PRESIDENT PUTIN’S anti-Western tone may raise warning signs for British property investors eyeing Moscow, where a building boom is giving the city its most radical makeover since Stalin’s days.

THE MARKET

Property prices have tripled in two years; £200 a sq ft is about average, but values in the best areas – say, Old Arbat or Patriarch’s Ponds – can reach £3,000 a sq ft, a rate more than Roman Abramovich paid for his mansion in Eaton Square. The typical entry price for a central flat is about £500,000, plus up to £75,000 for an underground parking space. Popular locations include the elegant tsarist-era buildings of Os-tozhenka and the gated communities of Pokrovsky Hills.

Russia’s super-rich are feeding the boom, but the middle classes are also weighing in. In the Yeltsin-era sell-offs, millions of tenants acquired their homes for a modest price under a version of right to buy, and many are keen to climb the property ladder. Britons, too, are getting in on the act. Expats who rented are buying homes; top estate agents such as Knight Frank and Savills have opened offices.

THE PROJECTS

The British architect Norman Foster is helping to reinvent the prerevolutionary district of Zaryadye, where the Soviet-era Rossiya Hotel has been razed to usher in a 13-acre complex by the Moskva river.

In the Kremlin zone, Number 5 Red Square, once a tsarist shopping mall and then a military storehouse, just moments from St Basil’s Cathedral, is being made over into a palatial hotel and apartments. Its ornate façade is protected by Unesco, but in the courtyard a seven-storey building is going up with 166 flats from 1,614 to 2,691 sq ft. Sales begin this autumn; completion is pencilled in for the end of next year. No guide prices so far.

Red October, a famed chocolate factory by the river, is to become the city’s first loft apartment scheme; the 12-acre site will be given over to housing (save for a museum). Sales will begin later this year.

THE RULES

Buying or renting, use trusted legal and financial advisers. The mortgage market is in its infancy and most deals are still done in cash. Carrying it in a suitcase is not recommended, says Savills, now allied with local agent Intermark. Lease a safe deposit box in a bank chosen with the seller.

IntermarkSavills, 00 74 95 502 9553 Knight Frank Russia, 00 74 95 981 0000

To find properties for sale in Moscow on properazzi.com click here

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