I Love Russia
During the XIV Moscow International Property Show, Kim Waddoup, helming aiGroup, gave an interview for the International Residence magazine. Among the key factors of resurging interest in overseas real estate Kim Waddoup mentioned overcoming the crisis in Russia and further making of the Russian middle class which seeks nice and comfortable living emulating the Western middle class. The key indicator and evidence of high living standards in West-European countries is acquisition of the second home abroad.
— Mr. Waddoup, for how many years have you been holding such shows and what is your assessment of the current one?
— I got involved in exhibition business a long time ago. We hold expositions of overseas property in both Russian capitals on a regular basis. In Moscow aiGroup organized the first international property show seven years ago. The inflow of visitors keeps swelling with each passing year. The flood of visitors is the best evidence of the current show's success. During two days our show is attended by 6,000-7,000 visitors. People come up to various booths, seek advice and get competent answers to all questions they are interested in from the show's expert participants. Among our numerous participants are developers, brokers and lawyers. Upon obtaining exhaustive information, many visitors immediately sign preliminary contracts and plan an examination tour to a chosen destination.
— How strongly do you think has the global crisis impacted the desire of Russians to buy overseas property?
— By and large, we were not affected by the crisis. As the Russian middle class gains firmer foothold, the unswerving desire to buy real estate abroad is getting stronger. The current global crisis did not have such a disastrous impact on Russia as the crisis of 1998 when the whole Russian banking system and finances crumbles. This time people also feared that they might lose money on their bank deposits and many began investing their savings in solid assets, that is, in real estate. In this connection, we noted surging demand for inexpensive housing. At the same time the luxury real estate market sagged because the crisis dealt the heaviest blow on high net worth people. Many of them earlier invested their money in equities which lost much of their value. Affluent people were cautious about overseas property acquisition as they expected stabilization and price reduction. But during the past year they began returning to the international property market.
— How do you assess the purchasing potential of Russians?
— The potential is very high and this is why we operate on this market. The well-being of local population is quickly growing. Successful entrepreneurs, managers and specialists of different vocations seek higher living standards, not inferior to those enjoyed by their colleagues in Western countries. They pursue a similar lifestyle. For instance, well-to-do people play golf because golf means prestige, Western style and new business contacts. The same can be said about overseas property. In Western Europe the second home abroad is a norm for a middle class person. The second residence is often bought as a holiday home for children who need a good place for spending three months of their summer vacations. Children need housing both for their studies and leisure. Adults purchase a second home in different countries for skiing, surfing, diving, fishing, rock climbing and pursuing other hobbies. Overseas property acquisitions are also looked upon as most reliable investments. And finally the second home is interesting for retirees or those who plan to retire. They certainly dream of enjoying virgin repose somewhere in paradisiacal tropical islands, don't they?
— Where do Russians most often buy their second home abroad?
— The most popular destinations are Bulgaria, Turkey, Spain, Montenegro and Italy. Cyprus, Greece, Czech Republic, Egypt and France are also popular. At the same time Russians have been interested in most exotic destinations of late, including Costa Rica, Panama and Australia. On the whole, there is a keen interest in absolutely all possible destinations.
— What "secrets" of aiGroup propel it to leading positions on the market?
— We are an open and honest company; we always turn a listening ear to our business partners, understand their needs and try to make sure it is convenient for them to deal with us. It's not the first time many participants of the current show come to our venue and some bring their partner firms with them. We also create maximum comfort for visitors. Those who attended our shows before bring their friends. We try to create a business-like and festive atmosphere. Guests are greeted at the entrance by lovely girls who hand a show catalogue and a set of information booklets to them. We selected a very fortunate place in central Moscow with good access not far from the metro. We offer quality and think of people's needs.
— Are there any differences between the Moscow visitors of your show and visitors of similar shows in Western Europe?
— The different is rather remarkable. To begin with, the crowd is different. By and large, Russian population has not so far reached the Western living standards. The percentage of high net worth individuals is much higher in the West and the overseas property market is more robust there. If you take Britain, for example, the international property market has existed for more than 40 years in this country, representing an established system of relationships with its own history and traditions. It's a common thing for the British to buy real estate abroad. On the other hand, the international property market is just opening for Russians and at the present time it is in the making, so everything is still ahead. Meanwhile this market develops faster than one could surmise. On our part, we do our best to help form this promising market.
— What are your plans for the future and which new segments would you like to enter and develop?
— We'd like to see a better developed luxury housing segment which is very prospective in our opinion. The growing number of Russians takes interest in luxury housing and real estate in the highest price range.
— As a foreign businessman, what can you say about Russia and the specifics of doing business in Russia?
— Like any other country, Russia has her own distinguishing characteristics which every foreign businessperson should know. The main thing is the attitude towards Russia which can be either hated or loved. I love Russia. I succeeded in recruiting an excellent team of outstanding specialists and enthusiasts of our business. These are young and talented fellows. We trust each other and I enjoy working with such an excellent team. It's interesting for me to share my experience and knowledge with them.
Interviewer: Oleg Shchelov