Moscow’s Skyscraper City Is Way Behind Schedule

Russia’s economy tanked as Europe’s tallest buildings popped up just a few miles from the Kremlin. As construction drags on, the city wants the new skyline wrapped up.

1473180024_mf_moscow38-2 — Photographer: Andrey Rudakov/Bloomberg via Getty Images

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By Jake Rudnitsky

September 7, 2016 at 10:00 AM UTC

This article is for subscribers only.

This article is part of the September 12, 2016 issue of businessweek.

The three tallest skyscrapers in Europe have all opened since 2013 on a riverfront site 2.5 miles west of the Kremlin. All that new glass-sheathed space hit the market just as the Russian economy tanked and vacancies for premium offices in the district soared to more than 40 percent. Today, with a recession stretching into its sixth quarter and office vacancies across the city stuck at 20 percent, the local government has a simple message for the builders still working at the site: Keep going.

The mayor’s office is pushing developers to complete the skyline of Moscow City—a district similar to Paris’s La Défense or London’s Canary Wharf—in time for the 2018 FIFA World Cup, when foreign tourists are expected to pour in for the world’s most-watched sporting event. The 374-meter (1,227 feet) Federation Tower, Europe’s tallest building, will open by yearend. And two more skyscrapers in Europe’s top 10 are expected to go up by the first kickoff. “The government hates that construction has dragged on for so long,” says Yulia Nikulicheva, head of strategic consulting at real estate brokerage JLL in Moscow. “Moscow City was always about prestige.”