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Developers’ ranking: on putting housing in operation, not on sales

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Developers’ ranking: on putting housing in operation, not on sales

What does the ranking of Russian developers show?

Kirill Kholopik, Director General of the Institute of Construction Industry Development, head of the Russian Association of Housing Developers (NOZA), answers the questions of our journal. 

— Mr. Kholopik, the 2016 developers’ ranking has been published recently. How does it differ from other rankings prepared by NOZA?

— We have been ranking developers as to the volume of the current construction for two years, and a lot of pretense has been addressed to us.  Performance, such as the volume of current construction, is said to be very big if a developer starts new projects again and again, but does not put anything in operation due to financial or other problems.

There is logic in the reasons, I must admit. For instance, over some period of time, the SU-155 company was among the Russian leaders, and we all know the end of that story. This is why it is fairer to rank companies according to the volume of the housing put in operation.

This performance may make it clear how much housing is actually provided by a developer. In 2016 we used this parameter for the first time.

It took a lot of effort, because there is little open information in official state registries, so we had to analyse project statements and check the data with every developer who entered the top 100. And now we see a realistic pattern throughout Russia.  

Whilst carrying out the investigation we came across a number of pitfalls. One of the problems was how to calculate the fact there are many objects, especially in Moscow, where housing amounts to only a third of the total area of a multifunctional building, including offices, a parking, a trade centre… 

Another problem is the absence of registries concerning putting the objects in operation. Such documents exist only in the Moscow and Leningrad regions, and in Saint-Petersburg, and make the analysis of the regional data accurate.

 

— Is there no such registry in Moscow?

— There is the highest informational openness in the construction sector of the capital, and it makes the monitoring and analysis easier. Actually, all the registries are open but, alas, there is no registry yet of the putting in operation permits. Speaking about Russia, not more than 25% of the total volume of the housing put in operation may be checked via open sources. However, there are positive dynamics. Presently, construction permit registries may be seen on the official websites of almost all the large cities of Russia (a couple of years ago there were not any), meaning that the openness of the urban construction policy has grown significantly.

 

— Of course, it is good, although the main thing for developers is not to put housing in operation but to sell it. Actually, all developers have problems with it. Is NOZA planning to make the developers’ ranking based on the performances of the sold housing? 

— Yes, we are going to make such a rating. I should admit that the only source of information in this field is the Rosreestr (Federal Service for State Registration, Cadastral Records and Cartography).  Although we work with these data efficiently, there is a problem. A new federal law, 218-FL “On state registration of realty”, came into force on January 1st, 2017, and some bases are not available. As soon as the resource resumes operation it will take us some months to get the developers’ ranking on sales volumes ready.  

 

— We wish you success. And now let’s consider the first ten developers of the top 100 list. By the way, the habitual leader of NOZA’s rankings, the LSR Group, is now in second position to the Setl Group holding. What does it mean? 

— The LSR GC from Saint-Petersburg is in the second place as to the volume of the housing put in operation in 2016, and they are gradually increasing the volume of construction due to new projects in Moscow. The company’s volume of the current construction has reached 2m sq. m, meaning that the annual volume of putting in operation will soon become 1m sq. m, which is half the volume of the current construction.

 

— Speaking about a million, the leader of the rating, the Setl Group holding, is just a little under 1m sq. m …

— This company regularly takes the leading places in Saint-Petersburg and the Leningrad region, which gives it the total of the large volume of housing put in operation. Besides, they have increased the volumes in the Kaliningrad region.

 

— The next in the ranking are two Moscow companies, Absolut and PIK, with practically similar results (562,000 and 557,000 sq. m, correspondingly) .

— Absolut has been the leader of current construction for the last few  years, specialising in New Moscow. They work only in one region, and this fact prevented them from taking the leading position.

However, they complete, commission and put in operation a lot of projects, but we do not see them start new construction. That’s why, according to our assessments, we shall not see them in the top 10 in 2017

 

— What can you say about PIK GC, which assimilated MORTON last year? 

— We did not unite the two companies in the 2016 ranking, as they were separate teams, but it was for the last time. MORTON won’t be present in the ranking of 2017. PIK is a powerful company, and after having assimilated MORTON, it became the leader in Moscow and the Moscow region, and they also have projects in other regions: the Rostov, Yaroslavl, Kaluga and Perm regions, and in the Krasnodar area.

The Etalon company from Saint-Petersburg also works in several regions and constantly increases the volumes of construction in Moscow. It develops dynamically and it may compete with the Absolut company regarding 2017’s results.

 

— The seventh in the ranking is the notorious SU-155, which used to be the first in all your rankings a couple of years ago...

— It is clear that these data should be referred to its bridge bank, Russian Capital, and as it is not a developer but a bank we have added the term “financial assistance”.  To remind you, last year media reported about a million square meters of the commissioned housing on the SU-155’s objects, but our calculations showed a much more modest figure of about 399,000 sq. m. And here we should speak on the disparate treatment of the word “commissioned”.

In our ranking, we only take into account getting a permit for putting in operation. Then the following stage is to get a statement of conformity from a building supervision authority. And only after that the information about commissioning a house is published.

Due to the Russian Capital bank’s activity, SU-155 became a leader in putting housing in operation during the first months of the year, in January-February, 2017. So, I think the company will remain among the first ten in the top 100 list in 2017 as well.

 

— And the last but not least companies amongst the first ten are Samolet-Development, Leader FCC and INTEKO. What about them?

— Samolet-Development is a dynamically growing company working mainly in the Moscow region, in Moscow and Saint-Petersburg.  I want to stress the high discipline of the company: they had no rescheduling or postponement in 2016.

Leader FCC is a financially steady company developing rapidly, and they will add more after the recent merging of DSK-1.

As far as INTEKO GC is concerned, its name speaks for itself. It is a growing company expanding to regions, in particular Rostov and Saint-Petersburg. 

 

— Do you think that developers (at least those who entered the top 100) will help you with the information about the permits for putting in operation, etc.?

— Presently, we make the developers’ top list of 2017 available online, and anytime one may go to our website and see who is who. The leaders of the ranking from the two capitals are followed by regional companies. A developer who wants to advance in the ranking may send us a document on putting an object in operation, and will automatically move to a higher position as there is more data about it. 

To my mind, it must stimulate construction companies to help us with information: the ranking needs to contain hard information about how much is constructed, and how much is put in operation.

 

— Does your ranking of 2016 depict the hardest condition of the construction industry when compared with other basic branches of the Russian economy?

— I would not speak about the crisis. But there is a sharp decrease of housing construction financing, and the fall of this performance (by 21% in 2016) resulted in developers’ actually working with a zero margin.

Meanwhile, construction is going on and the volume of the frozen construction is not increasing. It even decreases as soon as the construction process regains the objects of bankrupt companies (SU-155, Greenflight, etc.).

Nevertheless, we forecast a probable growth of the delayed putting in operation if current financing stays the same. It will happen even with the leading developers, who will not manage the plan of 2017 and will thus postpone putting housing in operation until next year. There is such a threat.

We shall add the information of delayed putting in operation for each developer and every residential compound to our ranking. It is important for a consumer.

Another project will start soon: all the governmental statistics characterising housing construction as having more than 1,000 performances will be in the open access. I am sure both specialists and consumers will appreciate this work.

 

Andrei CHERNAKOV

 

Top-100 developers in 2016 (putting housing in operation)

Ranking

Name

Region

m²

1

 Setl Group

Saint-Petersburg

979 983

2

LSR GC

Saint-Petersburg

756 590

3

ABSOLUT GC

Moscow

562 737

4

PIK GC

Moscow

557 818

5

Etalon GC

Saint-Petersburg

519 317

6

Morton GC

Moscow

506 022

7

Su-155 GC (financial assistance)

Moscow

398 842

8

Samolet-Development Group

Moscow

382 990

9

Leader FCC

Moscow

313 974

10

INTEKO GC

Moscow

295 007

11

CDS GC

Saint-Petersburg

277 031

12

NSI

Krasnodar area

273 135

13

MIC GC

Moscow

250 551

14

Brusnika

Tiumen region

247 754

15

Vybor CC

Voronezh region

229 967

16

KORTROS

Moscow

216 326

17

UIT Holding

Moscow

205 271

18

ISK Zapad

Ulianovsk region

203 834

19

Yug-StroyInvest GC

Stavropol region

196 687

20

Tomskaya DSK GC

Tomsk region

195 936

21

Seven Suns Development

Saint-Petersburg

188 774

22

Kazan ZhIK GC

The Republic of Tatartstan

182 552

23

DSK

Voronezh region

175 296

24

TDSK

Tiumen region

163 869

25

SUVAR HOLDING GC

The Republic of Tatarstan

158 103

26

Saratovoblzhilstroy Holding

Saratov region

157 284

27

Dom PSK

Tiumen region

154 034

28

Pioneer GC

Moscow

153 679

29

Tver DSK

Tver region

152 593

30

Avesta-Stroy

Moscow region

145 509

31

VKB Novostroiki GC

Krasnodar area

145 111

32

Polis Group

Saint-Petersburg

144 883

33

OPIN DG GC

Moscow

140 187

34

Atomstroycomplex

Sverdlovsk region

140 019

35

Centrstroy GC

Moscow region

136 175

36

Granelle Group GC

Moscow

132 027

37

Development –Yug GC

Krasnodar area

124 326

38

DSK GC

Moscow region

123 231

39

Unistroy

The Republic of Tatarstan

122 582

40

OBD Invest SIK

Krasnodar area

122 408

41

Edinstvo GC

Riazan region

119 039

42

Sinara-Development

Sverdlovsk area

118 667

43

Expert GC

Moscow region

117 434

44

Sezar Group Holding

Moscow

116 646

45

Leader Group

Saint-Petersburg

116 116

46

Bonava

Saint-Petersburg

116 089

47

GBSU Centre holding

Moscow

115 972

48

RosStroyInvest GC

Saint-Petersburg

113 370

49

Siberia Business union holding

Kemerovo region

112 450

50

Instep

Voronezh region

112 076

51

ASK GC

Krasnodar area

110 350

52

KASKAD Family

Moscow

109 691

53

BFA-Development GC

Saint-Petersburg

109 393

54

Amond GC

Samara region

108 211

55

INVESTSTROY GC

Moscow region

107 539

56

Komos-stroy

Udmurtia

107 188

57

GALS-Development

Moscow

106 926

58

MonArch GC

Moscow

106 296

59

Siberian USK

Krasnoyarsk region

103 884

60

Kirov SSK

Kirov region

103 336

61

Baltic pearl

Saint-Petersburg

101 594

62

TERMODOM CH

Penza region

97 272

63

RKS Development GC

Moscow

96 932

64

INGRAD GC

Moscow

96 552

65

Oykumena GC

Moscow

96 456

66

Shaldom CC

Saratov region

90 784

67

GRAZHDANSTROY GC

Smolensk region

90 344

68

ZhBK-1 Corporation

Belgorod region

89 640

69

Promstroy ASO

Kemerovo region

89 520

70

Soyuz ISK

Altai area

89 252

71

Oryolstroy HC

Oryol region

88 809

72

Zhilstroy NN

Nizhny Novgorod region

88 207

73

Novy DON GC

Samara region

87 863

74

А101 DEVELOPMENT

Moscow

87 444

75

ENKO GC

Tiumen region

86 654

76

SKM CC

Kirov region

86 117

77

Arban GSK

Krasnoyarsk area

85 308

78

TEN GC

Sverdlovsk region

85 307

79

Normann

Saint-Petersburg

82 462

80

KomStrin GC

Moscow

82 401

81

KPD GQAZSTROY GC

Novosibirsk region

81 087

82

Construction trust

Saint-Petersburg

79 954

83

DOMKOR

The Republic of Tatarstan

79 283

84

DONSTROY

Moscow

79 275

85

ISK Algorythm

Altai area

78 412

86

KGIS

Krasnodar area

77 422

87

STROYBETON GC

Omsk region

77 132

88

Strizhi GC

Novosibirsk region

77 033

89

Kronverk company

Saratov region

76 623

90

PETROSTROY CC

Saint-Petersburg

76 250

91

Orenburgstroy GC

Orenburg region

75 655

92

Magnitostroy Trust

Cheliabinsk region

75 618

93

Drevo DK

Samara region

75 551

94

Domostroitel GC

Moscow

75 036

95

METAPRIBOR CC

Novosibirsk region

75 032

96

ChGS CC

Cheliabinsk region

73 367

97

EXPO-Stolichny

Tiumen region

73 263

98

Krasstroy GC

Krasnoyarsk region

72 978

99

VDK

Voronezh region

72 440

100

Flagman GC

Krasnodar area

72 322

Source: NOZA

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