KUGI raises the rent

<BR>Starting in 1998 a new market system of rental rates for non-residential property belonging to the city will be in effect in St. Petersburg. The Petersburg legislative assembly passed the law concerning "market rental rates" in the beginning of September, 1997. Before taking effect the Petersburg governor Vladimir Yakovlev plans to sign the order thus confirming the method of determining the rental rates. According to KUGI chairman German Gref, the new rental rates will be gradually introduced into effect. New rental contracts will be drawn up based on the new rates, and old rental contracts will be updated when the law takes effect. For several tenants rent will increase and for several rent will decrease. Both the increase and the decrease will take place gradually: each quarter rent will be increased or decreased by 25%. Gref admitted that it is still undecided exactly what the 25% will be based on (either the new rental rates or the difference between the old and new rates). In any case, KUGI specialists are predicting a 5% decrease in rent collection for the first quarter of 1998. According to Gref, the rental costs for budgeted organizations will substantially grow. Most likely, some spaces now occupied by budgeted organizations will be vacated. For some tenants who now have low rental costs the new rates will mean that there will be a rental increase by 40-60 times.