Construction sector in Russia, H2 2012 Development forecasts for 2012-2015
  • Date of issue: October 2012
  • Pages: 165
  • Delivery: Pdf file

Construction sector in Russia, H2 2012

Development forecasts for 2012-2015

The purpose of this report is twofold. It is intended to function as a comprehensive source of information on the current status and activity of the combined market and its core segments – non-residential and commercial, residential, and civil engineering and infrastructure construction operations. 

The second objective of this unique publication is to update interested professionals on developments as of H2 2012 with regard to trends, regional levels of growth, changes in macroeconomic indices and investments from sources both inside and beyond Russia’s borders.

The report also supplies essential profiles of major market players and insightful forecasts for the development of Russian construction to 2015.

 

The report supplies content essential to a complete understanding of this market, such as

  • Comprehensive analysis of Russian construction as evidenced by changes in wages, employment, price levels, value and number of participating companies
  • Examination of market conditions in connection with macroeconomic trends, government and private investments and foreign financial involvement in Russian projects
  • Separate analysis of each of the market’s most important segments – residential, non-residential and civil engineering, as well as popular sub-segments 
  • Insightful projections for market growth to 2015 for each key segment
  • Strategic reporting on Russia’s chief construction companies, with updates on their financial status, recent projects and new business development.

 

Features unique to this publication

  • Data describing the residential, non-residential and infrastructure construction segments in outstanding detail, along with performance projections for each until 2015
  • Analysis of market trends affecting projects, prices and expansion
  • Details on recent contracts and current financial status of the most influential construction companies on the Russian market
  • Projections for the value of construction and assembly production until 2015, categorized into residential, non-residential and civil engineering construction
  • Calculated results for total apartments completed in Russia by 2015.

 

Benefit from reliable answers to important questions like these

  • What are the major regulatory issues affecting today’s construction market in Russia? 
  • What is the fiscal condition of the market’s top companies? What projects are they currently working on? How many companies are active in the current market?
  • What is the regional outlook for new construction in all major sectors for the years ahead?
  • Which trends and indicators are currently active in non-residential construction subsegments?
  • What is the price change trajectory for recent months, current status and looking forward?
  • What is in store for Russia until 2015 in terms of new apartment construction? Road construction?
  • What is the current value of the entire market? Of each individual segment? How will these numbers change over the next three years?

 

Companies analysed in this report

Accor Group, Adamant Group, AFI Development, AMMA Development, Antoine Grumbach & Associes SA, Avtodor, Basic Element, Buro Happold, Crocus Group, Fairmont Raffles International, Gillespies, RZhD, Renova Group, Mostotrest, Leader Group, Hals Development, Hilton Worldwide, Hochtief, IKEA, InterContinental Group, PIK Group, PNK-Group, Raven Russia, Renaissance Development, Strabag, SU-155, Tashir Group, Urban Design Associates, Vinci, Wilmotte & Assicies SA.

 

Use the data and analysis in this document to

  • Begin operations in Russian construction
  • Enter a new segment of this market
  • Participate in merger or acquisition activity
  • Create a winning corporate strategy
  • Evaluate promising investment opportunities
  • Track the competition in Russian construction
  • Accurately evaluate your company’s market share
  • Predict upcoming levels of demand for construction materials
  • Prepare evaluations of this market for corporate shareholders or managers.

 

Professionals positioned to utilize this report most often include

  • Manufacturers and distributors of construction materials and equipment
  • Contractors operating in Russia and foreign construction companies that invest in Russia
  • Consulting, research and analysis providers
  • Government agencies, embassies, universities and research institutes
  • Chambers of commerce, trade and industry organisations, financial institutions.

 

Extract from this report

  • In August 2012, the government approved the Construction Road Map plan, which specifies that the number of procedures which will be needed to obtain a building permit should be reduced from the current 51 to 15 by 2015 and to 11 by 2018, and the period needed for all of these mandatory process will be reduced from the current 423 days to 130 days by 2015, and to 53 by 2018. This includes more rapid approval of site related documentation.
  • During 2012-2020 about 120,000 km of road lanes will be built across the country. The total funding that the public authorities are expected to allocate for road infrastructure projects during this time-frame will exceed RUB 8,000bn ($260bn), of which RUB 4,500bn ($150bn) is expected to come from the federal road fund, while the remaining amount should come from regional road funds.
  • The government is continuing to implement the residential construction support programme, the 2011-2015 Housing Programme, which targets an increase in annual housing construction levels from about 62.3 million m² in 2011 to 90 million m² in 2015.

 

Market commentary by expert

In the first half of 2012, the industry was boosted mostly by projects funded by the public sector, whereas private entities remained reluctant to commence new initiatives. The government infrastructure programmes aimed at modernising the country’s transport system, energy industry, social infrastructure, and the preparations for the 2014 Sochi Winter Olympics played an important part in the evolution of the industry over this period. To improve the business climate in the industry, the Russian government plans to approve 21 so-called Road Maps by mid-2013. These will establish specific measures in most industries aimed at accelerating growth, particularly by reducing bureaucracy, prompting foreign direct investments and modernising the existing infrastructure.

 

Vitalie Iambla, Construction market Analyst

 

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  1. Methodology p. 9

  2. Executive summary p. 11

  3. Macroeconomic overview p. 23

    • Macroeconomic background p. 23
      • GDP p. 23
      • Gross value added in construction p. 24
      • Gross fixed capital formation p. 25
      • FDI p. 26
      • Labour market p. 28
      • Wages p. 29
      • Consumption p. 30
      • Inflation p. 31
      • Oil prices p. 31
      • Market outlook p. 32
    • Demographics p. 33
  4. Construction overview p. 37

    • Construction market value p. 37
    • Construction companies p. 42
    • Employment and wages p. 42
    • Construction costs p. 44
    • Business confidence in construction p. 45
    • Building materials industry overview p. 48
    • Major legal changes p. 50
    • Forecast p. 54
  5. Civil engineering p. 59

    • Overview p. 59
    • Roads p. 64
    • Railways p. 75
    • Airports p. 82
    • Ports and internal waterways p. 86
    • Environmental protection-related projects p. 87
    • Investments in heavy industry p. 91
    • Stadiums p. 95
    • Forecast p. 96
  6. Non-residential construction p. 99

    • Overview p. 99
    • Office construction p. 100
      • Moscow p. 100
      • St. Petersburg p. 103
      • Major planned office projects p. 105
    • Shopping centre construction p. 106
      • Moscow p. 108
      • St. Petersburg p. 109
      • Outside the two capitals p. 109
      • Projects in the pipeline p. 111
    • Logistics centre construction p. 112
      • Moscow p. 112
      • St. Petersburg p. 115
      • Outside the two capitals p. 117
      • Major planned industrial and warehouse projects p. 119
    • Hotel construction p. 120
      • Moscow p. 120
      • St. Petersburg p. 121
      • Major planned hotel projects p. 123
    • Forecast p. 124
  7. Residential construction p. 127

    • Housing stock p. 127
    • Completed homes p. 130
    • Residential construction in the regions p. 132
    • Individual residential construction p. 137
      • Major residential projects p. 139
    • Residential construction development programme p. 141
    • Housing prices p. 143
    • Mortgage market p. 146
    • Forecast p. 146
  8. Competitive environment p. 149

    • Market competition p. 149
    • Financial standing p. 153
    • Latest mergers and acquisitions p. 154
    • Key producers of building materials p. 156
  9. List of graphs p. 157

  10. List of tables p. 161

  11. About PMR p. 163

  12. Contact PMR p. 164

List of graphs

  1. GDP at current prices in Russia (RUB bn) and real change (%, y-o-y), 2006-2014      11
  2. Construction output in Russia (RUB bn) and real change (%, y-o-y), 2006-July 2012      13
  3. Construction output in Russia (RUB bn) and real change (%, y-o-y), 2008-2015      15
  4. Civil engineering construction output in Russia (RUB bn) and change (%, y-o-y), 2008-2015      18
  5. Non-residential construction output in Russia (RUB bn) and change (%, y-o-y), 2008-2015      20
  6. Total floor area of residential space commissioned in Russia (million m2) and change (%, y-o-y), 2006-H1 2012      21
  7. Residential construction output in Russia (RUB bn) and change (% y-o-y), 2008-2015      22
  8. GDP at current prices in Russia (RUB bn) and GDP real change (%, y-o-y), 2006-2014      24
  9. Share of GVA in construction in total GVA and its real change (%) in Russia, 2006-2011      25
  10. Change in GDP and gross fixed capital formation in Russia (%, y-o-y), 2006-2014      26
  11. Foreign direct investment in Russia ($ m), 2008-2011      27
  12. Unemployment rate in Russia (%, e-o-p), 2006-2014      28
  13. Average monthly gross wages in Russia ($), nominal and real change (%, y-o-y), 2008-2014      29
  14. Changes in average real monthly gross wage, household consumption and unemployment rate in Russia (%, y-o-y), 2006-2014      30
  15. CPI in Russia (%, e-o-p, y-o-y), 2006-2014      31
  16. Brent oil prices ($ per barrel), 2007-2014      32
  17. Population (‘000, e-o-p) and change (%, y-o-y) in Russia, 2006-2014      34
  18. Population (‘000, e-o-p) and share of urban population (%) in Russia, 2006-2010      34
  19. Population in Russia, by age groups (%), 2006-2010      35
  20. Construction output in Russia (RUB bn) and real change (%, y-o-y), 2006-July 2012      38
  21. Construction output in Russia (%), by leading regions, H1 2012      39
  22. Average number of people employed in the construction industry in Russia (‘000), 2006-2011      43
  23. Average gross monthly wage in the construction industry in Russia (RUB) and nominal change (%, y-o-y), 2006-2011      44
  24. Producer price indices in construction in Russia (%, y-o-y), 2006-July 2012      45
  25. Business confidence index in the construction industry in Russia and EU countries (%), 2001-Q2 2012      46
  26. Average capacity use rate in the Russian construction industry (%), 2001-Q2 2012      47
  27. Main obstacles to doing business for Russian construction companies (% share of companies as proportion of total number), Q1 2011-Q2 2012      48
  28. Construction market breakdown in Russia (%), 2008-2015      56
  29. Construction output in Russia (RUB bn) and real change (%, y-o-y), 2008-2015      57
  30. Hard-surfaced roads completed in Russia (km), 2000-2011      66
  31. Bridges completed in Russia (running metres), 2000-2011      66
  32. Roads operated by Avtodor, 2012      70
  33. Construction and modernisation of roads operated by Avtodor (km), 2011-2019      71
  34. Planned network of roads operated by Avtodor in 2030      73
  35. Railway construction in Russia (km), 2000-H1 2012      75
  36. Railway infrastructure, planned development in Russia, 2010-2030      79
  37. Paved airport runways completed in Russia (‘000 m2), 2000-2011      83
  38. Fixed capital investment in environmental protection and sustainable use of natural resources in Russia (RUB bn), 2000-2011      88
  39. Environmental protection facilities completed in Russia, 2000-2011      89
  40. Capacity for power plant to be put into operation in accordance with capacity delivery agreements in Russia (MW), 2010-2017      92
  41. Location of stadiums for the 2018 FIFA World Cup in Russia      95
  42. Civil engineering construction output in Russia (RUB bn) and change (%, y-o-y), 2008-2015      97
  43. Shopping centre GLA in Russia, total and newly added (million m2), 2008-2014      106
  44. Number and GLA (‘000 m2) of shopping centres in Moscow, 2006-2014      108
  45. Number and GLA (‘000 m2) of shopping centres in St. Petersburg, 2006-2014      109
  46. GLA in shopping centres in Russia (%), by cities, 2011      110
  47. Average warehouse construction costs in the Moscow area ($/m2, incl. VAT), 2007-2011      115
  48. Non-residential construction output in Russia (RUB bn) and change (%, y-o-y), 2008-2015      125
  49. Total housing stock in Russia (million m2, year-end), 2005-2011      128
  50. Old and dilapidated housing in Russia (million m2), 1996-2011      129
  51. Total number of homes built in Russia (‘000 units) and change (%, y-o-y), 2006-2011      131
  52. Total floor area of residential space commissioned in Russia (million m2) and change (%, y-o-y), 2006-H1 2012      131
  53. Average size of homes built in Russia (m2), 2000 and 2005-2011      132
  54. Construction of residential floor space in Russia (%),by leading regions, H1 2012      134
  55. Individual construction of housing space as a proportion of total housing space completed in Russia (%), 2006-July 2012      137
  56. Total number of detached houses built by individuals in Russia (‘000 units) and change (%, y-o-y), 2006-2011      138
  57. Total floor space of detached houses completed by individual builders in Russia (million m2) and change (%, y-o-y), 2006-July 2012      138
  58. Planned volume of new residential space to be commissioned in Russia in accordance with the Housing Programme (million m2), 2011-2015      142
  59. Planned average living floor area per resident in Russia in accordance with the Housing Programme (m2 per resident, year-end), 2011-2015      142
  60. House Price Index changes in Russia (%, y-o-y), 2005-Q2 2012      143
  61. Value of mortgages granted in Russia (RUB bn), 2005-2012      146
  62. Residential construction output in Russia (RUB bn) and change (% y-o-y), 2008-2015      148

List of tables

  1. Construction output in federal subjects of the Russian Federation, 2010-H1 2012      40-41
  2. Production and consumption of cement in Russia (million tonnes) and change (%, y-o-y), 2006-July 2012      49
  3. Change in production of basic building materials in Russia (%, y-o-y), 2007-July 2012      49
  4. Prices of selected materials procured by contractors in Russia, July 2012      50
  5. Total length of motor roads in Russia (‘000 km, at the end of the year), 1992, 1995, 2000 and 2005-2011      65
  6. Completion of roads in Russia, by category (km), H1 2012      65
  7. Major road construction projects implemented in Russia, H1 2012      67
  8. Total length of federal roads in Russia to be under control of the Federal Road Agency, and investment planned for extensive modernisation, repair and maintenance work (RUB bn), 2012-2015      68
  9. Major PPP projects planned by Avtodor, 2011-2019      72
  10. Major road projects in Russia, 2012-2018      74
  11. Major railway projects in Russia, 2012-2018      81
  12. Major airport infrastructure projects implemented in Russia in H1 2012      82
  13. Major airport projects in Russia, 2012-2015      85
  14. Major infrastructure projects in Russia’s sea ports, H1 2012      86
  15. Seaport construction and internal waterway projects in Russia (RUB m), 2012-2015      87
  16. Major environmental protection projects in Russia, 2012-2017      90
  17. Shares of power stations as a proportion of combined power generating capacity in Russia, 2011 and 2030      91
  18. FSK-EES’ investment programme, 2012-2014      93
  19. Major heavy industry projects in Russia, 2012-2018      94
  20. Planned construction and modernisation of stadiums for the 2018 FIFA World Cup     95
  21. Non-residential buildings completed in Russia, 2006-H1 2012      100
  22. Basic indicators for the Moscow office property market, H1 2012      101
  23. New supply of office space in Moscow, H1 2008-H1 2012      101
  24. Planned major business centre launches in Moscow in H2 2012      102
  25. Basic indicators for the St. Petersburg office property market, H1 2012      103
  26. Planned business centre launches in St. Petersburg in H2 2012      104
  27. Major office projects in Russia, 2012-2015      105
  28. Largest shopping centres launched in Russia in 2010-2011      107
  29. Projects with at least 90,000 m2 of GLA in the pipeline in Russia, 2012-2014      111
  30. Basic indicators for Moscow warehouse property market, H1 2012      112
  31. Major new warehouse properties commissioned in Moscow and Moscow Province in H1 2012      113
  32. Major new warehouse properties expected on the market in Moscow and Moscow Province by the end of 2013      113
  33. Major transactions concluded on the warehouse property market in Moscow, H1 2012      114
  34. Basic indicators for St. Petersburg warehouse property market, H1 2012      116
  35. Major transactions concluded on the warehouse property market in St. Petersburg, H1 2012      116
  36. Major new warehouse properties expected to be put on the market in St. Petersburg by the end of 2013      117
  37. Total area of high-quality warehouse space in Russia, excluding Moscow and St. Petersburg      117
  38. Major industrial and warehouse projects in Russia, 2012-2017      119
  39. Basic indicators for Moscow market of three-to-five star hotels, H1 2012      120
  40. Major hotel launches in Moscow in 2012-2013      121
  41. Basic indicators for St. Petersburg hotel market, H1 2012      122
  42. Major hotel projects in Russia, 2012-2018      123
  43. Goals of the Construction Road Map in Russia, 2012-2018      131
  44. Total floor space of housing units completed in subjects of the Russian Federation, 2010-July 2012      135-136
  45. Major residential projects in Russia, 2012-2017      139-140
  46. Russian regions with the widest gaps between housing prices and housing construction costs, July 2012      145
  47. Financial data of top 20 contractors in Russia (RUB m), 2008-2011      151
  48. Largest residential property developers in Russia (%), 2010-2011      152
  49. Financial results of companies active on the construction and property markets in Russia, H1 2012      153
  50. M&A transactions in Russian construction and property development, 2011-2012      155