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Business news, 24.09.2007 15:04

40 Local Land Plots Up For Sale, Development

sunset_in_the_sleep_district By Yekaterina Dranitsyna

Staff Writer

The St. Petersburg government plans to auction off over 40 large land plots in several of the city’s districts starting from January next year. City officials expect investors to redevelop the territories, replacing dilapidated buildings with new ones.

According to the draft law approved by the city government on Tuesday, residents of the demolished buildings will receive new apartments at the expense of the investment companies.

“We will observe the rights of every person. All families without exception will receive improved living conditions, moving to new and comfortable apartments,” Valentina Matviyenko, the St. Petersburg governor, was cited as saying in a statement released by the governor’s press service Tuesday.

City officials claim that the redevelopment of the residential districts will solve two problems: local residents will receive improved housing, while construction companies will be able to build new developments on the land plots, of which there is a deficit.

City Hall expects investors to provide residents of the demolished buildings with accommodation that is the same size or larger than their previous homes, located in apartment buildings in the same district. Alternatively, private owners will be offered compensation equal to the market cost of their old apartment.

The deputies listed 44 land plots in the Nevsky, Krasnogvardeisky, Admiralteisky, Frunzensky, Kalininsky, Moskovsky, Kirovsky, Kolpinsky, Krasnoselsky, Kronshtadtsky, Kurortny and Petrodvortsovy districts that are due for renovation.

“If this scheme is realized, it will be the best solution for dilapidated buildings. However, we doubt whether investors will be interested in all of these plots. Resettling the residents of just one building could take two years and consume considerable financial resources,” said Irina Khondozhko, deputy head of the residential real estate department at Central Real Estate Agency.

Khondozhko suggested that land plots in the Moskovsky, Frunzensky and Kalininsky districts would be most in demand. Due to additional expenses, the price of apartments in the new buildings could be 10 percent to 15 percent higher compared to the normal market price for similar premises, she said.

“Renovation may be profitable only in the districts that are not densely populated, in the districts where investors will be able to construct more buildings than they demolish,” said Yevgeny Kaplan, deputy director of Souzpetrostroi, a St. Petersburg association of construction companies.

Kaplan considered the requirement to provide people with new apartments in the same district as socially fair, but economically unreasonable. Apartments which cost $1,500 per square meter on the city’s outskirts could cost $3,000 per square meter in central districts, he said.

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