Andrey Berezin, co-owner of Euroinvest investment company, told Novy Prospekt why own construction business turned out to be the right decision, which foreign businesses have offered to buy companies over the past three months, and why the economy of the future is the economy of human capital and intellectual potential.
Andrey Valeryevich, how did the sanctions affect the holding’s projects? Did you feel the sanctions pressure?
- We are seeing a decline in development activity. It is connected first of all with a rise in price of a mortgage. Although mortgages have returned to their previous levels, people have begun to look very carefully into the future. According to some reports, the volume of mortgages has fallen 10 times. We are introducing mortgage rate compensation programs. We have programs that allow you to get a mortgage even at 0.1% per annum. But there is definitely a drop in sales.
Do you think this situation will improve? Roll back?
- Not sure. Now the main problem for developers is the launch of new projects on the market. We launched a new project on Engels Avenue in early February, and, of course, it will also be completed. New projects are still in doubt, but in general we have a stable situation, and we will commission all the objects. In general, we have few projects at the initial stage of implementation, and there are no problems with their financing. For example, we received decisions from credit committees to issue us money for two projects in the city and one in the region. But for now, we do not take this money, because we want to understand what will happen next.
How many square meters are currently under construction?
- We have about 300-400 thousand m2 in construction.
What is your current land bank? How has it changed over the past year?
“Of course, we have land for construction, and there are even plots with building permits. But now we do not position ourselves as landowners. On the contrary, we have many projects where we buy land or agree on some kind of shared conditions with the owners. When we come to the landowners, they understand that we can offer the best conditions, because we build with high quality and our prices for apartments are higher than those of our competitors. But despite this, sales go faster. The reason is that we always rent out almost all houses ahead of schedule. This position allows us to keep prices and develop further. And everyone sees it! Today we do not seek to «inflate» the development business. It would be possible to take and launch projects on all our lands, but we did not begin to do this.
You recently received permission to build apartments on the street. Kurchatov. Will you build?
— Yes, we have received a building permit and a permit from the credit committee, but we are not starting to build. Preferential mortgages do not apply to apartments, so it will be difficult to sell them now. Now the question is not how to make money — it is important to save the company and hand over the existing facilities on time. And then we will look at the situation.
In the current situation, can you give any forecasts, what will the construction market be like?
- What kind of forecasts can there be … If the mortgage rate is low, and its issuance is stable, then it will be possible to predict something. Although I think that the market in any case will not return to its previous wonderful indicators, because people will make decisions very carefully and for a long time. Even when the situation stabilizes, buyers will subconsciously think about risks and lack of stability. The market can develop only when there is a complete understanding of the rules of the game for both the business and the buyers. When we return to this understanding, growth will begin.
What share does the construction business take in the structure of your holding?
- In terms of turnover and profit — more than 50%.
That is, when you started building on your own a few years ago, did this decision more than justify itself?
- Undoubtedly. You need to understand what Euroinvest Development is. This is, first of all, a great team, without which we would not have started this business. This can be seen in many ways.
What is happening with your agricultural assets now? Given the course towards import substitution, this direction should take off.
“We bought equipment, put the overgrown fields in order, invested in the creation of a dairy shop. Unfortunately, now fertilizers and other important things have risen in price rather sensitively. By the way, I don’t really understand why fertilizers have risen in price, given that they cannot be exported now. But nonetheless. In the future, we will be more actively involved in the agricultural project. It is already clear that there will be trouble with food in the world. And even in this zone of risky farming, which includes our land in the Pskov region, it is necessary to develop agriculture. In a sense, this is a social project. At some point, two of our collective farms were the only recipients of regional state support in the Dnovsky district of the Pskov region for dairy products. But I would not say that agriculture is a strategic direction of our activity.
Aleksandra Konfisahor.
