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Thursday, September 20, 2007

Study About Corruption in Real Estate in Russia And CIS

Swiss Realty Group has completed a study on corruption in real estate market in Russia and CIS. The study was conducted by interviewing of Swiss Realty Group' clients and partners , as well as personal in-depth interview.

The experts were selected among investors, developers and constructors. About 17% of respondents planned to enter on the real estate market during the year, about 83% is already working in. Among the experts were representatives of large and medium-sized businesses that develop projects in different regions and sectors of the real estate market, with various capital structure.

The main research questions were related to corruption on the business matters, expert evaluation of the corruption level RE, etc.

Aaron Haber, Swiss Realty Group' Director of investment department said: "We had hoped to see trend to reduce dependence market from corruption, but found that most market participants are support the corruption, and was unable to work on the market without it. Many international investors have stops high level of corruption in Russia and CIS countries, but they do not change their plans to come on the market. "

According to Ilya Shershnev, BDM Director of the company, more than 50% of respondents believe that corruption costs them from 25% up to 50% of their profits, and 5-10% of business turnover. In general, Swiss Realty Group experts still tend to believe that the level of corruption in the real estate market in Russia, Ukraine and Kazakhstan remained steadily high.