Stefano Carosi, Unicredit Bank's new head of real estate finance in Moscow, talks to PropertyEU about the current investment and financing climate in Russia.
Stefano Carosi, Unicredit Bank's new head of real estate finance in Moscow, talks to PropertyEU about the current investment and financing climate in Russia.
Carosi joined Unicredit Bank in April after working eight years in Moscow for his previous employer, property adviser DTZ. From 2006 to 2011 he was head of DTZ's investment department before assuming the post of managing director. Before moving to Moscow in 2006, Carosi was based in Germany, working for Aareal Bank as senior credit analyst. He has 16 years of experience in finance, having previously worked as an analyst for Interbanca, Zurich Financial Group and IBM Global Financing. Here, he talks to PropertyEU about his new position.
What made you switch from the investment (DTZ) to the financing side (Unicredit) of the real estate business?
Carosi: My background is mainly in banking, having worked for many years in real estate financing prior to DTZ. Also at DTZ we advised clients on arranging debt. Going back to banking after eight years of experience ‘in the field’ at DTZ is very effective for me as I now have more in- depth knowledge of the market for valuation, leasing and debt.
What is the outlook for the Russian (real estate) investment and financing market?
CarosiDespite the general macroeconomic slowdown (from 4.3% GDP growth in 2011 down to 1.3 % in 2013) and various geopolitical issues, the market is still quite interesting and several - mainly local - players are active. Basically for high quality projects there is always a strong interest, both from investors and lenders.
Do you see signs of increased reluctance among foreign investors due to the political tensions between Russia and Western Europe/US?
Carosi: Of course, yes, but this is not a new trend. In the last few years we have already seen this trend, with very few exceptions. However this is due to a combination of factors like macroeconomics, bad Russian PR abroad, and core markets like Germany, the UK and France being quite strong at the moment, which is pulling away foreign investors. However, foreigner investors with a presence in Russia are very committed to this market because they understand the local environment and the market potential in the medium term.
For newcomers to Russia, this is not a good moment for sure. But it is important to remember that timing is essential in real estate and sometimes being active when your competitors are not may be the key to success. Many investors decided to come to Russia between 2006 and 2008 while competing with similar investors. They bought properties at a very high price because of the pressure, but the timing was certainly not the best for a profitable investment.
What are currently the main trends in real estate financing in Russia?
Carosi: Activity is concentrated mainly around Moscow and the Moscow region, where the majority of lenders is very active and competition is significant. Russian state banks are quite aggressive given the liquidity available, however some foreign banks (e.g. Unicredit Bank, Raiffeisen, Aareal Bank besides EBRD) are active and willing to increase their activity in the market, of course on a selective basis. Unicredit, the largest foreign bank active in Russia in terms of assets, is among those willing to assess various kinds of deals in order to diversify its risk among different asset classes.
What are the main sources of financing (private equity/banks/institutions)? Is it mainly domestic money?
Carosi: Yes. However, there are a few foreign players who have been active here for years (Hines, Raven Russia, Aig Lincoln, London & Regional Properties, Heitman, Ikea) and willing to intensify their activity. I have only heard about one big foreign investor, Sponda, who plans to leave Russia after having bought a real estate portfolio.
Do you miss Italy or are you happy to be an expat in Moscow?
Carosi: I have been away from Italy for 14 years, six in Germany and eight in Russia. Of course I miss Italy, my family and friends are there. However it is not difficult to visit them often. On the other hand I don’t consider myself an expat in Moscow, I feel more like a local, which makes understanding society here much easier. At the end of the day eight years is a long period...
What are your interests outside the office?
Carosi: Travelling, independent movies and diving but the main interest is for sure spending time with my five-year-old son.
What are your three favourite buildings in Europe?
Carosi: The Sony Center in Berlin, the Main tower in Frankfurt (from its top terrace you have an amazing view of Frankfurt’s skyline) and of course the new Unicredit tower in Milan.
Want to hear more on developments and opportunities in the wider CEE region? PropertyEU is holding a CEE Investment Briefing in London on 8 May, and a at ReDI - the CEE Trade Fair for Retail Investment - on 28 May.