In Britain, Stevenage was the trendsetter, the first of a slew of postwar developments that became known as the new towns. Harlow, Cumbernauld, Milton Keynes — purpose-built, modern, concrete and eerily similar, they were templates for a better way of life. They were, perhaps, more successful as symbols of 20th-century living.
Now, outside Moscow, comes Great
Domodedovo, a symbol of life in 21st-century Russia. Funded by
Middle Eastern petrodollars, developed by the Emirate that made
residential island complexes so big that they could be seen from
space, it is a city, not a mere town.
The project underlines the massive
amounts of capital at the disposal of Middle Eastern state and
private investors, and their increasing inclination to invest it in
foreign markets. Oilproducing Gulf states have amassed about $1,500
billion in export revenues over the past four years, and the
percentage of this that they have put into foreign assets has grown
by more than 50 per cent during the past year, according to Morgan
Serhan Cevik, an analyst at the bank, says: “What’s different about this oil boom to the one in the 1970s is that, back then, Middle Eastern countries tended to put their oil revenues in international banks and into gilts and treasuries. This time around, they are putting them into more diverse assets abroad.”
Foreign assets are particularly attractive because of the poor recent performance of Middle Eastern stock markets — Dubai’s stock exchange is down 60 per cent this year. Notably, international real estate has increasingly attracted Middle Eastern capital. This week, Dubai is host to Cityscape, the biggest real estate conference in the world, where representatives from cities worldwide try to attract petrodollars to their development projects.
Russian cities, particularly Moscow and St Petersburg, are well-placed to attract this cash. Saaed Ahmed Saeed, the chief executive of Limitless, says that Russia has “the largest and fastest-growing real estate market in Europe”. Like the Middle East, it also has a rapidly growing middle class, who increasingly want to buy houses or flats in new suburban communities.
Russian investors, too, are sinking their own petrodollars into real estate. The investment company Nafta Moskva is putting $3 billion into a 600hectare private town outside Moscow, Rublyozo-Arkhangelskoye, which is said to be the second-biggest single real estate development in Russia. The project’s houses are aimed at high-net-worth families, earning the project the nickname the “millionaires’ town”.
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