PROestate: private investment opportunities for property market - RWM Capital
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PROestate: private investment opportunities for property market

20.09.2019

On 18-19 September, the International Real Estate Investment Forum (PROestate 2019) brought together 3, 000 real estate executives, property developers and investors to discuss the present and future of the national built environment.

The conference speech of Feliks Blinov, CEO of the RWM Capital Investment Group, concerned infrastructure investment, investment in real estate development as well as collaboration with private investors.

Why invest in infrastructure? Infrastructure continues to attract attention and capital as an investment asset class. Like its investment asset class close relative real estate, infrastructure is a “real asset.” Indeed, infrastructure usually exists in the physical world as real estate—a physical asset permanently attached to the ground.

Besides real estate investments and infrastructure are often bundled together. A big infrastructure project is seldom financially viable on its own if it does not involve some real estate project attached. In other words, initial infrastructure investment draws investment in commercial and residential property. That’s the way it works.

“We should not take it for granted, that investors in infrastructure will queue up to give us their money. They face high risks. That’s why our task is not just to pack and wrap the project neatly for the presentation but also to do our best to minimize risks and put their minds at rest about the project’s success and profitability,” said Feliks Blinov.

The Russian Guild of Property Managers and Developers met to discuss private investments in real estate.

Investors are not willing to put their money into bank savings accounts anymore, because, with a much lower interest rate, they earn less money than they used to. Thus private investors are forced to seek new ways of making profit.

Feliks Blinov, who also is the chairman of the RGMD Investment Committee, explained how a lower key interest rate could help real estate market players make more money.

“With the Bank of Russia cutting the key interest rate, bank loans are becoming really affordable for us to use in our real estate investment projects. Before we even did not dream of it, as the loan to value ratio was always negative. No doubt additional investment will enable us to embark on new big-scale projects and consequently achieve a more considerable profit,” he said.

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