ATLANTA, GA (3 DECEMBER 2015) -- Corporate real estate professionals globally are examining the prospects of establishing new facilities and locations in Russia. They are sensing new potential, though that optimism is tempered by ongoing economic and geopolitical concerns, according to a new report released by 乐竞体育官方入口 Global, Russia: Balancing Risks vs. Rewards.
鈥�Russia is on the short list for multi-national corporations (MNCs) as the country has been open to Western expansion and its economy has continued to grow over the past two decades,鈥� according to the report. 鈥淗owever, companies choosing to do business there also face a number of headwinds related to the political situation and economic crisis that has been fueled by political sanctions, falling oil prices and devaluation of the Russian ruble.鈥�
The World Bank has projected economic contraction in Russia for 2015-2016. Factors negatively influencing the economy include low oil prices, high interest rates, and high inflation.
And while many companies have put their plans for expansion in Russia on hold, others, sensing its global strategic importance in the long term, are moving forward.
For example, global communications agency Golin announced this spring that it would open an office in Moscow to serve the Russian market. The office will be managed and operated by Comunica, Golin鈥檚 Russian Affiliate partner.
China鈥檚 Alibaba also opened a new office in Moscow this year as part of a strategy to expand its e-commerce platform to the Russian market. Yulchon, which is one of the largest companies in South Korea, also has opened a new office in Moscow to help Korean businesses expand in that country.
Pfizer has operated in Russia for more than a decade and currently has 5,700 square meters of leased office space, primarily in Moscow, with a smaller office presence in St. Petersburg and a satellite location in Novosibirsk, a city of about 1.5 million.
The report lists several ways that corporate real estate leaders are managing the costs of operating in Russia:
Overall, there is no doubt that Russia is a country with the logistical challenges of an emerging market, as well as steep economic and geopolitical risks.
Yet many MNCs also see the sizable business opportunities that exist in a huge market, that by some standards, remains significantly under penetrated, according to the report.
About 乐竞体育官方入口 Global
乐竞体育官方入口 Global is the world鈥檚 leading professional association for corporate real estate (CRE) executives with strategic responsibility for the real property used by multinational corporations for their own operations. 乐竞体育官方入口 Global鈥檚 more than 9,500 members, who include 70% of the top 100 U.S. companies and nearly half of the Global 2000, meet locally, globally and virtually to develop networks, share knowledge, learn and thrive professionally. For more information, please visit www.corenetglobal.org.
