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How to Save Money on Alluvium

 

Traditionally, houses of business-class have been constructed on Vasilievsky Island. However, the intense development of alluvia has resulted in the construction of more economical accommodation, and now this offer at an attractive price determines the actual demand for the island real estate. 

Vasilievsky Island is one of the least developed districts of Petersburg. Thus, in 2013, only 21 th.m2 of accommodation were put into operation here. In 2014, the buildings of residential block “Vasilievsky Island” (60 th.m2) by SPbGGU, residential complex “Dom na Malom” (1980,1 m2) by Group SOLO, and three sections of residential real estate “Aino” (14,6 th.m2) by Lemminkainen  were completed, and just before the new year residential real estate Suomi by Company “YIT Sankt-Petersburg” (22,8 th.m2)  has obtained the permit for commissioning.  Thus, on average, 100 th.m2 have been put into operation. However, despite the increase, the share of Vasilievsky Island comprised about only 3% of all housing put into commission.  
"For builders the attractiveness of the district is limited by high-altitude regulations and requirements acting in the zones of historical building, as well as a small number of land plots suitable for residential construction”, -  general Director of ZAO closed joint stock company “Lemminkainen Rus” Yuha Vyatto comments.

 
Activities Grow up 

 
Five residential complexes on Vasilievsky Island will be completed soon.  All in all, at the moment more than ten blocks are under construction or development on the territory of the district.    
"In recent years the development on Vasilievsky Island has increased significantly, according to the data of Russian Auction House (RAD) and the announced development plans.  Transactions on the sales of land plots and the areas of former industrial enterprises demonstrate that the island is demand in spite of it’s isolated situation,” -  general Director of Group SOLO Oleg Sumbaev comments. 
"Vasilievsky Island is a kind of borderland which seems to be quite a  suitable place to construct houses of business-class and buy them, in the opinion of some people, but other people believe it to be more suited to construct houses of comfort-class”, - Head of the Marketing Analysis Department of Company “YIT Sankt-Petersburg” Vadim Lavrov tells. The projects of infill development used to be realized on Valilievsky Island , but in the last 2-3 years the situation has changed. There appeared new territories due to alluvia as well as large spare territories of former factories.

 
"From 2014, the construction on the island has been reviving – the erecting of four new residential complexes, even including apartments of Docklands design for the first time, has started,” – Head of Sales and Acquisition Department of Surveyor International Group Maxim Ignatovich points out.    


As Director of the Sales Department of group of companies “Lider Group” in Petersburg Vitaly Vinogradov notes, 45 % of all houses being built on Vasilievsky are not very advantageous from the point of view of their situation and surroundings, as some industrial buildings  or a cemetery may be situated nearby.  


Prices Go down


Before alluvia appeared, the supply of Vasileostrovsky district comprised mainly of buildings of business-class.    "Active residential construction in the alluvial zone has changed the ratio of shares: thus, the supply of business-class comprises 60 %, that of economy – and comfort-class – 40 %”, - Director of the Residential Real Estate Department of NAI Becar Polina Yakovleva states.   
However, in the words of the Director of Corporative Communications of group of companies “Etalon” Mikhail Dukhovny, all new houses on the island may be regarded as comfort plus- and business-class, not taking the alluvial housing into account.   

Traditionally, the new buildings of the district are of high quality and price.  "By many rating parameters and the average cost for the last 3-4 years, the district has left behind Tsentralny and Petrogradsky . The prices have been restricted by the supply: the zones of residential building on the island were determined and limited long ago, infill construction in the district was not permitted by the local authorities – at the beginning and the middle of the 2000s,  only several projects were realized near the underground  station “Primorskaya”, - in Morskaya embankment and Korablestroitelei street,” – Maxim Ignatovich states.  

  
From 2012, the prices began to change due to the start of construction in the alluvial zone. “Now  developers may realize their projects at lower prices  in comparison to the current prices in Vasilievsky island, representing them as affordable houses near the historical centre”, -  Vadim Lavrov points out.    
As Polina Yakovleva notes, from 2014 the cost of residential real estate had increased by 10 %, reaching the level of 80-100 th.roubles for 1m2 in comfort class and 180 th. roubles for 1 m2 in business class. Due to the crisis, builders did not raise prices in 2015. In elite class the cost of 1 m2 amounts to 350 th. roubles.   “Possibilities to improve transport availability, near the Finnish Gulf and the City Centre  support a rather high demand for houses. But there are practically no places left for construction. And the cost of land plots for development grows up”, - Director of Sales and Marketing at EKE Irina Zerenkova states. All these factors maintain the rather high level of housing prices.  

 
Housing for One’s Own People 


Demand for apartments in the  Vasileostrovsky district has always been high, but the supply has been limited. Now the demand is stimulated by the offer of alluvial territories which attracts due to the price ratio. According to the data of NAI Becar, the most demanded are small apartments of all classes (studio apartments with an area up to 40 m2, one bedroom apartments with an area of 60 m2, two bed room apartments with an area of 80-100 m2). 
Yuha Vyatto notes an interesting tendency: the main buyers of new houses in the districts are island natives.  
"By popularity Vasilievsky Island gave up it’s place only to Tsentralny and Petrogradsky district. Now people wait for ZSD (Western high-speed diameter) to be put into service, which will lower transit transport loading on the island and, simultaneously, raising the cost of apartments”, - Oleg Sumbaev notes. 


Transport Problems


The real estate demand growth has always been restricted by transport problems resulting from the isolated situation of the island. In recent years, these problems have been aggravated by constant reconstructions of bridges and embankments.  Correspondingly, the metropolitan railway development will contribute to transport problem solving: the repairs of “Vasileostrovskaya”, the opening of a new hall “Sportivnaya-2”, and the construction of a station “Gorny Institut”.  
Analytics associate the perspectives of the island with the development of alluvial territories, first of all. According to expert estimates, 2 mln m2 of residential and 2 mln m2 of commercial areas can be developed here.  The second reserve is the redevelopment of industrial zones in the historical part of the island.   However, in both cases the development of land plots will be connected with certain problems.  
"In the first case, it is necessary to solve the problem of communications, which requires much financing and collaboration with city authorities. As for developing industrial zones, the start of construction will be complicated by a number of preparatory redevelopment works,” – Irina Zerenkova notes. 

 

Maria Mokeicheva - maria.mokeycheva@dp.ru

"Delovoi Peterburg", № 103, 24/06/2015, p 14(02)

Short address for the article: http://www.dp.ru/1040e5/