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increase by raising airfares.
The volume of freight traffic at Sheremetyevo International Airport exceeded pre-pandemic figures. In the 1st quarter of 2021, Sheremetyevo handled over 80 thousand tons of cargo and about 8.5 thousand tons of mail, confirming its status as the largest cargo hub in Russia and a leader among Moscow airports with a 68.7% share of the UIA cargo and postal air transportation market. The total cargo turnover of Sheremetyevo for the 1st quarter of 2021 increased by 4.5% compared to the same period in 2020, which is especially noteworthy against the background of a significant reduction in carrying capacities associated with international restrictions on passenger air traffic, which were introduced at the end of March and early April 2020. Cargo transportation on domestic airlines (IDL), which returned to pre-pandemic levels in the second half of 2020, continues to demonstrate positive dynamics.
9.1.4 Construction & Real estate sector news
In 1Q21, the area under construction of residential real estate corrected 13% y/y to 100mn sqm, the sixth consecutive quarter of contraction in Russia, as smaller and medium sized players are unable to adjust their operations to the escrow legislation requirements and lack access to the funding.
Thus, the sector consolidation continues, with the share of the ten largest companies increasing 1.5pp y/y to 19%. The implementation of escrow accounts is picking up, and 57% of the total portfolio (+27pp over the last 12 months) is being realised under this scheme as of March 2021, Dom.RF figures indicate. According to the United Registry of Homebuilders, 1,978 homebuilders in Russia have portfolios of less than 100k sqm and account for 40% of the area under construction, which could trigger a further narrowing of the sector.
In 1Q21, residential completions increased 15% y/y to 17.8mn sqm, reflecting a pick-up in the construction pipeline in 2H20. The total amount of construction permits issued during the quarter reached 871 (+15% y/y) for a capacity of 7.2mn sqm vs. 4.7mn sqm as of 1Q20, as the overall project size has increased. 2Q21 is to have a low comparison base, as last year construction sites were frozen from early April to mid-May in a number of regions, including the core Moscow Metropolitan Area (MMA). It represented 30% of country completions in 1Q21 and 52- 100% of sales for listed developers, while its higher prices (a more than twofold premium to Russia) brought favourable construction economics to local operators.
The Ministry of Construction has said that its target for 2021 residential completions is 85mn sqm.
In 2020, residential completions remained flat y/y at 82.2mn sqm, implying a robust performance, as the sector saw COVID-19-related limitations and construction activities were partially frozen in the core regions. The announced target implies a 3.4% y/y uplift and matches
127 RUSSIA Country Report June 2021 www.intellinews.com