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26 May, 2008 04:47

Construction boom transforming Sochi

Almost a year after it was chosen to host the Olympic games of 2014, Sochi is attracting billions of dollars of investments and looks like a massive construction site: new modern hotels and housing estates are being built day and night.

Sea, palms and mountains are some of Sochi's most famous assets but those who like the view face a shortage of available real estate. In fact, surveys suggest more than 3% of all Russians would like to live there one day, and it is likely to become even more popular.

That enormous demand is pushing up prices. Earlier this year, residential homes in Sochi exceeded $US 4000 per square metre, which is almost Moscow prices.

But realtors complain that although Sochi has attracted investors, the city has failed to keep up.

“Because the city's infrastructure is not developed enough, we do not have an opportunity, like in Moscow, to choose between dozens of companies when launching the tender for construction or design projects. We face a limited range of companies and a lack of experienced players,”complains partner of MR Group Irina Dzuba.

The biggest projects involve real estate built especially for the Olympic Games, which will then be transformed after the games.

Basic Element, owned by Oleg Deripaska, is investing about $US 4.5 billion into Imeretinskaya Riviera, an ambitious project that includes residential property, hotels and trade centres.

The project’s head, Yury Reylyan, says the main challenge is to manage everything in time.

“We have spent a lot of time on zoning the territory, the general outlay has not been confirmed yet and because of that we cannot start the design and construction works,” Revlyanin said.