What it costs them: bankruptcies of real estate developers have begun in Russia's regions

Bankruptcies of real estate developers have started in Russia's regions. For example, in Yekaterinburg, the former general contractor of PIK Group, Stroyproekt Group, is on the verge of bankruptcy; in Rostov-on-Don, SC Donstroy, which was unable to repay its debt to Sber, has been declared bankrupt. Similar cases are recorded in a number of other regions. Representatives of business recognize the problem, but believe that it is too early to consider bankruptcy as a trend of this year. Experts believe that the subjects with the most unsold housing may face difficulties.

Why developers go bankrupt

Since the beginning of the year, a number of construction companies in Russian regions have become bankrupt or are on the verge of such a procedure, Izvestia has found out, having familiarized itself with the decisions of the Unified Federal Register of Information on Bankruptcies and with the data of regional supervisory authorities. Thus, in Rostov-on-Don SC Donstroy was declared bankrupt because of debts to Sberbank. The company was unable to pay interest on a loan for 11 million rubles. As a result, on February 13, bankruptcy proceedings were instituted against it.

On February 11, also in the same region, the construction company LLC "STEK", which was engaged in the construction of residential and non-residential buildings,was declared bankrupt. It failed to return 39 million rubles to creditors.

Also in February, it became known that Stroyproekt Group, a developer previously considered close to the PIK group, was on the verge of bankruptcy in Ekaterinburg. The company may derail the project of complex development of the territory with investments of at least 850 million rubles. So far, it has acted as a partner of the federal group, but PIK itself told Izvestia that it has not cooperated with it for more than half a year.

- The company Stroyproekt Group was not affiliated and was not part of PIK's structure. The developer takes a careful approach to the selection of contractors, which helps to ensure stability and sustainability of work on projects at all sites, both in Ekaterinburg and in other regions of presence," explained the PIK press service.

In Chuvashia, on January 22, "Regionstroy" was declared bankrupt, which failed to repay a debt of 42.6 million rubles to the mortgage corporation of the republic, for which it was carrying out multi-storey construction. And in Vladimir region on January 25, the court declared bankrupt the housing estate "Generation", which failed to deliver an 18-storey building, leaving almost 600 shareholders without apartments.

"Izvestia" sent inquiries to the above companies, as well as to the largest Russian real estate developers. The editorial board also asked the Ministry of Construction to comment on the bankruptcy situation.

In January this year, Deputy Head of Construction and Housing Nikita Stasishin said on the sidelines of the All-Russian Municipal Forum "Small Motherland - the Power of Russia" that together with the heads of regions the Ministry of Construction is working to prevent any bankruptcy of developers. According to him, the heads of municipalities should control the timing of housing construction so that citizens receive apartments on time.

About bankruptcies among developers this year earlier warned in Dom.RF, which pointed to the high volume of unsold housing. As told "Izvestia" in the organization referring to the assessment of the Analytical Center Dom.RF, mass bankruptcies of developers in the market will not be. But some inefficient companies, which used not fully thought-out financial and economic model, may face difficulties.

They also noted that the state of the market can be judged by the key indicator - the ratio of supply and demand. The objects with commissioning this year are already sold out more than half, and next year by more than a quarter. Indicators are growing every month and characterize the market situation in Russia as a whole as balanced, explained in Dom.RF.

At the same time, they noted that in the regional context the sales levels differ. Thus, for example, in Nizhny Novgorod the indicator of sold-out objects with commissioning this year is 75%, in Moscow - 70%, in Omsk - 66%. This indicator for new buildings with commissioning this year is lower than the national average in such cities as Rostov-on-Don (41%), Voronezh (40%), Krasnodar (38%).

This year will be critical for the construction industry, as sales of apartments due to the abolition of preferential mortgages have fallen seriously, and loans are expensive, Svetlana Razvorotneva, deputy chairman of the State Duma Committee on Construction and Housing and Utilities, explained to Izvestia the emergence of bankruptcies in the regions.

- Real estate developers in the regions were already operating on the edge of profitability. The margins of their projects barely exceeded 15%, so they hardly received bank financing. All this affects the situation, especially in those subjects where housing was built on credit," she explained.

At the same time Svetlana Razvorotneva admits that developers may deliberately create bankruptcy situations when they have sold apartments and thus avoid claims of buyers and fines. Therefore, it is better not to draw conclusions on the first cases and observe the situation, the deputy believes.

What measures can help the construction market

Representatives of the real estate market do not deny the existence of problems, but believe that it is premature to draw conclusions about whether bankruptcy will become a trend this year.

- Indeed, after the abolition of most subsidized mortgage programs, it was regional developers and projects that came under the most pressure. Two main factors led to this situation. Firstly, the lack of mortgage loans, due to which there is a significant drop in demand: in some subjects of the federation the activity of buyers has halved, and somewhere up to 70-80%. The second reason - regional projects are much less marginal than, say, in Moscow or St. Petersburg, - said "Izvestia" general director and managing partner of "Intermark Urban Real Estate" Dmitry Khalin.

According to him, at the current values of the key rate, the situation with bankruptcies will continue, especially when it comes to the regions where demand has been supported by favorable mortgages in recent years. At the same time, he emphasized that, as a rule, not the largest regional developers go bankrupt.

Ruslan Syrtsov, Managing Director of Metrium, told Izvestia that individual episodes of bankruptcy of developers this year have not yet become a trend.

- In any case, there is no data to suggest otherwise. Now in the Russian Federation, according to the Unified Resource of Developers, about 2.8 thousand developers are implementing their projects, and compared to February 2024, this figure has not changed. The number of companies with a rating below three (the rating is based on the timeliness of fulfillment of obligations) has decreased only by 4%, - said the representative of the business.

According to him, bankruptcies of legal entities-developers happen all the time, but, as a rule, these are small companies, and it does not affect the overall picture. At the same time, he believes that the government needs to reduce the burden of the growing cost of project realization for developers. Since the mortgage instrument can hardly be used to support the market in the coming years, it is necessary to consider other possibilities of financing construction, including direct state orders for the construction of social or rental housing, says the industry representative.

According to Dmitry Golev, Commercial Director of Optima Development, there are over 4.5 thousand developers in Russia now, including about 2.6 thousand developers of multi-family housing, and bankruptcy affects only a few companies, and not large-scale ones at that.

- It was obvious that if the authorities do not introduce a moratorium on bankruptcy of developers, such precedents will not be avoided. Still, the conditions in the financial sector are not easy, so errors in calculating own credit potential are not excluded. However, they are isolated," says the developer.

In his opinion, the majority of developers have accumulated a significant margin of safety, and sales have not dropped critically, and in the most liquid projects have even increased.

- First of all, we expect the authorities to start lowering the key rate, which will immediately lead to a revival in the industry. In addition, we would like to avoid excessive restrictive measures, for example, attempts to ban installment payments, which today are very helpful to both developers and clients," he told Izvestia.

Irina Dobrohotova, the founder of bnMAP.pro, a service for analyzing the market of new buildings, noted that the share of unsold residuals of built housing and the rate of their realization in each specific region are important for understanding the situation in the industry.

- It is the rate of realization that allows us to understand how quickly the developers of a particular location will be able to sell off the project residues. Taking into account the average monthly sales rate for 2024, according to our data, the fastest time to sell out the projected volume of new buildings in St. Petersburg will be 1.7 years, Moscow - 2.1 years and Nizhny Novgorod - 2.5 years. The maximum terms of realization of residual volumes of new buildings, taking into account the average monthly sales rates for 2024 - in Krasnodar and Krasnoyarsk (4.9 years), Novosibirsk (4.8 years), - she explained to "Izvestia".

At the same time, according to bnMAP.pro, for 2024 in the majority of million-strong cities unsold residuals are more than 60%. Thus, in Chelyabinsk - 67.8%, Krasnoyarsk - 67.4%, Krasnodar - 67.3%, Kazan - 66.2%, Rostov-on-Don and Volgograd - 65.4% each, Ufa - 67.3% Voronezh - 63.4%, Novosibirsk - 63.%, Perm and Samara - 62.3% each, Nizhny Novgorod - 60.4%, Yekaterinburg - 60.1%

According to Irina Dobrokhotova, developers could be helped, among other things, by subsidizing the project financing rate for projects that were launched last year and this year and have not had time to accumulate a share of sold-out residuals.