Major state corporations own a large amount of real-estate that is liquid and attractive for investors. But in order to bring these assets to an open platform, a market for managing assets of state corporations must be formed, and also an understandable and transparent mechanism must be created for investing in this real-state – these points were stressed by participants of the discussion “Management of state and corporate property. How to include assets in market turnover”, as part of the PROEstate international forum.

“Today a situation has arisen when the state and state corporations, when taking decisions about what to do with their property: to lease it out, to an entrusted management, to leave it for themselves or realize it, face the choice of doing this independently or hand it over for outsourcing. Here you need to think as thoroughly as possible what path to choose,” said the general director of the AHR, the president of the Guild of Managers and Develops Andrei Stepanenko. As Mr. Stepanenko noted, owners of state assets face a large number of problems, the most important of which are the lack of an institution of professional public sales in Russia, and the need to choose operators for working with state property (sales, valuation, consulting), not by their professionalism, but by the minimum cost of work. The result of this perilous practice is a low quality of services, and thus a lack of trust in contractors. It’s a vicious circle: the owner does not have the necessary knowledge to realize state property, but is afraid to delegate these powers to a business, and as a result does it themselves, achieving a highly inefficient result.

A way out of this vicious circle may be the formation of a public, transparent market of state assets in Russia, which firstly involves the presence of openly working professional auction platforms, and secondly comprehensible transparent schemes of accounts with these companies. All over the world, the practice is applied of paying the seller’s fee by the efforts of the buyer of property, above the sale price. This is understandable and is used by all the auction houses of the world. Russia does not need to invent the bicycle, it can make use of methods that have already proved their effectiveness.

The deputy chairman of the government of the Moscow Oblast Alexander Chuprakov spoke of his experience of working with state property: “In the Moscow Oblast, this question has been discussed for a long time, but now we are working on systemizing our assets. We are forming a land asset, and developing a series of laws (for example, we have already passed a low on state-private partnership), and are also carrying out inventorying, which will allow us to understand how our lands are used, and what we are prepared to put up for open auction.” Mr., Chuprakov also noted that he was actively working with the Auction House of the Russian Federation on the sale of a major asset – Oblast estates.

The topic of a connection between the investment rating of the region and the results of privatization its assets were raised by the executive vice-president and head of the center of state-private partnership of Gazprombank Alexei Chichkanov. “There is privatization that we all understand, but there are also cases when privatization is understood as attracting a certain investor to the company’s business, who can change and improve its activity. This can be done by means of an IPO or private placement, i.e. with an investment bank, which will open the corporation’s eyes to a completely new investment market”.

“The time has come to understand where we are going, and what goals we want to achieve. We have reached a point when the state should develop a sensible land policy. In one speech, representatives of the authorities announced that over 8-10% of lands in the Russian Federation had moved from state to private ownership, That’s an extremely small amount! In the end, we must understand whether we want private ownership to predominate, or we do plan to leave the lion’s share of land with the state? It must be clear how we are going to regulate the rights of parties, and it’s very important to make the procedures simpler and more transparent,” says the head of the Department for property management and corporate relations at Alexei Kharlamov.

Ideas about how the Defense Ministry plans to deal with its property was shared by the deputy director of the Department of property relations at the Defense Ministry of the Russian Federation, Vladimir Zhukovsky. “The ministry has an enormous amount of property – over half a million objects of real-estate and several dozen million hectares of land. At present, a moratorium has been placed on the sale of these assets. While it is in effect, the Defense Ministry is preparing a concept for managing the military property of the Russian Federation,” Mr. Zhukovsky explained. “We expect that adopting a certain ideology will help to free up a considerable amount of property, which will become part of the national economy. In 2014, the Ministry plans a drastic increase in the number of objects for sale. The Defense Ministry will also continue building residential buildings for the military, and for those who have already done their service and have retired.”

Participants were interested by a speech by another representative of a major property owner, Russian Railways. The head of the property department of Russian Railways, Igor Pachosik, said that a considerable amount of objects of the company are located in regions with an undeveloped property market (the average price of a real-estate object sold in 2012 was 3.5 million rubles). If one evaluates the total income, about 20% is provided by the sale of assets, and 80% by leasing. “But it must be understood that our goal of working with non-core assets is not to receive the maximum revenue, but to solve social problems. It’s important for us that workers have access to various infrastructural objects: bathhouses, sanatoriums, recreation areas etc.,” Mr. Pachosik stressed.

State corporations are also worried about the issue of developing road service objects on federal highways. This topic was raised by the head of land property relations at the Federal road agency Yury Lakhin: “this is a specific state asset, but we believe that it also requires special attention. We don’t aspire to wide powers in the border strip, but at the same time we would also like to see these roads as an infrastructural environment.”

Besides the state, an important role in working with such assets is also played by business, on the part of consultants, investors etc. The president of NAI Becar, and vice-president of GUD Alexander Sharapov explained that commercial structures needed to fine-tune the system of working with state property. “Standards of work with corporate real-estate must be created in realizing and selling assets,” Mr. Sharapov stressed.

One of the most important issues remains legislative regulation. The deputy director of the AHR Olga Sokolova explained that legislation on privatization and management of state property is in a process of constant change and improvement. At present, state bodies for management of property are open for dialogue with business and the expert community, and are eager to learn about the best practices for preparing and carrying out transactions with deals for use in their own work.