Volgodonsk

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MOSCOW RENTAL HOUSING MARKET 2012

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Volgodonsk: Housing Review

–1– www.intermarkrelocation.ru

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Volgodonsk: Housing Review

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Types of Housing Available Renting properties has been quite a non-popular concept in Russia, and is still the case in provincial and small towns across Russia. It is widely believed that being an owner of an apartment is a major personal success factor. Therefore, rental market is now only developing and does not offer numerous options.

80% of the rental properties available would not be an option for an expatriate population dur to the following reasons: • Quality of building and communal areas • Property size and layout • Quality of renovation These are the so-call “soviet type” of buildings: characterized by small apartments (maximum a 2 bedroom apartment of max 70-80 sq.m.) Those also have a very typical interior layout and design (abundance of furniture in all room, living room overturned into a bedroom, floral design wallpaper and maximum one bathroom).

Appropriate properties for an expat It is only up to 20% of the properties available will be appropriate for an expat. These are mostly represented by good-quality apartments in nice and newly built housing complexes and buildings. There are few standalone houses and town houses available, but still these might come up to the market and can be tailored to the need of an expatriate.

80% inappropriate appropriate

20%

General Housing Overview The following properties were viewed during the general housing overview at Volgodonsk: • 1 bedroom apartment located at the address: Chernikova str. (Area: 100 sq.m, rent: 40 000 RUB/ 1 240 USD) • 2 bedroom apartment located at the address: Gagarina str. (Area: 100 sq.m, floor: 4, rent: 40 000 RUB / 1 215 USD) (parking is included in the rent) • 2 bedroom apartment located at the address: Blvd. Velikoy Pobedy (Area: 103 sq.m, rent 50 000 RUB) All these three properties were located in the buildings with the following features: • • • • •

Newly. Or recently built housing complexes Secured entrance Quiet and safe nearby housing territory Good quality communal area Proximity of infrastructure (shops, sports centre, etc.)

The interior renovation of the properties is of high standard, fully furnished, with all modern appliances.

Landlords and agents were ready for negotiations, make changes in the properties and tailor those to a particular expat need.

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Introduction Volgodonsk can be

sub-divided into 2 main housing neighborhoods, the so-called “Old City” and “New City”, symbolically sub-divided by a Don river and a railway.

Old City area is where the city originated back in 1930’s and is presented mainly by older soviet type of buildings or individual houses with small plots of land for gardening. Private houses as well as housing are relatively ran down.

The “Old Town” though benefits from quiet green area, but that seems to be the only advantage of the area, as the rest being: poor public transportation system, lack of infrastructure and proximity to nuclear power stations that is believed to be the main cause of pollution and environment issues.

New City area is represented by relatively newly build housing buildings and complexes and offers wide and developed infrastructure including: movies, restaurants, sports centre, shops and food market.

For DonBioTech-Evonic employees it has another key advantage such as proximity to the plant and the office. Thus, this area will be the most convenient and accommodating for expats arriving to Volgodonsks for short and long term assignments.

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Volgodonsk: Housing Review

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Housing Complex introduced by DonBioTech There is new complex represented by town-houses. The complex is still under construction, with some of the houses already completed, but most under renovation as well as nearby territory.

Size and Layout: Houses are on average 100-150 sq.m., 2 levels with good layout. No additional patio, or garden or a plot of land is available.

Location and Infrastructure: The complex is located on the outskirts of the city, with around 15-25 minute commute with car. The complex is surrounded by older soviet housing, with very limited infrastructure.

Pros & Cons Pros (+):

• Spacious Houses with good size and layout • Proximity to each other (expats will live on the same compound)

Cons (-):

• Ongoing construction: to date the construction is still underway. Once the houses will be completed there will be continuous renovations as the houses will be selling out. It takes around 2-3 years for a new development to settle in and to have noise and dust go out; • Location: unnecessary long commute for Volgodonsk. Furthermore, the area is quite isolated • Lack of infrastructure: limited, close to no infrastructure. A car will be required to have anything done • Proximity to each other Conclusion: this location and housing will be a good option in 3 years (when the construction is completed and over) for a Russian family with children.

Due to lack of international schools in Volgodonsk, it is unlikely that employees with families will be on assignment in this location, therefore a typical profile of an expat will be a single employee or a couple without kids.

The preferred location for this expatriate profile will be residing in the city centre, in close proximity to city infrastructure (shops, sport centers, shopping malls), as well as entertainment (Don riverbank, bars and restaurants). This can and should be in reachable by foot in a small town of Volgodonsk.

Average Rent Rate: Number of bedrooms

Average Purchase Rate: 50,000 RUR per sq.m.

This purchase price refers to a high end good quality housing: both apartment and houses.

Average price

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20,000 – 30,000 RUR

2

50,000 – 70,000 RUR

3

50,000 – 80,000 RUR

Please note that at the present moment rates for apartments offered for sale are overpriced. Reduction in price is expected with the completion of 3rd block of nuclear power plant construction.

When choosing apartment for purchase one must pay attention to the material of which the house is built as some of the newly-built houses are made from foam concrete blocks. Such houses are very cold in winter.

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Volgodonsk: Housing Review

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Overall Conclusion There is very limited amount of good quality housing in Volgodosnks. The market is not developed in this respect, due to very little demand for high end market. That said, there are options that come p and stay on the market.

It must be a company decision whether to rent or purchase the housing: both options have its own pros and cons.

Our professions opinion is to make sure that expats are placed in good quality housing in the city centre where all that city hast to offer is in easy reach: there is availability both for rent and purchase of properties in the city centre.

Putting expats in quite an isolated compounds where they live door to door to each other and are limited to this territory only might lead to increasing frustration.

–3– www.intermarkrelocation.ru

| Volgodonsk: Housing Review |

Apartments for Rent Address:

Gagarina str.

Address:

Chernikova str.

Rooms:

3

Rooms:

4

Floor:

4

Floor:

4

Area:

100 sq.m

Area:

100 sq.m

Rent:

40 000 RUB / 1 215 USD per month (including parking)

Rent:

40 000 RUB / 1 215 USD per month

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| Volgodonsk: Housing Review |

Apartments for Sale Address:

Stroiteley str.

Address:

Oktyabr’skoe shosse

Rooms:

3

Rooms:

3

Floor:

5

Floor:

5

Area:

121.5 sq.m.

Area:

104 sq.m.

Rent:

5 600 000 RUB / 173 126 USD

Rent:

5 000 000 RUB / 154 577 USD

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| Volgodonsk: Housing Review |

Address:

Blvd. Velikoy Pobedy (B19)

Rooms:

3

Floor:

4

Area:

103 sq.m

Rent:

6 200 000 RUB / 188 395 USD

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