Establishment of commercial real estate placement and management system in the city
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IOP Conference Series: Materials Science and Engineering
PAPER • OPEN ACCESS
Establishment of commercial real estate placement and management
system in the city
To cite this article: Boris Khrustalev et al 2020 IOP Conf. Ser.: Mater. Sci. Eng. 869 062043
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FORM-2020 IOP Publishing
IOP Conf. Series: Materials Science and Engineering 869 (2020) 062043 doi:10.1088/1757-899X/869/6/062043
Establishment of commercial real estate placement and
management system in the city
Boris Khrustalev, Tatyana Chudaykina, Zarema Ayupova and
Denis Zhelihovsky
Penza State University of Architecture and Construction, Germana Titova str., 28,
Penza, 440028, Russia
E-mail: hrustalev_bb@mail.ru,
Abstract. Most often, new buildings are the whole areas which grow on the place of former
waste grounds or departmental territories. These are the sites, remote from the centre, having
nothing in common with trade or business parts of the city. Design codes oblige to put public
establishments in the projects. These buildings located in "dormitory area" are also offered by
builders as "favourable investments". Purchaser’s choice of an apartment is very important. In
these conditions people are going to live for a long time or may be all their life. That is why
much depends on it. It is, of course, the conscious choice. Materials and methods. Methods of
the research are theoretical analysis and empirical research, in particular the analysis of
statistical data, as well as description and grouping of data. The information base for studying
this problem were literary sources (textbooks, manuals) on the problem of enterprises
activities, scientific articles, monographs, electronic resources. Methodological basic of the
research are such scientific methods as description, comparison, classification. Results. This
article analyses the placement and management of commercial real estate in residential many-
storeyed buildings, which is considered both on the positive and on the negative side. A
general analysis was made, classifications, characteristics were given, as well as patterns of
placement of commercial objects were revealed.
1. Introduction
With the development of real estate in Russia, issues related to the management of real estate objects
are of particular relevance. This is especially true for commercial real estate. As a source of income,
commercial real estate is now becoming an important investment.
There is an increasing number of investors on the market wishing to invest their capital in commercial
real estate. Therefore, it is relevant to carry out an analysis of the investment attractiveness of
commercial real estate objects, i.e. to assess the characteristics of the operating conditions of the object
that determine the return on investment. Such analysis will give the most value to the investor if the
quantitative value of investment attractiveness is determined, allowing to rank real estate represented
on the market.
On the other hand, it is important for the owner or manager of a commercial real estate object wishing
to attract investments or to sell its object on the market profitably, that the indicator of investment
attractiveness takes a higher value. To do this, the owner needs to manage the object in a certain way
on the basis of investment attractiveness.
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Published under licence by IOP Publishing Ltd 1FORM-2020 IOP Publishing
IOP Conf. Series: Materials Science and Engineering 869 (2020) 062043 doi:10.1088/1757-899X/869/6/062043
This problem is particularly relevant for commercial real estate objects owned by industrial
enterprises. Low investment attractiveness and often inefficient management system of these facilities
do not allow to develop them.
If the analysis of placement is carried out using practical approaches, taking into account the factors of
accessibility, as well as to focus on the commercial success of the real estate object, it is possible to
identify the degree of development, thus increasing the level of efficiency of selection and justification
of commercial decisions.
Most often, new buildings are entire areas that grow on the site of former deserts or departmental
territories. These are remote areas that have nothing to do with the commercial or business parts of the
city. Design standards oblige to lay public premises for consumer services enterprises in residential
housing projects. These premises located in the "sleeping area" are offered as "profitable investments"
by their developers.
The choice of apartment is very important for a buyer. Conditions which people will live in for a long
time, and perhaps for the rest of their lives depends on it. It 's, of course, a considered choice.
A reasonable buyer purchases not only square meters today, but also infrastructure. A large number of
people first choose an area: firstly, one should analyse the availability of transport, shops, hospitals
and other important facilities. Most future owners want to maintain their former way of life:
kindergarten, school, parking lot, availability of large shopping centres, as well as shops with
pedestrian accessibility, all this will help to create a cosy atmosphere, especially in large cities where
residents try to save their time. At the same time, people wishing to buy an apartment think about the
safety of housing, environmental friendliness, as well as conditions that will allow to ensure comfort
of living: lack of industrial noise, cleanliness in the adjacent territory of the residential complex and
probably a moderate flow of people.
Choosing a successful place is not enough, it is important to acquire it rationally, because instead of
quiet living, it is possible to get a lot of problems and long years of being in a residential complex,
where elementary norms are ignored, for the sake of commercial success.
2. Literature review
Problems of formation of housing market and commercial real estate in the cities of Russia and Penza
region are reflected in the works of Grabovoy P.G., Zagidullina G.M., Khrustalev B.B., Grabovoy
K.P., Pchelintseva O.S. and others.
Asaul A.N., Buzyrev V.V. in their works considered economic and mathematical modeling of the
functioning and development of the housing system of the region. Problems of regulation of the
housing market are reflected in detail in the works of Larionova Yu. V., Gregoryev V.V., Binkin
B.A.. Several authors devoted their works to the study of territorial and sectoral peculiarities of the
development of the construction industry and commercial real estate. Among the foreign scientists
who devoted their scientific works to the study of the housing market in a volatile and unstable
environment are F. Kotlyar, S. Melman, R. Paturell, M. Rice, M. Oxley, D. Sinka, J. Jennekens, I.
Ansoffa, W. Deminga, J. Millera..
Overview of approaches and management methods of commercial real estate
Real estate objects are, on the one hand, one of the most common assets available to most enterprises
and organizations, and, on the other hand, an asset capable of generating a stable and high income to
the owner. This makes it necessary to constantly monitor the conditions of real estate use by
enterprises and organizations (owners) and encourages the participation (involvement) of real estate
objects in commercial turnover.
Real estate management can be carried out by the owner of the object independently, or by involving
the managing company. In order to make a decision on the exercise of real estate management
functions, the owner needs to compare the intended goals and objectives of management with the
available resources (professional, temporary, financial, logistical). The owner's functions of real estate
management is the most useful in cases where the management object has a small area (usually not
more than 500 square meters); designed for commercial use for a short period of time (usually less
than 2 years); is an integral part of the larger property used by the owner for the main activity; requires
for management the diversion of the owner 's temporary, logistical, financial and management
2FORM-2020 IOP Publishing
IOP Conf. Series: Materials Science and Engineering 869 (2020) 062043 doi:10.1088/1757-899X/869/6/062043
resources, which will adversely affect the progress of the owner 's main activities; does not require
separate operation contracts (utilities, maintenance, etc.); does not require reconstruction or major
repairs; is used in accordance with the principle of the best (most efficient) use; provides a level of
income: a) sufficient to recover maintenance and repair costs, as well as to generate profits; b)
comparable to income level for similar objects (rental rate level and other types of income); has an
occupancy rate (by tenants) close to the maximum (usually not less than 90%); the management
project's return on the cost of management services is negative; independent management, which fits
into the existing organizational, logistical and financial structures of the owner.
Failure to comply with the above conditions means that it is impractical for the owner to perform
independently the functions of real estate management and to involve a professional management
company.
The choice of the form (methods) of transfer of real estate objects to management depends on the main
goals of the owner and is determined on the basis of the following criteria: compliance of legal
possibilities of use of the object by the managing company with the goals of the owner; observance of
the rights of the owner with respect to the transferred object, including protection against the risk of
loss of the transferred property; maximization of income of the owner and managing company from
real estate management (including minimization of tax payments); convenience of paperwork.
3. Materials and methods
The methodological basis of the study is based on the thesis of the general economic theory, the theory
of regional and sectoral economies, the theory of management, as well as on the systemic approach,
which allows to comprehensively study the peculiarities of the management of the regional investment
and construction complex at the modern stage of the unstable economy.
The main methods of research were used: methods of economic-statistical analysis, questionnaires,
method of expert assessments, as well as tabular and graphical methods of visualization of statistical
data. The Microsoft Excel application programmes were used to process the source information.
4. Results
We would also like to analyze possible options for using the first floors of residential many-storeyed
buildings, to emphasize their advantages and possible disadvantages, as well as to concern the problem
of the need for shopping malls in Penza today.
Street retail is a form of commercial real estate, which is a trading space located on the first floors of
buildings, having a separate entrance and its own show-windows.
The shopping mall ― the fundamental building built by the owner for the purpose of receiving
commercial profit by leasing of floor spaces to the companies tenants (in particular, to retail chain
stores) or for placement of its own retail chain stores.
5. Discussion
Information on the location of the research objects
For the analysis of commercial objects such districts of Penza city as: Pervomaysky; Octyabrsky
(Distant Arbekovo); Octyabrsky (Near Arbekovo); Leninsky are considered. An overview on the
location of the research objects is given below (Table 1).
In Pervomaysky district of Penza private houses as well as many-storeyed residential complexes, such
as in "Satellite" district are located. In recent years the above mentioned district has been increasingly
popular for the purchase of apartments, as its availability attracts many customers. We would like to
note that there are only two shopping malls in this district which are popular among locals. We think
that it would be convenient not to each inhabitant of "Satellite" district to visit these malls as the area
of housing estates grows every year more and more, and the rate of building practical commercial
objects doesn’t grow much.
The central part of Penza city is saturated with various shopping malls, as well as shops in residential
buildings. We can say that the trading platform in Leninsky district is well developed, only tenants in
shops and shopping malls change.
3FORM-2020 IOP Publishing
IOP Conf. Series: Materials Science and Engineering 869 (2020) 062043 doi:10.1088/1757-899X/869/6/062043
Table 1. Information on the location of the research objects
Information on location
Pervomaysky district
Octyabrsky district (Distant Arbekovo)
Octyabrsky district (Near Arbekovo)
Leninsky district
4FORM-2020 IOP Publishing
IOP Conf. Series: Materials Science and Engineering 869 (2020) 062043 doi:10.1088/1757-899X/869/6/062043
As for Zheleznodorozny district there is a meagre selection of decent commercial facilities, mainly
many warehouse facilities, but nevertheless mainly shops are located in residential buildings, which is
convenient for local residents.
Oktyabrsky district of Penza is actively being developed, the commercial component is also being
developed. A large number of shopping malls, shops, offices makes it attractive for the citizens.
Table 2. Analysis of commercial real estate in Penza
Name of Shopping Mall (SM) Area, sq. m Classification of SM
Pervomaisky district
SM Retail Park 56 000 Regional
SM "Slava" Regional
15 000
District
Hypermarket "METRO Cash & Carry" 9 500 District
Regional
SM "Okruzhnoy" 3 200
District
Regional
SM "Kub" 6 000
District
Regional
Supermarket "Ashan" 6 000
District
Regional
SM "Raduzhny" 2 966
District
Leninsky district
SM "Vyshaya Liga" 11 000 District
SM "Arbat" 6 000 District
SM "Empire" 3 200 District
SM "Passage" 27 000 District
SM "TsUM" 17 300 District
SM "Gostiny Dvor" 9 000 District
SM " Sun & March" 20 000 District
SM "Suvorovsky" 20 000 District
Zheleznodorozhny district
Trade and Fair Complex "Krasnye Kholmy" 40 000 District
SM "Muraveynik" 35 000 District
Hypermarket of building materials "Vector" 3 350 Specialized
Regional
SM "Vostoc" 3 000
District
5FORM-2020 IOP Publishing
IOP Conf. Series: Materials Science and Engineering 869 (2020) 062043 doi:10.1088/1757-899X/869/6/062043
Oktyabrsky district
Regional
SM "KaGau" 6 000
District
MSM "Collage" 45 000 Regional
Hypermarket "Lenta" 9 000 District
Hypermarket "Moya Rodnya" 4 000 Specialized
Regional
SM "Prospect" 10 020
District
SM "Cosmos City" 12 000 District
SM "Olympus" 15 200 District
Regional
SM "Berlin" 7 500
District
SM "Mega Penza" 5 000 Specialized
Regional
SM "Onezhsky" 5 778
District
Regional
SM "Streletsky" 3 698
District
Regional
SM "Salyut" 3 013
District
6. Conclusions
In conclusion we can say that building of commercial objects in Penza is at a very slow rate, it is
almost under way. This tendency is due to the fact that there is practically no need for these objects.
Every year, shops located in residential many-storeyed buildings are gaining increasing popularity.
And there are a number of features of these sites, such as:
• Convenience for locals;
• Saving building space for shops;
• Apartments on the first floors for residential purposes are always less attractive for purchase, actually
and the price of them is lower;
• Different filling of the area for both commerce and office.
If we analyze the announcements on sale of real estate, we can see that there is a tendency that even in
the building construction the first floors are immediately given for commercial sale.
In our opinion, in the city of Penza a sufficient number of shopping malls, the construction of new
ones will not bring enough profit for its investors.
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6FORM-2020 IOP Publishing
IOP Conf. Series: Materials Science and Engineering 869 (2020) 062043 doi:10.1088/1757-899X/869/6/062043
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