Page 77 - RUSRptAug18

Warehouse space completions in the Moscow region amounted to 0.148mn square metres (sqm) in the second quarter of 2018 as compared to 0.142mn for the same period of last year, according to a July 23 report by JLL. Driven by the storage needs of e-commerce companies , the warehouse segment has been growing faster than the market and attracting investment . Three out of the four largest warehouse projects that were slated for construction in 2017 are for e-commerce companies. In January-June 2018 overall warehouse completions totalled 0.216mn sqm "which is only 16% of the volume announced for delivery in 2018, while up by 8% y/y," JLL said. The report noted that about 56% of first-quarter completions were contracted before commissioning, a rather high share (in 2017 this figure was only 33%). The main demand drivers for warehouse space were retailers and manufacturers, accounting for 45% and 24% of all deals respectively in January-June. Total supply of warehouses in Russia in 2017 stood at 28mn sqm, out of which 60% was in Moscow.
Completions of residential housing projects in Russia increased by 3.8% year-on-year to 29mn square metres (sqm), according to data from Rosstat statistics agency. Notably, while volumes launched into the market by individuals added 12% y/y to 15.3mn sqm, industrial housing lost 17% y/y to 13.7mn sqm. "Consolidated completions saw a modest recovery, while individual housing outperformed the industrial segment for the first time in post-Soviet history," VTB Capital commented on July 24. The bank links the unimpressive trends from industrials to pressured residential sales in 2015-16 against a backdrop of elevated interest rates and depressed real incomes. VTB also reminds that the first half of the year is seasonally slow, with most residential volumes being commissioned for the state mostly coming in the second half of the year.
Troubled Russian transportation major Summa Group found a buyers for its only real estate development asset , selling the Beskudnikovo housing and commercial property project to Seven Suns Development company from St Petersburg, Vedomosti daily reported citing unnamed sources on July 30. Industry observers estimated the value of the project at about RUB2bn ($32mn). Summa Group is a large investor in transportation assets that include the Novorossiysk Commercial Sea Port (NSCP), Fesco ports and Transcontainer, as well as construction, oil and gas, agriculture, and telecom assets. Since March the head of Summa, Kremlin-connected oligarch Ziyavudin Magomedov , and his brother and ex-senator of North Caucasus Republic of Dagestan Magomed Magomedov have been in jail, disturbing the operations of some assets and prompting talk of sales re-distribution of large and lucrative transportation assets.
One of the leading Russian real estate developers, Etalon Group , will sell a stake owned by its founder Vyacheslav Zarenkov to the top management . No other details have been disclosed currently. Etalon recently posted strong second-quarter results , along with other market leaders . Etalon's management currently owns a 2.6% stake while 61% is in free float and the remaining 36.4% is owned by Baring Vostok Funds (5.7%) and by Zarenkov and his family (30.7%).
77 RUSSIA Country Report August 2018 www.intellinews.com