Are foreign investors ready to return to Russia? Reporting from MIPIM 2011

Continuing our coverage from Tuesday's sessions at MIPIM 2011, this time with the outlook on investment in Russia:

Before the recession, foreign funds flowed into Russia into all types of investments in all regions of the country. However, once the downturn began, foreign capital slowed to a standstill. A phenomenon not unique to Russia, this was true throughout Europe with capital “returning to its base.” The struggle now is convincing investors to once again consider Russia.

Regions throughout Russia are actively trying to attract investors. Local governments have made improvements in areas ranging from infrastructure to simplifying the zoning approval process.

And some foreign investors are beginning to return to investments in Russia, sharing a belief and a history of investing in Russia. Such knowledge of the market and of the investment process in Russia is a competitive advantage which gives them an edge in completing transactions now.

Market conditions in Russia are improved today over what they were two years ago, making it seem like a more prudent investment target, but questions remain that will likely keep larger players on the sidelines for now.

For more coverage from the day's sessions, bookmark the Wisconsin Real Estate Viewpoint and visit MIPIM World.

MIPIM 2010: Facing the present in Russia

Wisconsin Real Estate MBAs report from MIPIM 2010:

Panel: Russia 2010: Face the Present – Think Long Term

The Russian real estate market has seen a dramatic change in ownership over the last year. Foreign investors have begun to retreat and Russian banks have taken back properties through foreclosures. This has created significant opportunities for well-capitalized Russian companies and foreign investors to purchase foreclosed properties or properties from those wishing to exit the market. Opportunities are also available to purchase struggling developments that have not yet been completed or recently completed developments that can easily be rebranded or repositioned.

In particular, the hotel sector suffered during this crisis; vacancy rates are high as some segments saw over-development during the boom. However, 3-4-star hotels are still under-supplied. Anticipation of the 2014 Winter Olympics in Sochi has already encouraged an increase in projected hotel development.

For more coverage of MIPIM 2010, visit our partner CREOpoint.com.