It became known how much real estate in Moscow belongs to foreign legal entities

It became known how much real estate in Moscow belongs to foreign legal entities
About 8% of commercial real estate in Moscow, or about 10 million sq. m. m, at the beginning of 2024 belong to foreign legal entities. Until 2022, this figure reached 12.3 million square meters. m - that is, almost every tenth “square” was “packed” into a foreign structure.
But due to the process of redomiciliation of businesses to Russian special administrative regions (SARs), the volume of real estate owned by foreigners has decreased by 2.3 million square meters over the past two years. m.
Redomiciliation is a change of jurisdiction in which a company is registered. At the same time, all obligations and agreements of the company are preserved. The registered address and the law under which the company operates changes.
According to analysts, as of January 2024, foreign legal entities registered on the territory of unfriendly states (mainly Cyprus - about 90% of companies, as well as the Netherlands, Virgin Islands, Panama) own about 10 million square meters in Moscow. m.
- directly own about 2 million sq. m of commercial buildings and premises;
- through control of a Russian legal entity they own more than 8 million square meters. m of commercial buildings and premises.
This amounts to 7.7% of the total volume of commercial real estate in the capital, experts noted. Experts estimated the total volume of commercial properties in Moscow at 130 million square meters. m. Property of the Russian Federation, Moscow, as well as garages and underground structures are excluded from the statistics.
Why do companies “move” to Russia?
Experts confirmed the trend towards redomiciliation against the backdrop of sanctions among owner companies in the commercial real estate market. Since 2022, there has been a trend toward redomiciliation. This is due to the significant complication of operating conditions in unfriendly jurisdictions, including Cyprus, which has led to the inefficiency of doing business in these locations. As a result, Russian business is moving to SARs on Russian territory or to friendly jurisdictions, of which the UAE is the most popular, experts say.
In the context of sanctions and geopolitical tensions, many companies previously registered in foreign jurisdictions such as Cyprus are deciding to re-register (redomiciliate) to Russian special administrative regions, such as those located on Russky Island or the Kaliningrad region.
According to experts, this process is associated not only with sanction pressure, but also with the specifics of management and operational processes. This process is often used to optimize tax obligations, to obtain a more favorable regulatory or political climate, or to improve a company's image through association with more stable or reputable jurisdictions.
The main problem for Russian beneficiaries of real estate was that in 2022, registrars of foreign companies located in unfriendly countries stopped actively assisting their clients, including issuing powers of attorney to Russian citizens due to sanctions, experts explain.
Among the largest objects, according to analytical data, whose owners (one of the owners) “moved” to Russian offshores in 2022-2023:
Shopping center "Afimall"
BC Comcity
Multifunctional complex "Legend of Tsvetnoy"
BC Ducat Place III
BC Afi2b
BC Lighthouse
BC White Stone
Business center "Stanislavsky Factory"
BC "Mokhovaya"
BC "Linkor"
BC Vivaldi Plaza
Shopping center "Kaluzhsky"
Shopping center "Good!"
Columbus SEC
Shopping center "Oceania"
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