The Cabinet approved a bill on rents that assumes an annual growth of 9.3% in regulated rents. Prices should start increasing as of October 2006. It is estimated that there are 750k regulated flats, i.e. 20% of permanently occupied flats. The bill still needs to be approved by both parliamentary chambers and signed by the president. Note that regulated flats distort market rents and real estate prices. Increases in regulated flat rents should lead to downward pressure on market rents and real estate prices. Orco’s revenues from residential development formed 80% of total sales in 2004. Source: Bloomberg