the commercial real estate market in general and consulting in particular, we used interruptions in the sales which were inevitable, especially at the turn of the year, for streamlining our in-house operations.
• We were growing and expanding without giving much thought to effectiveness. The crisis is the time of deliverance from illusions and pseudo-professionals. The sooner a company understands it the better it operates. The year 2009 provided us with an opportunity to shift our mindset and take unpopular decisions which led us to the desired results already by the year`s end. As an international company, we were able to compare our performance to the showing of other offices. We are happy to realize that in terms of profitability and yield per employee we are little different from the key European offices and keep within one trend with most developed markets. This corroborates the propriety of the chosen line of reforms. In 2009 we achieved remarkable success in rendering consulting services. We signed contracts with Silovye mashiny, L0M0, Kirovskyzavod and a number of other big territorial development projects covering more than 100 ha in the aggregate. This allowed the retention of high intellectual potential and a strong team.
• In the outgoing year we laid a foundation for long-term ongoing development. At the global level Colliers International is now in the top three commercial real estate consultancies, pursuant to the Lipsey rating. Our main shareholder Colliers CMN uses the time of crisis to consolidate the assets and to make new acquisitions aimed at increasing the market share and making it to the top of the world rating. We have all necessary resources for this remarkable breakthrough now. It`s quite logical that my responsibility is to ensure the company`s Leading positions in the local market. My top priority in the months to come will be strengthening of our brokerage efforts.

Nikolai Kazansky, Colliers International Saint-Petersburg:

Commercial Real Estate North-West №12-1 (27), December 2009 - January 2010