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Rehabilitating Telman Ismailov

Russia Profile has an interesting piece looking into the efforts of real estate mogul Telman Ismailov to get back into the good graces of the Kremlin.  Having seen what is happening to Mayor Yuri Luzhkov, Ismailov’s rehabilitation campaign is conspicuously timed.

The government’s indignation at the lavish opening ceremony was one of the reasons why Ismailov lost his most profitable project – the Cherkizovsky Market, which was closed by Moscow city authorities in June 2009. The Cherkizovsky Market, also known as “Cherkizon,” was one of the largest marketplaces in Europe. It employed roughly 100,000 workers, mostly illegal migrants from China and other Asian countries, and was known as a hotspot of crime and racist attacks on immigrants. When the market was closed, most Muscovites supported the decision, a poll conducted by the independent Levada Center found.

In light of the above, it is possible that investing in Sochi may help “rehabilitate” Ismailov in the eyes of the authorities. “It is fair to suppose there being political reasons behind building the hotel complexes in Sochi, but generally speaking it is profitable to invest in the hotel sector in Russia,” said Maxim Klyagin, an analyst at Finam Management. “The hotel market is completely unsaturated. There is a pronounced deficiency of good-quality accommodation in the country. Even in the largest Russian cities the number of available accommodation is five to ten times less than in west European capitals. In many middle-sized cities there still are no quality hotels. But in Russia the success of each investment project depends a lot on the location of the hotel, while in west European countries local markets are more stable and balanced. Obviously, revenue per available room in Moscow is now one of the highest in the world. Probably, the situation in Sochi would be the same,” he added.