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

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 1^st, 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