Regional developers increase volumes
Participants in the Russian construction market, which recently celebrated Builder's Day, are looking to the future with optimism. Over the past 12 months, the number of regional companies registered outside of Moscow and St. Petersburg has grown by 12.5%, to 2.5 thousand, the Key Capital Analytical Center reported based on the results of a study. The most ambitious players have decided to expand into the highly competitive Moscow macroregion. Capital developers, in turn, have become more active in exploring new markets outside the Moscow Ring Road. What trends are gaining momentum in the national construction market?
Photo: Daria Atamanchuk
In June 2024, the total area of housing under construction, according to the Unified Information System of Housing Construction, amounted to 115 million sq. m. Over the first half of the year, the indicator increased by 8%, and compared to the same period in 2023 — by 13%. Excluding capital agglomerations, in June 2024, regional developers built more than 76.8 million sq. m of housing compared to 69.7 million sq. m in January 2024. Thus, over the half-year, the volume of current construction in the regions increased by 10%.
The most noticeable increase in the indicator for the first half of the year was recorded in the Far Eastern Federal District — by 18%, followed by the North Caucasian Federal District (growth by 17%), the Ural Federal District (+ 16%), the Northwestern Federal District (+ 14%) and the Southern Federal District (+ 10%). The most modest indicators were recorded in the Siberian Federal District (+ 4%). In annual terms, the North Caucasian Federal District became the clear leader in terms of current construction volumes, where the indicator grew by 51% compared to June 2023.
“Analysis of the activity of regional developers shows that the scale of their activities has been expanding over the past 12 months,” said Olga Guseva, CEO of Key Capital. According to her, developers continue to actively borrow money for new construction, expecting further growth in demand. According to the Central Bank, by the beginning of June 2024, 10.7 thousand agreements between developers and banks on project financing were in effect in the Russian Federation. As of January 1, 2024, there were only 9.4 thousand of them.
The number of houses provided for by construction permits is increasing. According to the Unified State Register of Housing and Utilities, in the first half of 2024, permits were issued in the country for the construction of more than 3 thousand multi-apartment residential buildings, which is 4.4% less than in the same period in 2023, when developers were allowed to build 3.2 thousand buildings. Without taking into account the capital agglomerations, in the first half of the year, regional developers received permits for the construction of 2.7 thousand houses, compared to 2.9 thousand in the same period in 2023.
“Many local developers are especially counting on family mortgages, which will be popular in the North Caucasian republics with high birth rates, and Far Eastern mortgages,” Guseva noted.” According to her, the share of large projects has increased: over the past year, the number of requests from developers for the development of projects on large sites (from 60 hectares) has increased by at least 40%. In addition, requests for the development of projects for areas larger than 100 hectares have appeared, their share amounted to at least 30% of requests. All this suggests that developers have begun to introduce large projects and KRT.
Guseva noted another interesting trend — a gradual increase in the scale and density of development of residential areas in the regions. Therefore, developers will inevitably have to think about the multifunctionality of the space they create in cities for a large number of people: jobs should appear next to residential buildings.