11 January 2018
«There are no people left who made a fortune on construction business»
The real estate market rapidly changes in front of our eyes, and in most cases this is done due to authoritative decision «from the top», with help of legislation. How it is perceived by market players and what the consequences will be, Andrey Kolochinskiy, managing partner of «VectorStroyFinance» told in his interview to mirkvartir.ru portal.
What did you have to (if you had to) change in the company’s activities correspondingly with amendments to 214-Federal Law that entered into force last year?
We had time to get ready. The changes were announced quite in advance.
The amendments that will enter into force this summer, mostly concern the receiving of permission for development, the amount of housing under construction. We correspond to all these parameters. This second amendments set is mostly aimed at pushing out small developers. Or at very careful attention to small developers of one small projects. We are not like that.
I can say for sure that it didn’t get easier since the amendments entered into force.
I believe that these are maximum possible requirements for the maintaining of rights of equity construction participants. No more are needed.
In October the Shareholders Compensational Fund started its work. Will shareholders now be able to feel fully protected? How the fund’s work will influence developers’ activities?
I would state 100% safety - it is simple not possible in life. But to a very high extent shareholders will be protected. At least, not less then people who make deposits in banks. There is always (despite that its very little) possibility that a bank will go bankrupt.
To be honest, I can’t even imagine an option to deceive shareholders today. Even if there was any evil intention, it is impossible to do from the technical point of view. The total control from banks’ side is envisaged. One should not forget that all of us take credits, and the process of control and analysis of developers by banks is very meticulous. It is very hard to deceive anyone, and I can’t even imagine how it is possible to let illegal expenditure of financial funds happen.
So this wave of stories about deceived shareholders will rapidly decrease to zero. Stories of today’s deceived shareholders started two-three years ago. First, problems start, then the bankruptcy procedure - these are inert processes that even according to legislation take from 1,5 to 2 years.
After all innovations will have entered into force, there will be no, I am convinced, deceived shareholders. But it will be clear only in 2019-2020 years. Of course, there might still be single cases, but it will stop being a socially significant problem for sure.
Earlier there have been suggestions to differentiate the fee amount to Compensation fund, making it less for honest developers. Now Moskomstroyinvest, on the contrary, considers it reasonable to increase the fee amount, as 1,2% of Agreement of fractional share will not cover risks of big apartments buyers. What is the maximum fee amount that you consider appropriate? Will the increase of fee amount be reflected on the price of apartments for buyers?
At first, Minstroy suggested fee amount in 2,5%, up to 5% from AAF. They have these plans. We can’t conquer it. But if they will increase it up to 5%, this will undoubtedly result in prices growth.
It is important to understand that 1,2% is a gross recipe tax. This is a lot of money. Even if the amount of payments will reach 2% - this will be a blow. Insurance was cheaper - 0,8-1% and 2% - in money equivalent the difference is huge. So, unfortunately, prices for apartments might rise. And it project financing will enter into force as it is announced now, this will undoubtedly lead to prices growth. And as a consequence - decrease in sales. And unfortunately, not all developers will handle it.
When equity construction will be prohibited, what, in your opinion, will happen to the market? Your company, for instance, will be able to continue constructing on banks’ funds?
This initiative, most likely, will undermine the market, the amount of construction will decrease.
I don’t exclude the option that at first the whole market will come to a standstill. Reformation of bank product will be needed.
I am, actually, not sure that banks are ready for it. They will be told: give big, long and cheap credits. On the other hands, Centrobank will punish them for the issuance of unsecured long-term credits.
Plus, we always consider the problem from developers point of views, Minstroy, AIZHK and other state authorities. But the problem has to be considered from the point of view of simple people. How I, as a physical body, can be deprived of the right to participate in equity construction? If I want to put my money at stake and buy an apartment much cheaper? If I understand the risks and don’t plan to make government responsible for them? How can I be deprived of this right? This is wrong, this is a limitation of citizens’ rights.
Real estate prices will grow significantly, no one will construct at a loss. And absolutely inevitably a part f companies will be forced to quit the market. Many will leave, because construction in this form will simply cease to be a business object. And many will not be able to correspond to the new demands.
To be honest, I watch this whole story with caution, understanding how many work places this market creates and how many people are involved in this field, in construction factories, sales, and, as a result, in finishing, projecting and so on. This is a huge industry. If only developers would disappear from the market, maybe, no one will be too sorry. But it will lead to everyone else’s disappearing.
I sincerely believe that today equity construction participants are protected. The idea to introduce project financing is, undoubtedly, not a bad one, this scheme is used in the world for a while now. But I think that in our market realities this action is quite preliminary.
Medvedev earlier announced that in Russia conditions are almost ready to decrease mortgage rates down to 6-7%. Is it possible and when, according to your estimations, this might happen?
Quite possible, down to 7% - for sure, this tendency exists. This is the state line: the path to decrease mortgage rates is set, to support the construction field. This was announced multiple times. The state wants to help people buy housing and, as a result, to support construction field. This is being realised, we see that mortgage rate decreases. But there is another trend - intruduction of project financing, that fully wipes out this work. This is a contradicting movement: let’s support construction field, let’s make mortgage cheaper, and on the other hand - let’s introduce project financing. In my opinion, they should find a golden mean.
Right now we see that the support of mortgage buyers is realised on practice, which is right and very good. It will be a pity if all this positive trend will fail because of another law. Giving here - taking away there.
The market needs positive changes. The decrease of mortgage rates had to be supported. But it is the state’s task. From our part we, sincerely, made everything that we could. There are no people left who is making a fortune on construction business. Everyone is working meticulously and attentively.
By the way, how much has developers’ marginality and projects’ profitability decreased? For example, how much time it will take for your project «Kvartaly 21/19» on the former industrial zone «Gryvoronov»to pay off?
In general, it’s important to understand the during the term of realisation of such a mass-scale project are ours, and comparable to it (which is 6-8 years), first 2/3 of the way nobody is even talking about the distribution of incomes. First two thirds of the term is returning of attracted credit resources. Plus you have to return your own invested funds. So first we will pay our outer debts, to crediting institutions, then we will return our own invested funds and only then the distribution of financial results of the project will happen.
Of course, all developers would like to earn at least more than the bank deposit. But I can say for sure that all developers, including us, have decreased our «appetites» concerning marginality. The business has become, objectively, a low-income one. It can give big gross income in case if the construction scale is big. But is is gross income. In terms of percentage figures this is far not the most profitable business.
What do you think about the renovation program in Moscow, that is being prepared now?
Everything that the city authorities are doing is right. And, of course, this will change the market in a way, but it is hard to forecast yet how exactly. The mechanism and the pace of the realisation of this program are not fully clear yet. When the apartments that have been announced for sale will start to be constructed is not clear. But when commercial spaces for realisation will appear this will, of course, change the market, reformat it. I think the this topic will be relevant in a year or two. But if the scale and the pace of the construction will be accomplished, a big amount of supply will appear on the market.
City authorities don’t attract commercial developers, but, as I understand, only for now. Of course, they see the participation of the private sector in the program.
Obviously, this will happen later, when it will become clear to what extent the city is ready to collaborate with developers.
I am sure that the private sector will be involved after all. Of course, the city constructs everything great, it can do that. But in any case a usage of developers’ competence will be needed on every stage of the program realisation, especially in sales. It is important to understand that the city can construct, create, but the city has never sold anything to physical bodies, it just doesn’t have this experience and this competence. And it doesn’t need to, of course. We are here for it.
To conclude, let’s talk about pricing. According to Moskomstroyinvest, prices on the primary housing market in Moscow are decreasing steadily: the decrease is about 10-15%. Has prices fallen in your project?
We don’t feel this tendency. I wouldn’t say that prices are growing, but neither would I say that they are falling. The question is - how to count? There might be projects that face certain difficulties right now. Developers of such projects give big discounts. Taking it into consideration, the price has probably decreased. But on average on the market.
Apartments prices in live projects which are being realised and developed actively, do not decrease. But I’ll say it again, it is not growing either. It grows inside the project just because its readiness is growing from start to the peak. But the peak price is not increasing, I think. And not decreasing.
I don’t exclude the possibility that all today’s legislation initiatives might force developers to elevate prices.
We, by the matter of fact, are not for it. Because the prices will grow, and buying ability of the population might not grow fast enough. Which will lead to decreasing the amounts. If all these innovations will be expensive for a developer, he won’t be able to pay everything from his income and will be forced to partly switch expenses to the buyer.
In our project «Kvartaly 21/19» the price from the start of realisation has grown by 10-12% for sure. But this is, again, because the readiness of the project increases.
11 January 2018
Scheduled prices rise for apartments in the residential complex «Kvartaly 21/19»
«VectorStroyFinance» company, developer of a mass-scale project «Kvartaly 21/19» in Ryazanskiy district of Moscow, informs about the upcoming rise of prices in its project.
On the 22nd of January 2017 a scheduled rise in apartment prices in the residential complex «Kvartaly 21/19» that is being constructed in Ryazanskiy district of Moscow, will happen. Apartments price review is scheduled in all buildings of the complex on construction stage, which is driven by a rise of construction readiness of the objects and by high demand for housing in the project from customers’ side.
The construction of buildings of second line (buildings №6, 8, 9) is close to finish. The assembling of elevator equipment is lead in the buildings. Glaxing of the gallery is lead in buildings №6 and 8, and in building №9 it is already over.
Buildings of the third line are now on the stage of active construction - ground excavation is taking place. Land works are 40% ready, concrete works have been started, waterproofing and filling of protective cap is being lead. For today, 700 cubical meters of fundamental plate is filled. The first tower crane is placed on the construction plot of the third line. Reinforcing of vertical construction works are being lead in the underground part of third line buildings. The end of works at underground part of all buildings of the third lined and entrance access and start with stylobate is planned for the end of March. We remind that a well known on the market holding Svargo acts as a general contractor of the third line.
The demand for apartments in our projects remains stable, a decent customer activity was witnessed even during New Year holidays, which can be explained by an optimal proportion of price and housing quality. Despite the scheduled prices rise, the residential complex «Kvartaly 21/19» still remains one of the most advantageous offers on Moscow city real estate market and is included in this list of the most affordable new buildings of Moscow», - comments Andrey Kolochinskiy, managing partner of «VectorStroyFinance».
For the start of January the minimal price for an apartment in the buildings on construction stage of the residential complex «Kvartaly 21/19» is 4 million rubles. The price in ready buildings starts from 6 million rubles. Offers range include finished apartments with furniture and domestic appliances. During January there are special discounts and offers for a apartment purchase. Traditionally, «VectorStroyFinance» offers extra discount for a quick decision making about the purchase, or in case of several apartments purchase.
10 January 2018
«VectorStroyFinance» launched a TV advertisement
In the beginning of January «VectorStroyFinance» launched its first TV advertising campaign on federal channels. The creative concept of the video for the residential complex «Kvartaly 21/19» was developed by Asap Production company.
Moscow-based developer «VectorStroyFinance» launched the first TV advertising campaign of its residential complex «Kvartaly 21/19» on six channels - NTV, TNT, Moskva-24, Podmoskovie 360, Match TV, Moskva Doverie. Asap Production studio, whose works received various festivals awards multiple times, was responsible for the creative concept of the video.
The studio had a task of developing a video, positioning the residential complex «Kvartaly 21/19» as the most stylish residential complex in Moscow. The creative team visualised the slogan of the residential complex «Style in every detail» and practically brought the elements of «Kvartaly 21/19»’s style to life. Perfectly chosen interior, nice musical background in combination with unusual logo, that brings out the uniqueness of the brand - all these details together reflect the project’s philosophy.
«Before the beginning of this year, TV remained a yet untouched channel for us. We decided to try this resource in order to increase the level of awareness about the residential complex’ brand. According to our order a short, but memorable video was created, which allows to receive a wide coverage in comparison with longer ones in terms of the same budget. In the residential complex «Kvartaly 21/19» we prove daily that affordable housing does not only have to be comfortable, but it can also look aesthetically. Since the moment of planning this project we chose this vector of development and today, with help of famous architects, artists and designers we implement out ideas - we build contemporary houses with modern architecture, we decorate the territory with unique art objects, we elaborate stylish designs of public places and apartments’ interiors», - comments Andrey Kolochinskiy, managing partner of «VectorStroyFinance».
22 December 2017
Start of parking lots sales in the residential complex «Kvartaly 21/19»
«VectorStroyFinance» company announces the start of parking lots sales in the first multi-level parking on the territory of the residential complex «Kvartaly 21/19». The minimal price for a parking lot start from 408,000 rubles.
Sales of parking space on in in the first multi-level parking on the territory of the residential complex «Kvartaly 21/19» have started. The parking in located in the immediate proximity from the buildings of the first line and includes 7 levels, planned for 236 car places. The area of each lot is 13,25 square meters, the minimal price for a parking lot is 408,000 rubles. For the convenience of car owners the parking will be equipped with two elevators. The entrance to the parking territory is equipped with an automatic barriers and access control system. The fire alarm system and 24/7 security will provide the owners with full safety of their personal transport. In the terms of parking construction a beautification of an adjacent territory will be carried out, with construction of passages, sidewalks and greening. The object will be commissioned in November 2018.
It is possible to buy a parking lot using the Loko-Bank credit program. According to the program’s conditions a credit is issued for a term up to 7 years with 12,4% annual rate in rubles, with none initial payments.
Let us remind that for the convenience of residents of the first and the second line a temporary flat parking is organized on the territory of the residential complex. In future on the place of the parking a second multi-level ground parking for 820 car places will appear.
«Today parkings are a necessary infrastructural element of any contemporary residential complex. In this regard the residential complex «Kvartaly 21/19» is not an exclusion. The interest from customers side to these projects has risen since the start of the year, when car lots became full-value real estate objects and their liquidity has risen too. There are no problems with their registration as a property, sale, donation or transfer as inheritance, - comments Andrey Kolochiksiy, managing partner of «VectorStroyFinance».