Renova StroyGroup 6.9 billion rubles

Benefits of the government order: opportunity to continue the largest announced project which faced challenges due to the crisis.

Early this year the construction companies of the Renova Holding owned by Mr. Viktor Vekselberg (in the picture) won a number of bids to sell housing to the Ministry of Defense in Yekaterinburg, Yaroslavl and the Moscow Area. Prior to the crisis Renova StroyGroup announced construction of several large districts in Chelyabinsk, Perm and Yekaterinburg (Akademia City). Akademia City was expected to have 9 million sq.m. of housing and 4.2 million sq.m of commercial real estate built by 2025, with total investments estimated at $30 billion. Apartments were supposed to be bought by Yekaterinburg residents as well as people from other cities buying apartments for their children who come to Yekaterinburg for quality medical education.

The plan did not work. According to Mr. Veniamin Golubitsky, President of Renova StroyGroup, there was almost no demand for housing during the crisis. “The Ministry of Defense was the perfect partner for Akademia City as a lot of people moved in providing for its functioning. It revived demand for stores, parking lots and service infrastructure. It usually takes around two years. We achieved that in a much shorter period”.
The apartment sale prices for servicemen do not exceed 33, 600 rubles per sq.m. In the free market the price per squarer meter is around 50, 000 rubles. Renova’s margin, according to the company’s estimates, is 5-8%.



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