General criteria for determining just what is and what isn't an upscale apartment still don’t exist

Journalists and real-estate experts often speak about the "elite" housing sector in Moscow. But, as of today, there are no firm and fast criteria for determining just what exactly this word means.

According to Vladimir Vashlayev, head of the PR department at Blackwood Real Estate, the market’s inability to settle on a classification system for elite housing is a cause for confusion for analyzing the proper costs and profit potential for investors and residents. "Each realty and construction company has its own view on the hierarchy of elite real estate," he said.

Several foreign-based companies have specialists and consultants studying the Moscow elite-housing market, most of whom focus on selling to foreign clients. The leading firms include Kirsanova Realty, Noble Gibbons, Baut-L and Penny Lane Realty. All have developed their own criteria and classification systems for the elite-housing market.

Baut-L specialists say that the high-quality housing market in Moscow began to take shape in 1993 with the construction of new, high-quality buildings on Veresayeva Ul., Veskovsky Per. and Tatarskaya Ul. Many experts say that the first multistory elite buildings appeared in Moscow four years ago, in 1999, although others contend that they first went up as far back as 1997-98.

The requirements to be consider "elite" are beginning to become more defined as the sector matures. But the segment is still vaguely classified in two categories (AA or A), three categories (A, A- and B) or even into four categories (A, B, C, D) – and these systems do not always correspond.

The differences show up in price classification. Noble Gibbons, for example, sets a minimum price of $4,000 per sq. meter for deluxe Class AA apartments, but Baut-L and Kalinka Realty drop the minimum to $3,000. Most specialists consider apartments costing from $2,000 per sq. meter, and sometimes as low as $1,500, as the A category.

Industry players also disagree on the number of apartments an elite building should have. Noble Gibbons sees the deluxe market as moving toward club-style homes in which there would be no more than 40 apartments in a building.

Nadezhda Kot, managing director for Kirsanova Realty, which is affiliated with Sotheby’s International Realty, agrees that having fewer apartments in a building is a plus, but it is not a compulsory factor. "It’s hard to organize a really comfortable level of life when there are a lot of apartments," she said. "But that is probably just the specificities of Moscow urban planning, because, in the center, it is difficult to construct a building more than eight or nine stories high.

"Given the usual size for apartments in this class, you reach a figure of 20-40 apartments per building. But, if the land is greater, you can find traditional elite condominiums with a non-traditional number of apartments, say, 60, even in the Ostozhenka district. World-famous developer Donald Trump builds for the ultra-rich, and some of his buildings can have as many as 400 apartments."

Being "elite" also depends on location. Many experts consider the "prestigious" area in Moscow to be within the Garden Ring running from Tverskaya to Prechistenskaya Nab.

But Blackwood’s Vashlayev says that, as well as Ostozhenka and Prechistenka, zones such as Plyushchikha, Khamovniky, Patriarshy Prudy and Chistiye Prudy are also in demand for elite housing. "Smolenskaya Nab. has lost some of its prestige over the last year, while Frunzenskaya Nab. has been rising," he said.

Blackwood experts say that the prestige of the Patriarshy Prudy zone is growing because of the area’s architectural and historical value. Prices and quality there will soon pass that of Ostozhenka-Prechistenka, they predict.

Infrastructure requirements also play a part in determining classification, with much depending on the size of the building and the type of people who there. In one of the best Moscow buildings, Agalarov House (19/1-3 Gruzinskaya/Klimashkina, with 34 apartments), most residents are public figures – TV, arts and show-business personalities. The building has several public areas, such as a large patio with a swimming pool, and offers residents plenty of socializing opportunities.

"Builders focus on future buyers when establishing the infrastructure of deluxe elite housing," Vashlayev says. "Buildings of this type have a fenced-off territory, an inner courtyard, underground parking with double the number of parking spaces, round-the-clock security and smart technology managing the building, its safety systems, operation and service."

Club-type buildings with six to 12 apartments do not need such developed infrastructure, if the building’s district already has developed infrastructure. According to Kirsanova Realty’s Kot, Moscow’s fashionable club-type buildings have differing degrees of developed infrastructure and a club-type organization. The building at 1/3 Molochny, for example, has 15 apartments, a swimming pool and a small gym. The one on Maly Lyovshinsky has 18 apartments, a swimming pool, gym, cigar room, children’s playroom, Turkish bath, Finnish sauna and bar.

"It’s not enough to have just a small number of apartments," she says. "It’s easier for buyers to make a decision if they see that they will have a choice of services and will be able to get maximum comfort for the money they are spending."

Buyers today are paying more attention to architecture. They seek buildings with character and unique qualities. The Dvoryanskoye Gnezdo complex on Levshinsky Per. was designed by leading architect Ilya Utkin, for instance.

Vashlayev says that original architecture does have an impact on demand. "What is really popular is not just individual buildings, but entire areas that have been restored in a unified architectural style," he said.

"The theater begins in the cloakroom, and buildings begin with their facades," said Kot. "The outward appearance and architectural particularities are very important for the initial impression.

"An observant person won’t just notice if it’s beautiful or not but will also take notice of the height of the ceilings, the amount of light in the apartments and how the inside space is organized – all from just standing out on the street," she added.

"The architecture will either be off-putting or entice a person to enter. Architecture can help say something about what kind of people live in the building, what category and social group it was built for and so on," Kot adds.

"Elite-ness" is also determined by how the apartments themselves are designed. The general principle is one of division into guest and family zones.

"Even in studio apartments, the owner always sets a corner aside for himself and has some kind of particular design there," Kot said. "In some elite apartments, the living room is 60-80 sq. meters. Some people have bathrooms that are 10-12 sq. meters in size. It’s good if there’s a chance to have a bathroom with a window. It’s quite possible for the wardrobes to take up as much space as the average Russian family’s entire apartment."

Yelena Rumyantseva, director of Kalinka Realty, says that there are a number of obligatory conditions for elite housing – otherwise, it simply doesn’t make the grade. This includes zoning of apartments into private and guest zones, a large living room, big windows and high ceilings. "If the design for an elite building foresees ceilings of less than 3 meters, then it is better not to build the building at all," she said.

The range of elite housing is quite broad. Buildings like Agalarov House and Torris House on Spasonalikovsky Per. would have been significant events on the market seven years ago, but they are no longer the yardsticks for the sector and are already being overtaken by more elite housing currently under construction.