The investment climate in Russia has improved,  it is now the ideal time to navigate this emerging market with tremendous opportunities.

Russia, officially the Russian Federation, is the largest country in the world, spanning two continents, eleven time zones, and possessing vast natural resources. Emerging from the dissolution of the Soviet Union in 1991, the country underwent extensive changes which transitioned it from state-control to capitalism. After the deep depression which persisted until 1998, Russia experienced impressive economic growth, garnering the interest of investors globally.

Despite the economic downturn in the past two years which caused negative growth, increased inflation, and hindered foreign investment, most companies with existing investments are not planning to reduce their presence. Moreover, the investment climate in regional Russia has improved, while Moscow maintains its position as the principal property market. In commercial real estate, the office and retail markets continue to exhibit the greatest potential and growth. High interest persists, and investors are eager to step up investment upon the first signs of recovery. It is now the ideal time to navigate this emerging market and hone the ability to capitalise upon its tremendous opportunities.


Economy After the financial crisis of 1998, Russia exhibited impressive economic growth which lasted for a decade. The speed of this recovery was demonstrated by GDP growth, which accelerated from -5.3 % in 1998, to 6.4% in 1999. In recent years, Russia has entrenched its international influence and foreign investment has been stimulated by the price of foreign credit and rising commodity prices. Following two years of economic contraction, the World Bank predicts Russian GDP to grow by 1.3 percent in 2017 and 1.4 percent in 2018 and 2019 on the back of higher crude prices and rising oil production.
Legal International property investors and developers have begun to tentatively reconsider Russia's potential. Thorough due diligence and flexibility remain important considerations when trying to succeed in the Russian property market. Russian real estate is attractive for investment as legislation is simple and foreign legal entities or individuals can own real estate in Russia without notable restrictions.
Regions Russia has significant real estate transactional activity in Moscow and St Petersburg. Although Moscow is notably dynamic in sectors analysed by Propeterra, St Petersburg also merits attention. Regional cities, meanwhile, have special situations, including Sotchi on the Black Sea, and these may be worth considering for investors interested by the overall economic story unfolding in Russia.

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