Alexander Romanenko, founder and president of ADVECS, a Saint Petersburg, Russia full-service real estate firm, is a testament to the power of the global real estate community. Since 2006, Romanenko has served as the official representative of the international real estate federation FIABCI to the United Nations. He is also an honorary member and medal holder in the Russian Guild of REALTORS®, an honorary member of the Ukrainian Real Estate Association, an honorary academic of the International Academy of Mortgage and Real Estate, and the author of more than 100 real estate publications. He obtained his broker license in California in 1993 and Certified Property Manager Designation in 2002. Here, Romanenko discusses his firm, the real estate market in Russia, and the importance of connections around the globe.
Real Estate magazine: Please tell us about your firm.
Alexander Romanenko: ADVECS Real Estate Corp. was established in 1993 in Saint Petersburg and now holds leading positions in the Russian real estate arena with more than 2,000 agents and 20 offices operating in five cities: Saint Petersburg, Moscow, Voronezh, Nizhny Novgorod and Tumen.
RE: Please describe your current housing market.
AR: It’s a strong buyer’s market. The average price per square meter in Saint Petersburg decreased in 2015 to $1,500 and is now rising. Depending on uniqueness and value of a property, the exposition (listing) time varies from two months to a couple years on average. Nowadays, the most lucrative investment is buying luxury properties. The latest difference in currency rate has affected the price, which dropped three times against the U.S. dollar. Those who do not need to sell immediately capitalize on profit.
RE: Has that changed in recent years?
AR: The political and financial crisis has changed the buying strategy. A period of rapid consumption was replaced by a period of conservative savings. Only those who have rational reasons are buying real estate today; however, due to the depreciation of the national currency, the volume of U.S. investors is definitely growing.
RE: What are the various types of properties available in your market, and which is the most popular?
AR: Newly built and even in-progress apartment complexes are the most popular for local residential investors, but both elite and commercial properties in unique locations are key targets, as well. Second to residential buildings, there is increasingly appearing apart-hotels (full-service apartments for long-term visitors or permanent living) and multi-functional apartment complexes. There is also an interest in warehouses, hotels and office centers. Moscow leads in investment at $2.2 billion in the past six months, followed by Saint Petersburg with $148 million. This is significantly higher than the first half of 2015, when the volume of investments in commercial real estate totaled only $90 million.
RE: Please tell us about the buyers you work with: Are they predominantly local? From other countries? How has this changed in recent years?
AR: Approximately 80 percent of our buyers overall are from Russia and the CIS (Commonwealth of Independent States) region. The next largest groups of buyers come from Israel, Germany, Italy, Estonia, the U.S. and Finland. In the past few years, foreigners were selling more than buying, but in 2015, we observed a reverse trend. Now, foreigners are buying instead of selling, attributable to the doubling and even tripling in value of foreign currencies against the Russian ruble.
RE: What role does the American real estate market play in your business?
AR: As an international real estate brokerage, we of course facilitate transactions between Russian and American buyers. We strive to keep up with demand; currently, we are receiving a lot of inquiries into commercial properties in the U.S. For local support, we have partners in Los Angeles, Miami, New York and Boston. We are looking to expand our network not only to meet the demand, but to provide more, even better options for our current and future clients.
RE: What are some of the most important trends in your market?
AR: The investors are focused on high-quality and liquid assets with stable income and clear, long-term lease contracts. Fortunately for foreign buyers, they compete less with locals for the historical, city-center properties, as typical Russians prefer the newly built apartment complexes in the suburbs. Inventory here has remained stable for a long time, creating a comfortable buying and selling market.
RE: What are your biggest challenges/opportunities for growth?
AR: Our greatest challenge is that the real income of buyers is, at the time, declined. Despite this challenge, we see opportunities for growth in our international buyer community due to the strong investment potential in Russia. While dollar-investing clients find Russia a potentially great investment opportunity in balancing their financial portfolios with more ambitious rates of return, Russian clients look to balance their portfolios as well with stable purchases and especially income properties. The demand for properties on both sides makes it crucial to forge more relationships with American brokerages.
RE: What are some of your most successful strategies for promoting/marketing your business?
AR: ADVECS created the largest database for new construction in the region with 82 building companies. This database has been a key tool for our success in new construction. We also utilize modern information technologies—social networks, our website, and multi-listing large portals. Also worth noting is that the company is active in all local, regional, and global property exhibitions and major events related to real estate, lifestyle, and more.
RE: How does being part of Leading Real Estate Companies of the World® help advance your business?
AR: ADVECS was named the “Best Brokerage in the Market of Real Estate” in Saint Petersburg five times and the “Best Real Estate Company in Russia” twice. The immense recognition we receive makes us the go-to brand among locals and encourages trust among international buyers and partners. We see our membership in Leading Real Estate Companies of the World® as a mutually beneficial and fruitful relationship.
For more information, please visit www.advecs.com.
For the latest real estate news and trends, bookmark RISMedia.com.