Page 112 - RusRPTFeb21

take-off and landing operations. The new Istanbul airport, which opened in April 2019, served 23.4 million passengers.
9.1.4 ​Construction & Real estate sector news
Moscow developers increased residential sales 22% y/y in 2020 to a record high RUB1.3 trillion. Residential prices gained 21% y/y to RUB236,000 per sqm by YE20, according to CIAN.
Last year brought significant challenges and volatility for residential developers, but that ultimately resulted in strong operational figures. Volumes were lifted by the subsidised mortgage programme (with a record low rate of 6.5%), fluctuations in the local currency, and overall economic uncertainty. The acceleration in demand meant that prices added 21% y/y. The subsidised mortgages programme has been prolonged to 1H21, but the other support factors have largely faded and this year residential volumes are to see a high comparison base.
In our coverage universe, PIK has the largest exposure to the Moscow market, which accounts for 47% of our sales forecast for 2020F, with the Moscow region holding a comparable share (40%). The company is due to publish its 4Q20 operating results on 20 January; we anticipate an 11% y/y volume expansion and 2020 setting a new record (2.2mn sqm), with residential RUBsales expanding 30% y/y and 27% y/y in 4Q20F and 2020F, respectively, to RUB96bn and RUB305bn, according to our forecast.
9.1.5​ Retail sector news
According to Fashion Consulting Group, the fashion market in Russia lost 25% y/y to RUB1.7 trillion in 2020. ​The agency factors in a recovery by 2023 in its upbeat scenario, and by 2025 in its bear case. Last year, the fashion sector experienced multiple operational challenges from store shutdowns, lower demand associated with work-from-home patterns, and the overall pressure on household budgets. During lockdown, e-commerce is vital and it grew 11% y/y last year to RUB245bn, accounting for 14% of the total, according to Fashion Consulting Group, which sees the segment adding an additional 37% y/y in 2021. In our coverage universe, Obuv Rossii’s sales were down 20% y/y in 11m20. The company aggressively developed its marketplace for various goods, which accounted for 31% of retail sales in November. We maintain our cautious view on the name, as sales remained pressured and have been volatile lately, while working capital is still elevated (157% of sales as of YE20F, in our model). In the near term, there are uncertainties about how sustainable the rebound of sales can be, while in the longer term we note sizable opportunities for a pick-up in turnover, net working capital optimisation, and deleveraging from 5.5x net debt / EBITDA as of YE20F, as per our
112 ​RUSSIA Country Report​ February 2021 www.intellinews.com