Page 93 - RusRPTNov18

presence are in line with recent announcement that Aeroflot will order 100 medium-distance Russian Sukhoi Super Jets , well suited for domestic regional flights.
Russian government will grant RUB10bn ($150mn) to the State Transport Leasing Company (GTLK) to acquire eight domestic Sukhoi Superjet 100 (SSJ-100) for regional passenger air transportation, Vedomosti daily said on October 4. The total cost of the jets is estimated at RUB18.7bn. This makes another contract for Sukhoi, after the Russian national air carrier Aeroflot said it will place a new order for 100 Sukhoi Super Jet short-distance aircrafts in September with about 87-seat capacity. SSJ-100, produced by Sukhoi Civil Aircraft, had been struggling to compete with Boeing and Airbus equivalents. In 2014, the company delivered just 37 civilian airliners, compared to 124 military aircraft, but has been supported by the state since 2015 . In March, Russia's President Vladimir Putin has thrown his weight behind a RUB85bn ($1.5bn) investment into a new version of SSJ100. In February Russian privately owned airline S7 put in an order for 100 SSJ100 Russian-made “super jets”. In April, two Iranian airlines signed a memorandum of understanding with Sukhoi for the delivery of an initial 40 SSJ100.
9.1.4 Construction & Real estate sector news
The Ministry of Construction has released 9mo18 completions, with the print of 39.2mn sqm implying a flattish performance y/y . Industrial volumes lost 17.6% y/y to 19.2mn sqm, while the area launched by individual companies increased 22.1% y/y to 20mn sqm. In Moscow, consolidated volumes surged 28% y/y to 1.8mn sqm. Reported completions for industrial companies reflect the residential sales of projects offered to clients in 2015-16. Back then, the demand side was pressured by declining real incomes and the high interest rate environment. As housing sales have recovered over the last two years, we anticipate industrial volumes following the same path in the medium term. Individual housing reflects a one-off this year related to the potential expiry of the exemption programme to register countryside estates. This was supposed to end on 1 March 2018, but was subsequently prolonged to 2020. Moscow outperformed because clients there are more resilient to economic downturns, plus the market offer changes rapidly, with a greater focus on economy class housing and lower prices. For 2018, the ministry estimates completions reaching 82-84mn sqm, seeing a recovery of some 5% y/y. In the medium term, we see volumes supported by the recently impressive sales, as clients saw local lows in mortgages rates and were concerned about macroeconomic volatility as well as the impact of changing sector regulations. We have yet to see the full impact of the latter on residential supply and completions in the longer term, with the sector on the edge of significant consolidation.
9.1.5 Retail sector news
In the first half of September the produce of Russian wineries accounted for over half the domestic wine sales with a 52% market share, up from 43% a year ago, RBC business portal said on September 26 citing the Takskom researcher. As reported by bne IntelliNews, Russia produces competitive wines , and the government is intending to promote its viniculture following countries like Georgia into the international markets. On the domestic market, the appeal of Russian wine in September increased as the price per
93 RUSSIA Country Report November 2018 www.intellinews.com