Page 114 - RusRPTMay19

board Alexander Ponomarenko told Reuters in an interview. As reported by bne IntelliNews, Sheremetyevo airport climbed into the top 10 busiest airports in Europe in 2018 on the back of the World Cup traffic. Ponomarenko claims that the shareholders hold a call option on 30.5% stake in the largest airport in Russia held by the state property agency RosImushestvo. Should a buyer for the shares be found, the option could be exercised by the shareholders. Ponomarenko did not elaborate on possible buyers, noting that it could be a strategic or financial investor, preferably foreign. A 10% in the airport is valued at about $400mn-500mn. TPS Avia controls the largest stake in the airport of 66%. The Cyprus-registered holding in turn is owned by families of Ponomarenko and Alexander Skorobogatko (65.25%) and Kremlin insider and friend of Vladimir Putin Arkady Rotenberg (34.78%).
9.2.4 Construction & Real estate corporate news
Owner of LSR Molchanov sells 9.7% via accelerated book building. LSR is our top pick in RE – we see RUB580/s as attractive. However, as uncertainty is high ahead of regulation changes, placement may give mixed messages to investors. Possible inclusion in FTSE Russia may provide S-T support. Solneau Ltd, owned by Molchanov, sells 10.0mn shares at RUB580/s – Bloomberg. The key reason for the placement is improvement of liquidity, according to the company. Following the placement, the company expects the stock to be included in FTSE Russia Index, hence the investor base will broaden notably. LSR is our top pick in the Russian Real estate universe – RUB580RUB/s looks attractive. However, as uncertainty is quite high ahead of regulation changes, the placement itself could be seen as a contradictory message to investors at least, if not negative. We expect more clarity about sector regulation to be announced in April. For now, we foresee no negative implications on 2019 financials for LSR.
Leading Russian real estate developer LSR Group (LSR) has released a robust 1Q19 trading update, with volumes unchanged y/y, and a 20% y/y advance in pricing due to the increasing share of Moscow projects in the sales mix, the company said on April 15. Russia’s real estate sector is starting to show signs of life again despite stagnant real income growth. The inhabitant of the thirteen big cities with over onemn population have been less affected by the slow down and Moscow accounted for 31% of total sales in the first quarter versus 19% a year earlier, the company said. “The key driver was the almost doubling of sales in the ZILART project (27,000sqm in 1Q19) on the pickup in the market offer from a low base. Organically, prices added 6-10% y/y across geographies (vs. 10% on the Moscow and the St. Petersburg primary markets), while the Moscow division raised prices 15% y/y, also due to the ZILART volume recovery (RUB208,000 per sqm; up 9% y/y),” VTB Capital (VTBC) said in a note. The reported figures highlight strong residential demand, says VTBC, but were less impressive than those of market leader and investor darling, PIK, which also saw flat y/y volumes from 2.7x larger base and a 15-20% y/y organic price advance.
One of Russia's leading real estate developers Etalon reported 2% growth in revenues in 2018 to RUB77.7bn ($1.2bn), while seeing gross profit decline by 19% y/y to RUB14.5bn at a margin of 20%. The miss on bottom line and declining margin was attributed by BCS Global Markets to a number of one-off factors, such as recognition of a significant part of the overall costs (utilities, infrastructure costs) in 2 large projects Galactica and Silver Fountain. The two projects, along with revenue discounting for parking
114 RUSSIA Country Report May 2019 www.intellinews.com