BRICKS & MORTAR: Burbskis for an expanded Moscow

By bne IntelliNews September 5, 2011

bne -

The plan for Moscow's development won't be finalised until next year, but the outlines are taking shape and they include creating suburbs, or burbskis, for Greater Moscow.

The legacy of Soviet city planning is that most people live in apartment blocks which were cheaper and quicker to build in a city that has always been overcrowded; Moscow remains by far the largest city in Europe (with St Petersburg the second largest).

In order to deal with the overspill, the Soviet city planners built various satellite towns around the capital known, appropriately enough, as sputniks. However, these were simply mini-Moscows with a metro station or an elektrichka (tram) to shuttle the lumpenproletariat in out of the centre of the city and a collection of soulless high rise apartment blocks to house them.

The new plan is to create housing that is a little more congenial. The city will in effect annex land from the Moscow Oblast that will be connected to the rest of the city and on which there are plans to build regular houses. A smaller (and much more expensive) version of this type of housing can already be found in the village beyond the Skolkovo business school, where houses surrounded by green gardens look something like the more expensive parts of Gruenewald in Berlin or Kingston-on-Thames in London. Of course, this being Russia and the owners being rich, the whole thing is surrounded by a security fence.

At the end of August, Moscow City government released some details of a plan to do a more downmarket version of the same thing that will be aimed at the emerging middle class. Land next to the Uspenskoye rural district between Novaya Riga and Uspenskoye Shosse, within the flood plain of the Moscow River, has been earmarked for new suburbs, reports the Moscow Times, and the decision to create these burbskis came "from the top."

As a side story, the land being taken over by the city belongs to state-owned companies, oligarchs and government officials. Over the last five years, a boom in land prices has been widely expected and those with money have been buying up land surrounding the city. This particular plot belongs to the state-owned banking giant VTB Group, but former shareholders of dairy company Wimm-Bill-Dann, David Iakobachvili and Gavriil Yushbayev, and Akron owner Vyacheslav Kantora have also been named as owners. (The wife of deputy PM and third most powerful man in Russia Igor Shuvalov reportedly owns a lot of the land around Skolkovo, along with oligarch Roman Abramovich).

A former 800-hectare horse farm on the territory was bought by oligarch Sergei Pugachev and owner of Mezhprombank in 2003 and earmarked for development, but VTB took the land over after Pugachev's empire went belly up in October 2010, one of the few Russian banking victims of the current crisis. Pugachev borrowed $2.4bn from VTB to create a 1m-hectare elite development using the land as collateral for the loan.

The largest plot in the development belongs to Akron, reports the Moscow Times, citing a real estate market consultant and a source close to Kantor, but a final decision on which bits of land will be used has yet to be made, the paper cited a source close to one of the businessmen saying. The paper speculates that the land will be used to create government offices, as the city has already said that it wants to move the state's offices out of the centre.

BRICKS & MORTAR: Burbskis for an expanded Moscow

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