Page 99 - RUSRptApr17

Apatity will be under reconstruction from 2017 to 2020, to be adapted for handling a rising flow of passengers and cargo in the central and southern parts of the Murmansk region, as well as tourists going to the Khibiny ski resort. The project will include overhauling the terminal and of the port’s infrastructures, and the international terminal, engineering facilities, and upgrading machines and equipment. The reconstruction bill for the international airport in the regional capital Murmansk will be footed by the federal budget and private investors. The projects came as part of the Russian government’s effort to speed up the development of the country’s Arctic regions , which are rich for mineral resources but lack a necessary infrastructure for proper economic development.
9.1.4 Construction & Real estate sector news
Russian residential real estate completions down 16% YoY in 1Q17 with Moscow as the laggard. In 2017 volumes set for limited correction. According to Rosstat, residential completions in Russia corrected 16% YoY to 13mn sqm in 1Q17. In Moscow, the correction was 59% YoY, to 0.32mn sqm, while Moscow Region saw a reduction of 9% YoY to 1.17mn sqm. In Russia, consolidated volumes continued with the decline trend after the 7% YoY downward correction to 80mn sqm in 2016. The negative dynamics reflect pressure on residential demand in 2015 that saw spikes in pre-sales in 4Q14, a high interest rate environment and the low availability of mortgages at the beginning of the year. The Ministry of Construction expects 2017 completions at 75-80mn sqm, implying a recovery in 2H17 on the back of robust 2016 pre-sales. Moscow was primarily pressured by low volumes on the recently affiliated territories, while the decline within the old City stood at 35% YoY. We highlight the seasonally low nature of the first quarter and await the trends in the remaining three quarters (particularly the fourth) for greater clarity. In the Moscow Region, completions corrected 9% YoY in 1Q17 to 1.17mn sqm. In our coverage universe, we highlight the healthier supply-demand balance in Moscow and St Petersburg, while in the Moscow and Leningrad Regions, oversupply is weighing on the market fundamentals.
Russia’s real estate investments fell by a fifth (18%) in the first quarter of this year compared with the same period a year earlier to reach $830m, according to a report by Jones Lang LaSalle (JJL). But the market maybe about to turn as despite the decline, investment activity is improving, with a higher number of deals and a more even breakdown across sectors and regions, the real estate consultant and broker added.
99 RUSSIA Country Report April 2017 www.intellinews.com