PIK Group is one of the leading residential real estate developers in Russia, with a particular strategic focus on the Moscow Metropolitan Area. Its principal activity is the development, construction and sale of mass-market residential properties in the Russian real estate market. Here Artem Eyramdzhants, First Vice President of PIK Group, talks about the company’s strategy and projects.
Tell us something about yourself and about the Group.
I am the First Vice President of the PIK Group and I studied Banking and Economics at Moscow Financial Institute. I spent several years in banking and then I was transferred to PIK to structure the holding company. Currently I am responsible for investor relations and part of operational activities.
PIK Group is a leading Russian mass housing developer, founded 18 years ago. We focus on Moscow and the Moscow region, which is 88.5% by value of our total land bank. Our regional developments are located in the Russian cities, basically in the central and southwestern Russia. In Moscow and the Moscow region we enjoy the competitive advantage of having our own pre-fabricated facilities, which enable us to build huge amounts of buildings at affordable prices for the customers.
What we are doing is complex development of affordable real estate districts, which means that within a particular project we build an entire infrastructure of retail, social and recreational elements to create a comfortable environment for our residents.
Do you remain the owner of the properties or do you sell them after you build them?
Our company has a large landbank in different regions and we create value by generating cash from the constant development of real estate and selling the apartments to the customers. Moreover, most of the sales are actually done before the completion of the buildings. Usually we start selling the apartments when we start the vertical development of the building and when it is completed in most cases it’s already sold.
How many buildings do you build per year?
We have hundreds of thousands of square meters of completions and sales per year. As an example, in the first half of this year we sold 270,000 m² of new space to our customers. This number accounts for 18% growth compared to the first half of 2011, which is a positive sign that the market is actively developing. The reason is very simple; there is a lack of new housing, the housing stock is deteriorating and there is a huge demand for new, affordable mass housing. This demand is not coming only from Moscow, but from all the regions, as people from other regions are interested in buying apartments in Moscow.
What kind of partnerships do you have and who would you like to partner with in the future?
We are interested in making partnerships on a project level. We have had positive experience in making joint ventures, for example in the end of 2007 we made a joint venture with Singapore fund GIC Real Estate on one of the mass housing products in Moscow and the Moscow region.
Are foreigners generally welcome in Russia right now in terms of investing in property?
The short answer is yes, but historically most of them are interested in commercial real estate. However, we see that the confidence is coming back and foreigners are looking into other sectors, warehouses, street retail and houses. As for the process of entering Russia, everything is now running smoothly and the country is ready to accommodate foreign investors.