England vs Russia? Are they a match property investment-wise?

July 11, 2018

The England football team has been doing so much better than expected in the World Cup 2018 hosted by Russia and nearly played the host nation in the semi-final. But how do they match up on the property investment stakes?

Well among the usual reasons attracting investors to a particular location or geography are criteria such as:

World Profile- and for Russia hosting the World Cup has significantly raised its profile in a positive way on the world stage

Economy – this is a weak point for Russia and whilst the economy in England is not currently growing particularly quickly, weighed down by Brexit and the global trade war initiated by the USA, it is bigger and more buoyant than Russia’s.

Culture – what the World Cup has shown is that the people of Russia are in some respects, separate from Vladimir Putin. They have shown themselves to be warm and welcoming of all the football supporters and tourists who have descended on them, in contrast to some of the global policies of the Kremlin.

Infrastructure – in such a vast country it is challenging to keep the infrastructure up to date with the needs of its people, however in cities like Moscow its distinctive Metro system stands out, with elegant architecture at Metro stations and an efficiency of operation.

Property Investment in England vs Russia

There is a disparity perceived between returns associated with buying in emerging markets and property returns from more mature European property markets. But with those differences in returns, or profitability, comes higher risk.

Moscow Real EstateWhilst Russia is part of the European continent, its Foreign Policy does not always act that way and nor does its Real Estate Market in many respects. The latest Jones Lang LaSalle 2018 Global Real Estate Transparency Index/Property Index sheds some insight into this. Its focus is on the commercial property side, but it nevertheless acts as a proxy indicator of the state of residential markets, since many processes are similar e.g. ownership or title registration.

As global businesses have more choice over where to locate and base their offices and subsidiaries, this in turn creates an even greater need for high-quality market information, on which to base those decisions. Many countries are waking up to this, to become more competitive in their fight for this inward investment.

The world’s most transparent markets continue to be dominated by the more liquid Anglophone countries along with many European nations. The United Kingdom is the world’s most transparent Real Estate market in 2018, followed closely by Australia and the USA. This means the UK (including England) is THE benchmark when comparing other overseas property markets in terms of how the property buying process works and how transparent it is to buy property. Russia ranks number 38 in the League Table, ranked as a ‘Semi-transparent’ property investment market, just below Brazil.

So even before you consider the returns from your investment, where does ease and transparency of investing in property rank for you? And who wins the match?

Source: Jones Lang LaSalle, LaSalle Investment Management (100 markets covered and 186 factors assessed, including Real Estate investment performance, market fundamentals, regulatory framework and the investment transaction)

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