ELITE MIGRATION: WHY WEALTHY PEOPLE MOVE FROM THE CENTRE TO THE WEST

To settle at Patriarch's Ponds or Ostozhenka in the early 2000s was a dream of everyone who considered himself to be an elite. If you are rich, successful and respectable you are to have an apartment overlooking Patriki. However a lot has changed over the years: the population of Moscow grew and offices concentrated in the center made this area overcrowded.

Traffic jams, even though there seems to be less of them, are still concentrated on the central streets of the city and Patriarch's themselves have grown from a secluded spot with a touch of Bulgakov's mysticism into a party place where a motley and not always pleasant audience hangs out.

Just remember how in June, after coronavirus restrictions were lifted, local residents complained about constant noise and never ending parties under their windows. Long story short, there is no more quiet life in elite apartments in the center. Besides, there are almost no vacant plots left there and development opportunities are very limited. So new projects as a rule are infill development with a small adjoining territory.

Now the luxury is in additional features of residential complexes. It became clear during the pandemic especially.  Developed infrastructure inside a residential complex is one of the main competitive advantages. This is the reason both developers and their buyers headed from the central district to the west of Moscow.

Such migration of the elite form the center to the periphery is a global trend. For example, in Oslo since the 1980s, the former Aker-Bruges industrial zone near the fjord has been turning into a fashionable area, and since the early 2000s, the adjacent Tjuvholmen district has been actively developed. The same thing happened to San Francisco's former South Beach waterfront which has also become a popular place to live and go out. In London such an example is the development in White City.

But let’s go back to the Western district of Moscow. Dorogomilovo district is now actively developing here. New elite residential complexes are being designed near Kutuzovsky Prospekt – the “government highway” which provides comfortable connection with the center of Moscow, elite suburban settlements and gives “status” address at the same time. This location cannot be called a new premium direction because way back in Soviet times political party associates lived here as well as people of art, foreigners who worked in the Soviet Union and diplomats – a whole diplomatic town was created near the Ministry of Foreign Affairs. So an elite, intelligent community with its way of life has formed here. Now these traditions are simply being revived.

According to Knight Frank analytical report for three quarters of 2020, Dorogomilovo became the leader by the supply volume in the elite residential property market in Moscow for the first time. A third of all exhibited lots are concentrated in this area after the launch of Victory Park Residences, a new project of our company, developer ANT Development. This is our second large-scale project carried out in Dorogomilovo after the start of «Poklonnaya 9» sale in 2018. ANT Development sales statistics shows a high demand for this location. So, in «Poklonnaya 9», 190 lots out of 496 (or 38%) have been sold in almost a year, in Victory Park Residences 29.5% of apartments have been sold since the start of sales in September - 142 out of 482.  Dorogomilovo is interesting for many developers which duly appreciate a promising area – in the nearest future the start of sales is expected in the much talked-of residential complex "Badaevsky" on the territory of the brewery of the same name.

Knight Frank report states that Dorogomilovo remains the most affordable area for elite accommodation purchase. According to analysts, the weighted average offer price here is 531 000 rubles per square meter which is the lowest figure in the elite segment compared to all other locations. At the same time, over the third quarter of 2020, the cost per square meter in Dorogomilovo increased by 19%, which indicates growth in demand. The district ranked second by the volume of transactions accounting for 21,7% of transactions in the third quarter. Only Presnensky has more - 25%.

What makes Dorogomilovo an attractive location? For example, a lot of vacant building sites, which give developers room for maneuver and imagination. According to Metrium, Dorogomilovo district made the top of the list by the number of lots on display (23,1%; + 7,3 p.p.) due to the launch of our Victory Park Residences project with its own 4 hectare park divided into various theme zones.

It would have been impossible to implement such a project in the center of Moscow because every square centimeter there counts. But the west of the capital still provides such opportunities. Given that during the time of coronavirus restrictions the value of private infrastructure in new residential projects has increased significantly – this feature of the district is definitely an advantage.

At the same time the development of Dorogomilovo and the whole Western district has been dynamic since the Soviet period and a stable transport infrastructure has formed here which is being constantly improved. This is why, for example, residential complexes near Poklonnaya Gora have convenient access to Kutuzovsky Prospekt as well as at least three metro stations and one MCC station within walking distance.

With regard to ecology, there are already many recreation parks in the west of Moscow. They are less crowded than in the center and more spacious. There are Victory Park on Poklonnaya Gora, Fili Park, nearby, in the south-west, there is the Vorobyovy Gory park with a cable car. For residents of complexes under construction near Kutuzovsky Prospekt these parks will be either within walking distance or within a few minutes drive. For example, our residents of «Poklonnaya 9» and Victory Park Residences will be able to walk in Victory Park and even see it from the windows of their apartments. And for a very reasonable price compared to the center where you will have to overpay several times for the view from your window.

Finally, Dorogomilovo is a district with rich historical and cultural heritage. Here you can find iconic Moscow landmarks - Poklonnaya Gora, the Borodino Battle panorama museum, the Triumphal Gates, the famous Pioner cinema and Pyotr Fomenko Workshop.

Market reacted to higher demand in Moscow style. Prices per square meter in elite and premium segments in Dorogomilovo district, according to Metrium, have already gained 16,7%. For comparison, in Tagansky and Khoroshevo-Mnevniki districts the growth was only 10,4%. This fact only proves an increased interest in the new elite location tempting developers to react. Against the background of 13,3% decrease in the total supply by the number of lots and 18.9% by the area sold, creating new premium projects outside the Third Transport Ring, further from the center, is becoming a trend.