The industrial reserves

There is almost no vacant land for development in the populated districts of the city, so redevelopment is the only way of area evolvement in the urban environment.

There are industrial zones in many Russian cities, as enterprises used to be the major employers. The overall area is calculated in thousands of hectares.
Alexey Bernikov, the marketing analyst in JSC "Prime Group" notes: "Industrial sites within the limits of St. Petersburg are very promising for further development. According to experts, the overall area of the largest industrial areas suitable for redevelopment is approximately 6.000 hectares.
The total industrial area makes at least 1/3 (one third) of the area of the central districts of St. Petersburg. In the future, the development of such areas will significantly increase the amount of new housing supply waiving the city limits expansion."
Market participants say that in addition to the location redevelopment has both its positive and negative sides. The downside is that it's not just a parcel of land. Prior to construction it is necessary to deal with the demolition of the old buildings, as well as with the reclamation of land, if a hazardous industry was located on this place. These are big investments. "On the other hand, there is a positive side, since, as a rule, all the industrial sites are well provided with all the resources: sanitary piping, water supply, sewerage, electricity, which helps to solve many problems," says Konstantin Kovalev, first Deputy General Director of "Pioneer Group" in Saint-Petersburg.
For a long time the main obstacle for redevelopment process has been the fact that the economy of industrial enterprises closing or transportation outside the city was not evident. Now, when the price of land in the city center has reached dizzying heights, the economy of such projects comes out to be viable.
The cost of demolition of the existing buildings and land reclamation, even taking into account the dense housing in urban areas, does not exceed 5-7% of the budget, as Mr. Kovalev estimates.
Alexey Bernikov, the marketing analyst in JSC "Prime Group" says: “Costs of the former industrial areas clearance in order to start new construction is in each case very individual. On the average, according to experts’ assessment, the cost of transformation ranges within 25-40 million rubles per 1 ha, depending on the property and on the site contamination problems. There exists a whole list of owners on a single object; it is needed to come to a mutually beneficial cooperation with each of them. Furthermore, in some cases, the site reclamation is required.”
Elena Valueva, Marketing Director of Mirland Development Corporation says: "Western experience has proven that previously demanded area may eventually turn into a depressive one. This happened, for example, with the former docks in London that had lost their direct functionality by the 70s of the last century. Within a short period of time a huge area - more than 20 km2 - became unclaimed. And what do we see today instead of these areas? Canary Wharf business district, which competes with the London City; ExCel exhibition center, which has hosted the Summit of G20; airport; residential, commercial and entertainment complexes. Of course, all this would have been impossible without the creation of transport infrastructure which has connected these areas to the city center and with each other. Within 10-15 years the abandoned territory turned into a fast-growing area, and, for example, only Canary Wharf has provides over 100,000 jobs."
Marina Fedorova, Deputy Business Development Director in North-West region in “Spectrum Group” adds: "The most successful examples of industrial sites modernization in Europe are the areas redeveloped for public and cultural spaces. For example, London's Tate Modern opened in 2000 in the former Bankside Power Station on the south bank of the Thames. Another example is the cultural and creative center of Essen in the Ruhr region of Germany, organized on the former mine Zollverein area. In Russia, the good example is the project on New Holland Island in Saint Petersburg, which is being implemented by “New Holland Development” company." There are successful examples of multi-functional building together with redevelopment – in 2001 the Gasometers in Vienna were modernized and the structures have found new residential and commercial use in modern times successfully divided into residential, office, cultural and entertainment area."

Opinion:

Elena Valueva, Marketing Director of Mirland Development Corporation in St. Petersburg
A lot of potential projects that may be used for redevelopment are located in the Admiralteysky district, on the Petrogradskaya side, Petrovsky Island, along the Bolshaya and Malaya Nevka. Often the situation is complicated by the fact that one object has different owners. It can also happen when the industrial area is formed by a variety of objects with different owners. To implement such an ambitious project requires an integrated approach and the support of the authorities.