Russia in 2013 intends to raise USD6 billion in foreign investment. Moreover, the lion’s share of these funds will go to the Russian real estate sector.

It is expected that the investments recieved this year will contribute to a favorable situation and the high profitability of the construction market. The government plans to take unprecedented measures to create favorable conditions and incentives for foreign investors who have decided to invest in the Russian real estate market. As always, the President first formulated the importance of taking action regarding the real estate market. Vladimir Putin said, “Russia is one of the five countries that potentially are the most attractive for investment. Our task is to turn this potential into a real flow of investment and the creation of new businesses and jobs.”

However, the way to implement such an ambitious plan against the background of a slow-moving market is a difficult task for the Russian authorities. First of all, it is the responsibility of the Ministry of Regional Development and the Ministry of Economic Development to design and launch in the near future new effective mechanisms for significantly increasing the degree of attractiveness of the Russian real estate market.

Last year, the value of transactions entered into by the major players of the national real estate market was close to USD8 billion. However, market participants were mostly Russian companies. Furthermore, 80 percent of the real estate transactions by value were in the capital city of Moscow.

At the same time, experts suggest that in the last couple of years some of the regional real estate markets showed better dynamics and have good investment prospects. Still, the remoteness of these regions and projects from major global investment corridors negates their appeal. The Russian President asked the relevant ministries and agencies to devote special attention to intensifying regional investment.

At a recent meeting with journalists, the main regional lobbyist, the Minister of Regional Development of the Russian Federation Igor Slyunyayev discussed the investment success of selected subjects of the Russian Federation in an effort to pattern out a model for increasing the regions’ attractiveness for foreign investors.

The journalists noted that the regions and the municipalities rely on the support of the federal agencies, especially in issues related to the promotion of real estate investment prospects in the international realm. The Minister assured the press that the Regional Development Ministry was taking appropriate measures to deal with the situation.

The RusRealExpo forum, which is to be held in late May, will be organized by the Ministry of Regional Development and the Ministry of Economic Development with the participation of the Federal Fund for Housing Development and the All-Russian Council of Local Government. The idea of RusRealExpo originated with the All-Russian Council of Local Government, as well as leading national development and investment companies.

Such ambitious goals as engaging big international real estate investors in Russia require equally extraordinary effort. According to the Russian Minister of Regional Development, RusRealExpo may well prove to be the investment elevator that will attract foreign investment to the development of projects in the regions.