“THE MODERN MARKET IS NOT SPECULAR, BUT A TURNOUND VERY WEIGHED”
Rustam Aliyev, partner of Bryan Cave Leighton Paisner (Russia) LLP (formerly in Russia – Goltsblat BLP), on the activity of Russian and foreign investors, prospects for transactions, trust and compromises. – Rustam, please clarify to readers what transformation has occurred with your company? – At the beginning of the year, we teamed up with the American company Bryan Cave, and as a result of this merger, a global transatlantic company emerged. This was necessary in order to most fully realize the interests of our customers, who are now striving to diversify their activities and expand into various regions. In addition, the merger with Bryan Cave was a logical continuation of the strategy that the company adhered to initially. Now our company, like our brand in Russia, is called Bryan Cave Leighton Paisner LLP. At the same time, we kept our old team working in the Moscow office. We remain one of the largest international law firms in the Moscow and Russian markets. – How has the format of your activity changed after the merger? – The new format influenced the work with some clients in connection with the American sanctions, the very possibility of their participation in a number of projects. Nevertheless, we continue to work with them on sanctions issues. But the new platform opened up new opportunities for us, and this favorably influenced the projects that we are currently working on. Now our company provides customers with a full range of services. So there were much more pluses than minuses. – How active is the investment market now? How is it affected by such negative events as devaluation, the sanctions you mentioned? – The market could be more active, which is a sin to hide. Negative events affect him, of course, since transactions are very sensitive to all changes in political processes. The climate today in the political arena is not conducive to investment. In addition, there are point nuances that affect the devaluation of the ruble. For example, you are preparing an investment transaction, the parties to the transaction have come to some kind of agreement based on the price and current rental income, and at that moment the ruble is devalued due to the worsening political situation and the introduction of a new package of sanctions. If one of the parties has any expectations from a currency other than the ruble, then they will not materialize. In this case, you will have to revise the agreement, or the transaction will be frozen. This often happens. – What projects are now the most promising in terms of investment? – It is difficult to talk about any specific projects that will bring more benefits and profits than others. The modern market is not speculative, but, on the contrary, very balanced. This means that both buyers and sellers are carefully preparing for transactions. The parties analyze in detail all the possible consequences, and this helps to create a high-quality investment object. The chances of partners to sell the investment or receive from it in the future the necessary cash flow increase. This is a general formula: if you do well, it will work out well. If we talk about the various sectors of commercial real estate, then each of them has interesting, iconic objects that differ from the others in price and quality. Such objects could interest many buyers. But what I said above works here: factors such as the investment climate, ruble devaluation and others will play their role. It is important to understand that investors are different. For example, Russian investors are one circle of potential players. New investors, which in my opinion are categorically lacking in our market, are a different circle. The latter enter the market and bring new capital, create movement. Investors of this kind are difficult to lure, they are wary of them. Our colleagues from China, as well as the Middle Eastern neighbors of Russia, are now eyeing our market. Many of them are already doing something. There are names that have already thundered in the market, this is not a secret. But there could have been many more. Rumors of deals go, but very few of these deals are made. – It turns out that the sector is not important, but the object, location are important? – Yes. Object, location, as well as the willingness of the parties to compromise. Of course, a high-quality asset and an excellent location are good, but the question is still about price and profitability. There will be a good price – there will be a buyer. At the same time, the interests of sellers and buyers must necessarily coincide in a market transaction – often even in those matters that are not related to business. The parties to the transaction must have a high level of trust in each other. – How do developers change their development strategy in the current conditions? – In this matter, the first and obvious point is diversification. The second, slightly less obvious, but not new, is the transition to other sectors. Many of those involved in commercial real estate have now switched to residential real estate. But housing is also not so simple now.