Experts estimate that over $1bn, (through hotel developments and transactions), has been invested into the Moscow hotel market in the last 2 years, indicating clear evidence that international and domestic investor interest is intensifying, according to Jones Lang LaSalle Hotels. Other Russian cities are also starting to attract similar attention as investors are looking at new emerging hotel markets outside the capital.

Mark Wynne-Smith, European CEO at Jones Lang LaSalle Hotels, said: “ Russia is achieving outstanding economic growth and its annual GDP figure is growing at an average rate of 6.4%. This is driving both foreign and domestic investors to gain a foothold in the market. FDI into the country topped $18 billion last year so we are seeing that investors are seriously looking at the market and the hotel sector is reaping the rewards.”

He concluded: “Evidence of the appetite for hotel assets has been demonstrated in a number of ways over the last 18 months – investment firms have announced their intention to create funds for investment in the Russian hotel industry, such as the ‘Hotel Real Estate’ fund by Finam investment holding. Further evidence includes - European real estate lending institutions offering greater lending facilities for Russian hotel investments with strong support from their Russian counterparts. As a result, there have already been some high profile hotel deals.”