In russia, Auctions for the Sale of State Property and Business Assets Are Failing One After Another

The protracted war against Ukraine, international sanctions, and putin’s unwillingness to end the war continue to devastate russia’s economy. Evidence of this deep crisis is the fact that both state agencies and large private companies in the rf are forced to put their key assets up for sale en masse just to get some money. However, no one wants to buy russian property amid instability and a shortage of personnel.

Several high-profile failures in the real estate and privatization markets show that business in russia has reached a dead end. Even in the very heart of the russia’s capital city, state-owned property has lost all appeal for investors. The second auction for the sale of the historic Riga railway station building was officially declared a failure. The reason: not a single bid was submitted for the auction. russia’s authorities had hoped to raise at least 4 billion rubles for the property. But to no avail.

The situation in the strategic mining sector is similarly dire. “rosimushchestvo” has announced the third auction for the privatization of assets belonging to “yuzhuralzoloto” and its affiliated entities, with a total value of 162 billion rubles. The first auction in May failed because there were no bids at all. They attempted to hold the second (Dutch) auction with a 50% discount, which would have been a loss for russia. Even though the court had “written off” 17 billion rubles of the company’s debt, the only investor who showed up was unable to provide the necessary documents. Now, in desperation, the authorities have lowered their requirements – just one buyer will be enough for the third auction to be deemed successful. However, the chances of finding one amid the financial drought are extremely slim.

The war has hit not only state-owned assets but also the retail sector. One of russia’s largest clothing brands, “gloria jeans”, is frantically seeking buyers or tenants for its last remaining large factories in rostov region, with a total area of over 148,000 square meters.

The chain’s founder vladimir melnikov has gone so far as to personally beg the ministry of industry and trade of the rf to help find at least some buyers. The ministry sent proposals to 44 large companies, but none of them showed any interest.

The company’s crisis has been ongoing for several years. “gloria jeans” has already sold three of its five factories. The reason is a common one for russia’s war economy: a critical labor shortage (due to mobilization and people leaving, there is simply no one left to work at the factories).

The economic reality in the rf in 2026 is clear: businesses have no money, purchasing power is falling, and the labor shortage is crippling production. Attempts by the kremlin and private entrepreneurs to stage a “big sell-off” to get cash are running up against a harsh reality – investors do not want to invest in an economy that is plummeting into the abyss.