Why Wealthy Russians Are Choosing Real Estate Funds Over Direct Ownership

After a period of high rates kept wealthy Russians away from property, falling borrowing costs are pulling them back, but the way they are returning is changing. Direct purchases of apartments and commercial premises remain the most common route in private banking, yet closed-end real estate mutual funds, known as ZPIF-n, are now the fastest-growing segment, according to executives at VTB, T-Bank, PSB and MTS Bank.

The funds let investors own a stake in professionally managed commercial property without buying a building. Instead of a single asset requiring a large cheque, investors can enter with a few thousand roubles, spread money across several objects and tenants, and leave acquisition, maintenance and sale to a management company. Only ZPIF units offer a way to gain direct real estate exposure through the stock market, says Ruslan Khismatullin of Solid Invest: unit holders become owners of the real estate inside the fund.

The appeal is not purely entry cost. Direct ownership, bankers argue, turns an investor into a landlord: finding contractors, paying utilities, handling leases and disputes. Selling a whole commercial property or an expensive apartment can take months to a year, and an urgent sale usually means a discount. A diversified direct portfolio realistically starts at 50–100 million roubles, while the average first investment through a fund's direct channel is about 100,000 roubles, and partner-channel tickets run from 600,000 to 5 million roubles, according to Accent Asset Management.

What the ZPIF Shift Changes for Investors and Asset Managers

The landlord burden is the main reason for the switch

Quotes from T-Private's Dilsod Ibragimov and MTS Bank's Svetlana Khabarova point to a simple logic: many wealthy clients want income from real estate but do not want to run a property business. Direct ownership requires due diligence, legal support, tenant management and constant operational oversight. By comparison, a ZPIF transfers those tasks to a professional manager, which is why Khabarova calls the instrument a main driver for bringing private clients into commercial property without direct ownership.

The entry ticket has collapsed, and so has the concentration risk

Vladislav Popov of PSB and Andrey Ogorodov of Accent Asset Management emphasise diversification. A direct investor needs 50–100 million roubles to build a diversified portfolio, but a fund unit can cost a few thousand roubles and is spread across multiple objects and tenants. Ogorodov says Accent already has more than 5,000 unit holders and a steady inflow, with direct-channel investors often starting around 100,000 roubles. VTB's Evgeny Beresnev adds that ZPIFs remain less than 1% of private savings, implying room to grow.

Tax and liquidity arguments are concrete, not marketing

SberNPF's Olga Izyumova notes that a ZPIF is not a legal entity and pays no profit tax; taxation arises only when a unit holder receives payouts or sells units. Because investors sell units rather than the underlying property, funds can be more liquid than direct ownership, though actual liquidity depends on the exchange market for the specific fund. These features are attracting not only private clients: Sberbank's NPF has included real estate ZPIFs in a dedicated strategy, and Rosgosstrakh Life says it is considering test investments under future regulation.

How Investors Can Compare ZPIFs With Direct Property

For wealthy Russians weighing property exposure, the ZPIF route changes the practical economics in five ways:

  • Start with the real entry cost. A diversified direct portfolio is estimated at 50–100 million roubles, while ZPIF units start from a few thousand roubles and direct-channel first investments average about 100,000 roubles.
  • Compare the ownership burden. Direct property requires managing contractors, utilities, leases and disputes; a fund's management company handles selection, operation and sale, reducing the investor's operational role.
  • Check the tax treatment. The fund itself pays no profit tax; tax is triggered only when you receive payouts or sell units, which differs from holding property directly.
  • Weigh liquidity honestly. Selling a whole commercial property can take several months to a year and urgent sales often carry a discount; fund units are sold on the exchange, but liquidity varies by fund.
  • Use the fund's diversification rather than concentrating risk. One unit spreads exposure across several properties and tenants, whereas a single direct purchase concentrates the investor in one asset and one rental stream.