RusBankrot
We know everything about bankruptcy
24/11/2024
Sunday
THIS DAY IN HISTORY:
24 November 
1970 The United States and the USSR ratified the nuclear non-proliferation treaty.
1970 The Central Committee of CPSU restored the national autonomy of the Kalmyks, Karachais, Balkars, Chechens and Ingush.
1970 Charles Darwin published The Origin of Species - the first edition was sold out in a day.
24 November
1970 The United States and the USSR ratified the nuclear non-proliferation treaty.
1970 The Central Committee of CPSU restored the national autonomy of the Kalmyks, Karachais, Balkars, Chechens and Ingush.
1970 Charles Darwin published The Origin of Species - the first edition was sold out in a day.
91 real estate developers went bankrupt in Russia over the first five months of 2021
91 organizations that were engaged in construction of multi-apartment residential buildings in the country declared insolvency. In total, 165 buildings, the useful area of which is more than 1 million square meters, remained unfinished. As a result, the growth in the number of bankrupt developers amounted to 14% compared to the data of 2020, while the volume of their construction projects increased by 4%.
According to Kommersant, citing information provided by RACC (Rating Agency of the Construction Complex), the insolvency procedures affected, first of all, small and medium-sized enterprises the construction volumes of which did not exceed 50,000 sq.meters of housing. Moreover, half of the companies had even less volumes, not exceeding 10 thousand square meters.
According to experts, there are many reasons for the bankruptcy of such developers. Someone made mistakes in the field of marketing or made mistakes with financial transactions, which were not always sustainable against the backdrop of the pandemic. Many did not cope with sales amid social instability.
Mortgages and growing demand for housing during the pandemic have driven prices up across the country. In some regions, the growth was 25%. The money of citizens investing in housing under construction rushed to the capital region and to the south of Russia. Reduced migration flows and rising prices for building materials exacerbate the upward trend in housing costs.
As for the equity holders, who have invested their savings in unfinished apartments, their fate has not yet been determined. Most likely, the ‘victims’ of bankrupt developers will have to resolve the issue in cooperation with the Federal Fund for the Protection of the Rights of Shareholders. According to Kommersant, about 146,000 citizens have suffered in Russia.
According to Kommersant, citing information provided by RACC (Rating Agency of the Construction Complex), the insolvency procedures affected, first of all, small and medium-sized enterprises the construction volumes of which did not exceed 50,000 sq.meters of housing. Moreover, half of the companies had even less volumes, not exceeding 10 thousand square meters.
Only five firms were constructing residential buildings, hoping to rent up to 100 thousand square meters.
According to the CEO of RACC, Fyodor Vylomov, such data testify to the industry problems observed last year. Many developers have still managed to attract money from equity investors using a scheme that was in effect before the mandatory introduction of escrow accounts. Moreover, firms that filed for bankruptcy account for a little more than 1% in the total volume of housing being built in Russia by the beginning of the summer of 2021.According to experts, there are many reasons for the bankruptcy of such developers. Someone made mistakes in the field of marketing or made mistakes with financial transactions, which were not always sustainable against the backdrop of the pandemic. Many did not cope with sales amid social instability.
Most experts unanimously admit that we are talking about the bankruptcy of mainly small firms operating according to the old scheme.
All developers who switched to project financing, the mechanism of which was regulated by Law 214, even improved their financial performance.Mortgages and growing demand for housing during the pandemic have driven prices up across the country. In some regions, the growth was 25%. The money of citizens investing in housing under construction rushed to the capital region and to the south of Russia. Reduced migration flows and rising prices for building materials exacerbate the upward trend in housing costs.
As for the equity holders, who have invested their savings in unfinished apartments, their fate has not yet been determined. Most likely, the ‘victims’ of bankrupt developers will have to resolve the issue in cooperation with the Federal Fund for the Protection of the Rights of Shareholders. According to Kommersant, about 146,000 citizens have suffered in Russia.
27.10.2021
