Krasnodar, 2 April.
Today our guest is Sergei Ivanov, President of Development Yug Construction Company.
Q.: What are the guiding principles for your Company to achieve success?
A.: These principles are quite simple. First, a developer must clearly understand what the market needs and what products are in demand. The time of the ‘seller’s market’ is over; developers must direct their effort towards their buyers only. Secondly, businesses must keep all their scores clearly and transparently: pay all taxes, and pay decent wages to their employees.
Q.: How can the buyers’ confidence be gained?
A.: All is simple. You have to keep to your obligations, never cheat and do what you promised. All relations between the constructor and the consumer must be clearly set forth on paper to rule out any discrepancies.
Q.: Could you review the results of your work? In what cities is your Company present?
A.: For twenty-five years, our Company has built over 2 million square metres of housing property. More than 75,000 people live in flats built by Development Yug. We operate in five cities: Krasnodar, Perm, Astrakhan, Rostov-on-Don, and Bataisk. In the near future, we will launch new projects in Nizhny Novgorod and Vladivostok.
Q.: Last year, new rules for the construction market were introduced. Now developers must closer work with banks, and open escrow accounts there. Was the shift to the new system painful? What are its advantages?
A.: We had been ready to the changes that took place last year. It was back in 2009 when we assumed the project financing system and respectful work with banks. So now our finance staff are probably among the best specialists in their respective field nationwide. There are lots of advantages of such cooperation: the bank seriously follows the company’s financial policy and the course of the project – for it does not need any problems, it wants the company to finish its project with a certain profit. The new rules are also good for the buyers, because they guarantee that all buyers should get their flats in time.
Q.: In your opinion, how will the market be changing now?
A.: On the one hand, the construction industry must fulfil [the relevant Presidential] decrees – that is, to achieve the annual figure of 120 million square metres of new residential facilities, of which individually built houses should amount to about 30 million square metres. Correspondingly, about 90 million square metres should be falling on blocks of flats. What is more, now the emphasis is being put on comprehensive development. Currently, only about 45 million square metres a year are built [in Russia]. If such speed would persist, it would be very hard to reach the figures declared by the national project. To achieve them, the developer, the bank and the local executive power must work in synergy. It should also mean changing the urban space. Even in Krasnodar, just two blocks from Krasnaya street we can see a lot of work for a construction company. What many cities also need is to build social objects: schools, kindergartens and polyclinics – they are lacking everywhere. Another point of growth is development of the road traffic infrastructure. I believe that all players of the construction industry will be actively involved in the processs of solving all these problems.
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