RUSSIA: Russian real estate developer aims to build Europe's tallest building in Moscow

A 34-year old St. Petersburg real estate developer, Sergei Polonsky, hopes to dramatically change the Moscow skyline by building a skyscraper which will be the tallest in Europe. His Federation Tower complex is composed of two buildings --- one is called "West" and will be 63 floors high, while "East" will be 93 floors high. The project is part of a new commercial and residential district of skyscrapers called Moscow City. Moscow-City, a project which was conceived in 1992 but delayed for almost a decade because Russia was wracked by financial problems, will be Russia's first modern district with office, residential, and entertainment space. The one-square-kilometre Moscow City is meant to be a city within a city, and will mostly cater to the country's small class of wealthy, as well as major foreign corporations. Some property will be up for rent, other property, such as in the Federation Tower, is for sale. One square metre starts at 25,000 U.S. dollars. According to original plans, a 600-metre tower called "Russia" was meant to be the centrepiece of Moscow City. That project, which was to be financed by Shalva Chigirinsky, an ally of Moscow Mayor Yuri Luzhkov, is now stalled for reasons that are unclear. Rather mysteriously, Polonsky's Federation Towers easily got the green light from an otherwise draconian state bureaucracy, and building is proceeding at a speed almost unheard of in Russia, where construction projects often get bogged down by state regulators. The towers rise three floors every month. The West tower will be complete in autumn 2007. The East tower will be completed by 2009. The Federation Towers is being built by Polonsky's Mirax Group. He is a former Russian para-trooper who served in the North Caucasus, and who when penniless in 1994 opened a home repair service with a friend. At the end of the 1990s he was already building office space for rent in his native St. Petersburg. He moved to Moscow in 2002, and opened Mirax Group. "If seven years ago someone had told me that I would now be putting up the tallest building in Europe, honestly, I wouldn't have believed them," said Sergei Polonsky, president of Mirax Group, the company which is building Russia and Europe's tallest building, the Federation Towers. The Federation Tower has the financial support of VTB (Vneshtorgbank), Russia's second largest bank, which is wholly-owned by the federal government and which is run by a close friend of President Vladimir Putin, a native of St. Petersburg. While Russia now has the money to build such large construction projects, it still lacks the expertise. Mirax Group, like other Russian developers in Moscow City, are contracting out to Chinese, Turkish, Germand and American companies. "When we decided whether or not to take on this project the first thing we did was to fly around the world and see all the skyscrapers in the world; I did this myself," said Polonsky. "We realised that we don't have the experience for putting up 90-floor high buildings. So we created a joint venture, Mirax Turner, to manage this project. Turner [Construction Company] is an American company which has done such projects as Taipei 101, Jin Mao [Tower] in Shanghai, in Dubai they're putting up a 900-meter building, the tallest in the world. They also put up Tower of the Arabs in Dubai." The Federation Tower was designed by the German firm NPS Tchoban Voss. The China State Construction Engineering is building the West Tower, while Turkey's Ant Yapi company has the East Tower. About half of the East Tower will be utilized by the Global Hyatt Corporation. VTB has opened an approximate 250 million U.S. dollar credit line for the construction of the towers and has bought 33 office floors. Total construction cost for the complex is estimated to be 1 billion U.S. dollars. "It's not possible to put up such a building just because you have 1 billion U.S. dollars; there must be other pre-conditions," said Polonsky. "Since such a project is only profitable after seven or nine years, one must be able to forecast what will be in the country in seven or nine years. That's only possible if there's political and economic stability." With Russia's economy now in its eight year of growth, fuelled mostly by high prices on oil and gas, Polonsky certainly has reason to feel the time is right to build such a landmark in the capital Moscow.

ITN Source | March 29, 2007

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