Buying a waterfront land plot for a residential scheme in Moscow
A plot of about 5 hectares on a canal bank: the land acquisition and a joint venture to build a 180,000 m² business-class scheme. How a land purchase is structured and where the risks are.
Carte Capital · 5 min read
The idea
The price of residential land in Moscow depends not on hectares but on how many saleable square metres can be built and when. Buying a plot means buying future permits. The buyer’s job is not to overpay for metres that are not yet approved and not to tie up capital for years before sales begin.
Structure
- Asset: a plot of about 5 hectares in northern Moscow on a canal bank.
- Deal: acquisition of the land plot and a joint venture to build a business-class residential scheme.
- Project: a residential scheme of about 180,000 m² with its own embankment.
- Delivery: the developer partner in the JV. Phase one (four buildings, about 650 apartments) was commissioned six months ahead of schedule.
Parties
| Party | Role |
|---|---|
| Carte | land acquisition, setting up the joint venture |
| Developer | JV partner, project delivery |
Numbers
About 5 ha and about 180,000 m² as designed. Phase one has about 650 apartments, underground parking and retail space. About six years passed between the land purchase and phase one completion.
Risks
- Permits: the buildable area may turn out smaller than expected. Protection: a price linked to approved area, or staged payments.
- Encumbrances and utilities: protected zones, utility connections and the waterfront strip affect design and budget.
- The cost of waiting: years before sales start mean interest, taxes and upkeep. A JV reduces the amount paid for land up front.
Lessons
- Value land on approvable saleable area and time to sales launch.
- A land purchase works well combined with a JV, so the landowner and the developer share permit risk.
- A location with a unique advantage, here the water and a private embankment, supports sales prices throughout the project.
More on land deal structures: Moscow land: why joint ventures are replacing outright sales.