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Putin's $50 Million Luxury Apartments for Powerful Allies

House No. 3 on Shvedskiy Tupik

Photograph by Google Maps

House No. 3 on Shvedskiy Tupik

Josef Stalin erected a huge luxury apartment complex across the river from the Kremlin to reward, and spy on, his closest comrades. The one Russian President Vladimir Putin built for his clique is much smaller and harder to find.

Tucked among a warren of Soviet-era structures less than a kilometer from the Kremlin, a drab, gated, 11-story brick building is watched over by the Federal Guard Service. House No. 3 on Shvedskiy Tupik, or Swedish Blind Alley, is under the protection of the state because many of its tenants are Putin’s most powerful allies, including VTB Group Chief Executive Officer Andrey Kostin, Gunvor Group oil-trading billionaire Gennady Timchenko, and ex-Finance Minister Alexei Kudrin, according to two residents who asked not to be identified because the information is private.

Two of the three dozen apartments, one 1,000 square meters (10,800 square feet) and the other 846 square meters, have been vacant for more than a year and are priced at $50 million and $42 million, respectively, according to Justified Quality Estate and Mayfair Properties, agents for the unidentified sellers. That makes them the most expensive flats in Moscow per meter, says Alexander Pypin, chief analyst at real estate researcher “Those prices protect the inhabitants from outsiders,” says Olga Kryshtanovskaya, an ex-member of Putin’s United Russia party who studies the elite at the Russian Academy of Sciences. “Residents are guaranteed to never meet anyone they would consider rabble.”

In 1931, Stalin’s secret police henchman Genrikh Yagoda oversaw the completion of the 505-apartment Government House. Almost all of Stalin’s top generals and officials lived there, including Red Army Marshal Georgy Zhukov and Nikita Krushchev, Stalin’s successor, according to Olga Trifonova, a novelist and curator of the museum dedicated to the complex. With its in-house restaurant, gym, food store, kindergarten, laundry, and 24-hour ambulance, the building quickly became the most prestigious address in Moscow after the Kremlin. People wanted to live there so badly, they didn’t care that every concierge was a spy with keys to each room and that a third of the residents became victims of Stalin’s purges.

The Kremlin Property Department, where Putin was deputy head from 1996 to 1997, completed the Swedish Blind Alley building in 2002, two years after Putin succeeded Boris Yeltsin as president. The complex has a 2,000-square-meter garden with benches, a fountain, and a children’s playground that can be seen through a 3-meter-high steel fence. Video cameras scan the building’s perimeter. The foyer is modest, says one businessman who has been a guest in the building. A kitchen and a billiard room on the ground floor allow residents to entertain guests without inviting them into their homes.

Other notable residents include Foreign Minister Sergei Lavrov, Deputy Prime Minister Sergey Prikhodko, former Communications Minister Leonid Reiman, Transneft CEO Nikolai Tokarev, and Sovcomflot Chairman Ilya Klebanov, one resident says. Similar communes have been reported by Russian media, including one near the government’s headquarters. Foreign Intelligence Service Chief Mikhail Fradkov, Kremlin Chief of Staff Sergei Ivanov, and Sberbank CEO Herman Gref all have homes in this building, the online news site Svobodnaya Pressa reported in 2010, without citing anyone.

The Kremlin Property Department won’t comment on the allocation of properties because it’s a “personal data” issue, Viktor Khrekov, a spokesman, said by e-mail. Kostin, Timchenko, and Kudrin declined to comment about the property via their press services, as did Lavrov, Reiman, Tokarev, and Klebanov.

Having so many powerful people under one roof drives up apartment values. The $50 million price tag on the Swedish Blind Alley apartment is overpriced by about 20 percent when compared with luxury apartments in Moscow, says Alexander Ziminsky, a department head at Penny Lane Realty in Moscow. “It’s a good flat with a great view, but there’s nothing supernatural about it,” Fedor Solomatin, director of JQ Estate, said in an e-mail about the apartment. It has 10 rooms, two fireplaces, and a spa with both Turkish and Finnish saunas, according to JQ Estate’s website.

Likely buyers are people who have business reasons to be near decision-makers, says Gleb Pavlovsky, a former Kremlin political adviser. “Russia’s elite loves to crowd into what the diplomats call settlements, or blocks isolated from the uncivilized tribes. These strange habits come from their self-perception of being unrecognized nobles.”

The bottom line: Putin is keeping up the Stalinist tradition of housing close associates in comfort, while keeping an eye on them.

Kravchenko is a reporter for Bloomberg News in Moscow.
Pismennaya is a reporter for Bloomberg News in Moscow.
Reznik is a reporter for Bloomberg News in Moscow.

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