The grand ceremony of the Commercial Real Estate (CRE) St. Petersburg & Federal Awards-2009 was held on June 19, 2009, at the Corinthia Nevskij Palace, where the event organizers merged two Awards — the CRE St. Petersburg Awards-2009 and CRE Federal Awards-2009 — into a unified event that enabled all the best St. Petersburg and Russian real-estate facilities delivered to the market in 2008 to be identified and honored in a single celebration.

This year, the Awards organizer, the Impress Media publishing house, joined forces with such key companies as Raven Russia, Gars Telecom, Yit Lentek, EKE, Colliers International, Praktis, DTZ, Becar Realty Group and the Guild of Property Managers and Developers (GMD). The ceremony was also graced by members of the St. Petersburg city administration. Thus, on behalf of the city administration, the events participants were greeted by Igor Metelsky, the chairman of the St. Petersburg City Property Management Committee, and Maxim Sokolov, the chairman of the Investment and Strategic Projects Committee. The city officials noted that St. Petersburg, just like the market participants, is learning to manage the ongoing changes in the economy, evident in the city authorities’ current efforts to facilitate the creation of new projects.

As an example, Metelsky cited the effectiveness of the Public-Private-Partnership mechanisms that have proven themselves with strategic investors. “These partnerships will be extended to small- and mid-sized businesses, involved in the realization of such important social projects as parking lots, sporting facilities, etc.,” he added. “Furthermore, the city government has focused on preparing land plots in order for this strategic resource to be in place for future development once the market recovers. This will allow future nominations for the CRE St. Petersburg Awards to count on new modern buildings in the city.”

The first CRE St. Petersburg Awards were held in 2008 and just a little over a year has passed since then, but the commercial real-estate market has changed beyond recognition. The CRE Awards have become a sort of ‘seismograph’ that helps monitor the evolution of the Russian commercial real estate. This year’s overall picture is that market players are working harder and earning less money. They also had to work more on the eve of the Awards ceremony as they took part in the CRE Summit that preceded the evening festivities. The summit featured 22 discussion groups that included leading analysts and practitioners from 32 cities throughout Russia, with central theme being the current crisis and how to overcome it successfully.

“The events attendees did not look like ship wreckage survivors, as the crisis has not been able to break the entrepreneurship spirit of Russian developers, consultants, contractors, etc.”

Feasting and toasting crisis survivors

All key market players that have so far survived the crisis, some 300 participants in all, attended the Awards ceremony on June 19. Interestingly, these people did not, however, look like ship wreckage survivors, as the crisis has not been able to break the spirit of Russian developers, consultants, contractors, etc. Quite the contrary, their solidarity has only increased, as there was no longer any need to think up some topics for discussion. “Well, have you made it through the crisis yet?” was the standard greeting amongst acquaintances at the ceremony. And, it was equally interesting to hear a wide range of interesting, and at times, convoluted answers to this simple question.

On the whole, some 49 facilities were nominated for the CRE St. Petersburg Awards-2009, while the participants in the National Awards featured 92 properties from 35 Russian cities. The jury had great difficulty in determining the winners as they had to select the ‘best of the best.’ Those who have managed to complete their projects before the crisis are now facing the rather complicated task of remaining profitable in crisis-ridden marketplace.

And this is why the jury had to consider not only the outward appearances of the buildings, but also their finishing, internal designs and the projects’ concepts. A major issue that needs to be considered by all the players today is how the market is reacting to the new conditions, how will it develop further and whether each company is ready to face the future changes? These types of questions underlined all the events and discussions at the ceremony.

And, the final winners

At the end of the day, the nominations winners were the most viable projects and companies that had succeeded in finding a common language with tenants and partners and reacted with great flexibility to the current market conditions. With regard to the heroes of 2008, the ‘Developer of the Year’ nomination was won by Adamant, a major market player in the retail real estate market segment in St. Petersburg, which was able to successfully re-conceptualize all its facilities prior to the crisis and inaugurated some new conceptual facilities in 2008. In the ‘Consultant of the Year nomination,’ the Golden Brick was won by Jones Lang LaSalle, while the ‘Person of the Year’ nomination was won in a landside by Dmitry Zolin, managing partner, London Consulting & Management Company, whose company carried out a successful expansion campaign into the Russian regions in 2008.

Commenting on the rising importance of the CRE Awards, Alexander Olkhovsky, GMD president and vice president of VTB, noted that the value of the Golden Brick, the Awards’ symbol has significantly increased, while Raven Russia Chairman Igor Bogorodov added that presence at the CRE Summit and Awards this year is already a good sign that such a company is alive, working and actively participating in market activities. Airing a similar view, Gars Telecom Managing Director Pavel Gorenkov, said, “since you are all here, it means that you are all winners.” In today’s environment, all market players are learning to join forces and identify common solutions, the experts added.

In general, all the projects nominated for the Awards this year were much more impressive than in the past, regardless of whether such projects were developed with the help of real-estate consultants or by the developers themselves. Even the properties for the ‘Facility with the Greatest Social Impact’ nomination included some hi-tech projects. But this is quite understandable, as the market reached its peak in 2008. The number of delivered projects has just begun to focus more on quality, as the market went into inevitable corrections.

Future market prospects

As demonstrated by the CRE Awards, both real-estate projects in the capital and regions have reached a new maturity level. The contours of the new market landscape in the post-crisis era are already clearly noticeable, and will become more visible as soon as the crisis passes.

The market’s future perspective was the key subject of discussion at the ceremony as participants watched and listened to star-studded performances by tenor Dmitry Golovin, a violin solo by Maria Bessonova and the Champions of the World group. However, the best performance was that of the Awards winners, who all stood on stage and sang the Zamykaya Krug, or Closing the Circle, song, giving the overall impression that they will certainly make it through this crisis with flying colors.