The fallout of the financial crisis in Russia has resulted in a significant amount of property falling into the hands of the country’s leading banks. ‘Banks are increasing their grasp in the property sector,’ said Charles Boudet, managing director of Russia and CIS at Jones Lang LaSalle in Moscow. While Boudet stated that banks have the option to flip and sell the properties they foreclose on, the current market situation has stalled transactions. A more likely consequence will see the banks holding on to the assets, including providing them refinancing when necessary rather than offloading property for low prices. ‘Banks don’t want to take a hit on their books,’ Boudet added.
The fallout of the financial crisis in Russia has resulted in a significant amount of property falling into the hands of the country’s leading banks. ‘Banks are increasing their grasp in the property sector,’ said Charles Boudet, managing director of Russia and CIS at Jones Lang LaSalle in Moscow. While Boudet stated that banks have the option to flip and sell the properties they foreclose on, the current market situation has stalled transactions. A more likely consequence will see the banks holding on to the assets, including providing them refinancing when necessary rather than offloading property for low prices. ‘Banks don’t want to take a hit on their books,’ Boudet added.
Recent situations of bank involvement in the sector include Sberbank providing $20 mln (EUR 13.5 mln) to developer DVI Holding to complete construction of a shopping centre. Sberbank has also reportedly written off the $500 mln (EUR 340 mln) debt of developer Don-Story as part of becoming co-owner of the company and receiving 50% of shares in its subsidiary DC Development. Further financing is expected to be granted to Don-Story, which remains heavily in debt.
