Page 93 - RusRPTSept19

11.7%. In the period, passenger turnover increased to 180bn RPKs, up by 13.6% year-on-year.
Russian United Aircraft Corporation (OAK or UAC) will sell the MS-21 Russian medium-range jet 20% cheaper than the competing airplanes Boeing 737 and Airbus A320, Reuters reported on September 2 citing the representative of the company. Currently OAK has orders for 175 jets on its books, out of which 50 are from the Russian national air carrier Aeroflot, 10 from Kazakh Bek Air, and 5 from the Yakutia airline. Another 35 jets are expected to be ordered by Aeroflot by 2020. OAK estimates that the demand for MS-21 type of jets will be 1,000 in Russia and 30,000 globally by 2038. Previously the Audit Chamber revealed that the cost of MS-21 had skyrocketed from RUB125bn in 2008 to RUB438bn in 2019. Irkut Corporation, one of the subsidiaries that make up OAK, together with Sukhoi Civil Aircraft, has accumulated a deficit of RUB197bn. As reported by bne IntelliNews in February, OAK was not in a good shape and needed RUB240bn-250bn of additional funds. In the meantime, the production of the newly created MC-21 medium-range aircraft has been postponed to late 2020 now that the US has stopped supplies of composite materials for the wings. Reportedly Russian the state technology agency Rostec had requested RUB300bn ($5bn) in capital injections for OAK from the Kremlin, to cover past losses and to invest in the production of MS-21 after an attempt to bring private investors on board failed.
9.1.4 Construction & Real estate sector news
Real estate primary deals in Moscow down 11% y/y in July, front loaded 2019 demand. According to Kommersant, the number of primary deals in Moscow declined 11% y/y in July. New Moscow had the greatest share, with 38% of the total, increasing 3.4pp y/y. In 1H19, the residential demand in Moscow produced a positive surprise, increasing 37% y/y to 46,546 share participation agreements (DDUs). The volumes were supported by clients looking for flats prior to the introduction of escrow accounts from 1 July and uncertainties associated with prices and supply thereafter. Artificially, volumes were also lifted by developers conducting nominal sales to related parties in order for properties to pass the exemption threshold (10% of sales to be realised), in line with the previous regulation, after 1 July. We do not see any particular weakness in the July numbers, noting the volatile nature of residential demand and regulatory factors of late. However, the strength in recent quarters does not reflect a recovery in household budgets and we see housing demand cooling in the short term.
Study ranks Moscow third in world rating of rising prices for luxury housing. Moscow took third place in the rate of price increases for luxury housing, according to the Knight Frank international consulting company, the company’s press service said on August 15. Moscow ranks 13th among world’s costliest prime real estate "Moscow, with an annual growth of 9.5% as of June, took third place in the world ranking of changes in average prices for luxury real estate among the 46 countries of the Prime Global Cities Index (PGCI), losing only to Berlin (+ 12.7%) and Frankfurt (+ 12%)," the report reads. At the same time, compared with Q1 of 2019, the dynamics of growth in prices for elite housing in the Russian capital decreased by 2.5%. At the end of June, the weighted average bid price of new buildings of the high-budget segment amounted to 830,000 rubles ($12,542) per square meter, the company stated. In general, in the 46 world cities mentioned in the ranking, the average annual price increase, as of June, amounted to 1.4%. This figure was
93 RUSSIA Country Report September 2019 www.intellinews.com