(Reuters) - Russia's biggest housing developer, PIK Group, expects a positive resolution to long running debt restructuring talks with its creditors, and said housing sales had picked up in early summer.
"At the moment we are at an advanced stage in talks with creditors and hope that in due time we can publicly disclose the results," PIK Group President Pavel Poselyonov told the Reuters Russian Investment Summit.
"They are keen to talk to us. We are in active talks with creditor banks, and they are as comfortable as could be expected."
Property developers have been among Russia's worst-hit businesses in the financial crisis as rents plummet and family housing budgets shrink amid rising unemployment.
PIK, which builds and sells flats, mostly for low- and middle-income families in Moscow and the surrounding area, owes Russia's top lender, state controlled Sberbank SBER03.MM, 14.2 billion roubles ($464 million).
It owes No. 2 lender VTB (VTBR.MM), also state owned, 2.7 billion roubles. Newspapers have reported that the bank is willing to accept flats in exchange for the debt.
"Each time, a financial model is calculated separately and in one case it's favorable to pay with assets, in another it might be better to extend the loan," Poselyonov said. "It's pure economics and there is no one answer."
Russia's two top banks have built up heavy positions in real estate as more developers hand over assets to pay off debt.
A Sberbank executive said last month the bank would try to sell off real estate assets and had some ready-to-sell flats on its balance sheet.
"That's an absolutely unrealistic prediction," Poselyonov said. "Banks will never dump flats. If the bank is the developer's main creditor and does that, it will destroy the business of the company it is financing," he said.
"That won't help anyone, including the bank."
Developers of office and retail properties have written down their portfolios by as much as 60 percent this year.
Poselyonov declined to specify the current value of PIK's portfolio but said residential properties had shown more resilience.
PIK has not reported net asset value since its Jan 1, 2008 figure.
It is planning to complete 800,000 square meters (8.6 million square feet) of housing this year, nearly the same as in 2008.
"We saw demand growth starting at the beginning of the summer and it has been stable since then. At the moment, demand is much greater than it was at the beginning of the year," he said.
"People were ready to buy. At the same time we started getting more wholesale buyers, who invested in construction at earlier stages. As a result we had incoming cash flows, which refreshed construction and started a chain reaction."
(Editing by Lin Noueihed)