City of Ekaterinburg readies for establishment of state companies' main offices.
Moving State Companies Out of Moscow: Are Ural Cities Ready?
Last July, President Putin announced plans for state companies to relocate out of Moscow and into the regions. However, none have made any public statements about moving beyond the capital. The question remains if the regions are prepared to handle large corporations.
Recently, "Kommersant" interviewed Venerey Shaydullina, director of the "Analytics. Business. Law" research center, who believes that Ekaterinburg and Tyumen are among the cities best suited to host state companies currently in Moscow. These Ural cities have the necessary office infrastructure and service-based economies.
Compared to other regions, the Siberian and Far Eastern parts face worse prospects, as additional investments in transport infrastructure would be required for companies to relocate there.
Shaydullina asserted that the regional budgets could gain an additional 250-300 billion rubles per year from the relocation of 15 large state companies. This equates to an average of 12-18% of the income of the receiving regions.
It's essential to acknowledge that Ekaterinburg is currently grappling with a severe shortage of office space. Businesses in the city have been struggling with a lack of quality offices for the past 5-7 years, with a vacancy rate of only 1-2%, significantly lower than the typical 5%. Despite the continued growth in demand, many companies continue to work remotely due to the pandemic.
Currently, the volume of quality office real estate in Yekaterinburg is around 1.4 million sq. m., but Andrey Braude, director of UK "RED", suggests that the city's businesses need an additional 100,000 sq. m for further development.
DK.RU also reports on this topic with the article, "Alexei Chistyakov: 'Large companies cannot expand - there's nowhere to put people.'"
Now, let's dive into the factors that might be influencing Ekaterinburg's office space availability:
- Economic Conditions: As a significant economic hub in Russia, Ekaterinburg's industrial and commercial activities might foster a demand for offices, but it doesn't necessarily confirm their availability.
- Infrastructure and Development: The city's infrastructure and the pace of real estate development can play a vital role, supporting business growth and relocation.
- Regulatory Environment: Favorable local policies can encourage more companies to relocate, while bureaucratic hurdles could complicate the process of establishing new offices.
- Market Demand: The demand for office spaces would be influenced by existing businesses and potential newcomers.
However, without specific data, potential obstacles to office space availability in Ekaterinburg could include insufficient modern facilities, regulatory challenges, and economic factors limiting development. To gain a clearer picture of the status of office space availability, it's advisable to consult local real estate market reports or contact local business development agencies.
- I'm not sure if Ekaterinburg, with its current severe shortage of office space, can accommodate the potential influx of large state companies from Moscow, as the vacancy rate stands at only 1-2%, significantly lower than the typical 5%.
- In the financial aspect, the Ural cities, such as Ekaterinburg, could potentially benefit from the relocation of state companies from the finance and industry sectors. However, the potential gains of 250-300 billion rubles per year to the regional budget from such relocation would heavily depend on the availability of office space and suitable infrastructure to accommodate these large corporations.
