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recent and spectacular 2018 FIFA World Cup (Moscow’s Luzhniki Stadium in the city’s 360-acre Olympic complex hosted the pivotal final matches) as with the Kremlin’s global ambitions."
The number of registered real estate deals in the Moscow Metropolitan Area reached a record high of 13,900 in October, implying advances of 10% y/y and 24% M/m. Residential demand in MMA and across the country has seen impressive trends YTD, supported by gradually recovering real incomes, historically low mortgage rates (down 40bp YTD to 9.4% in September), developers accelerating their offers and making them more affordable, as well as client concerns over the upcoming regulatory changes in the sector. Demand is slightly inflated and these trends are fully sustainable in the medium term. Listed homebuilders are leading the sector dynamics and were able to increase sales a blended 25% y/y in 9mo18. They represent the most appealing market proposition, in our view, and are the most responsive to changing client preferences. The changing regulations favour the large scale developers, as they have better access to capital and are more flexible in terms of sales, and triggering significant sector consolidation.
9.1.5 Retail sector news
Russian authorities have strengthened the control over product labeling. Following lengthy negotiations, officials agreed to a draft concept on labeling goods last Friday. The labeling system will become a ‘state information system,’, which will strengthen the government’s hand in the project, and business will be granted access to the collected data. Medvedev launched the labeling project in late 2017 when he made the Center for the Development of Long-term Technologies (TsRPT), owned by Alisher Usmanov and Aleksandr Galitsky, its sole operator. On one hand, it’s strange for the government to rework the foundations of a project launched almost a year ago. But the state has been increasingly collecting and centralizing data under the Digital Economy project, and it makes sense that the government would want to get their hands on information regarding a significant portion of Russia’s commodity flows. Ultimately, the status of ‘state information system’ shouldn’t change the project too significantly. Usmanov and Galitsky will continue to rake in cash, and business will receive access to data, allowing them to see their labeling costs as an investment into business analytics.
• Nearly a year after launching the project, Medvedev instructed officials to prepare a new concept for product labeling in October. The process hit delays, however, as officials disputed who would control the system.
• Medvedev insisted that the government own all data collected and grant access to business. He asked officials to decide whether the system should receive ‘state information system’ (SIS) status and whether it was worth separating the functions of product labeling from data operations. It was decided that there is no need for a separate data operator.
• According to Vedomosti’s sources, the latter question was hardly discussed, because TsRPT had been made sole operator last year.
• Typically, the state determines strict rules of operation for SIS and obliges the operator to hold tenders for public procurement. However, as this will be the first SIS run by a private operator, it remains to be seen how the relationship will play out.
Retailers want moratorium on regulatory changes. In a meeting with Deputy PM Dmitry Kozak, retailers asked for a one to two year moratorium on
89 RUSSIA Country Report December 2018 www.intellinews.com