OPERATING REVIEW

In 2020, despite the COVID-19 restrictions, the Company launched a new project, Vrubelya, 4, and significantly increased total supply and contract sales. Contract sales grew 16.7% in volume terms, while in value terms they increased 59.1% thanks to higher prices. Investment in new project acquisition and development in 2020 exceeded RUB 20 billion.

Project highlights
Metric 2018 2019 2020 2020 vs 2019 change, %
Projects in Moscow 3 5 5
Existing and prospective projects, thousand sq m 434 660 662 0.3
Supply, thousand sq m 53.4 137.2 193.5 41.0
Contract sales, thousand sq mIncluding contracts signed in the calendar year and registered in the following year. 40.3 76.7 89.5 16.7
Contract sales, RUB millionIncluding contracts signed in the calendar year and registered in the following year. 11,533 18,124 28,831 59.1
Cash receipts, RUB million (including escrow accounts) 13,169 15,772 29,796 88.9

The COVID-19 restrictions forced the Company to suspend construction from 13 April to 11 May 2020. The operations were also impacted by disruptions in material and component supplies due to the lockdown, including in Europe. On top of that, closed borders and the pandemic-induced outflow of migrant workers led to a 30–40% staff shortage at construction sites.

Despite the negative impact of COVID-19, when the restrictions were lifted, the Company was able to resume all projects in full within the shortest time possible and in strict compliance with employee health protection requirements. This was largely possible thanks to a new industry sanitary and epidemiological standard for construction sites that was developed at INTECO’s initiative.

In 2020, the Company started sales in its Vrubelya, 4 premium-class residential development. Overall, INTECO increased total supply during the year by 41%, with contract sales up 16.7% in volume terms.

This surge was due to higher real estate prices, deferred demand following the lifting of COVID-19 restrictions, and more mortgage loans issued thanks to government subsidies. In 2020, 56% of flats in INTECO’s projects under construction were sold via mortgage-based transactions, with government-subsidised mortgage loans used to finance 30% of all signed shared-equity construction contracts.

Contract sales (in volume terms) by project in 2020, %

In 2020, three of the Company’s projects (Westerdam, West Garden and Vrubelya, 4) fully relied on escrow accounts. After closing the sales in Sadovye Kvartaly, INTECO will fully transition to this arrangement.

Sales in key projectsIncluding sales of non-residential premises and parking lots., sq m
Cash receipts from key projectsIncluding escrow accounts. RUB million
Average price of flats in key projects, RUB thousand per sq m

INVESTMENT AND CONSTRUCTION PROGRAMME

In 2020 INTECO invested RUB 20.5 billion on project acquisition and development (78% of raised funds were spent on three projects — Sadovye Kvartaly, West Garden and Westerdam).

Project timeline
  • 2018

    The Company is developing three projects — the Sadovye Kvartaly housing estate, Liners mixed-use apartment complex and Balchug Residence elite-class apartment complex.

  • 2019

    Sadovye Kvartaly and Balchug Residence remain in the active phase, while sales in Liners are closed.

    Two new residential developments, Westerdam and West Garden, are redesigned, with housing units made ready and available for sale.

    The Company acquires Ilyinka.

  • 2020

    Sadovye Kvartaly, Westerdam, West Garden and Ilyinka are in the active phase.

    The Company acquires a new project, Vrubelya, 4.

    Transactions are being actively prepared for two new projects — Tankovy and Sergeya Makeeva (the transactions were completed in 2021).

NEW PROJECT ACQUISITION

In March 2020, INTECO acquired JSC SZ Vrubelya 4, who owned the land, design documents and construction permit for a residential complex in the artist village in Moscow. On 31 December 2020, the Company made advance payments to finance the acquisition of new land for Tankovy and Sergeya Makeeva.

Projects acquired in 2020
Address Land, ha Class Flats, thousand sq m
4 Tankovy Dr. 8 Business 100
11/9 Sergeya Makeeva St.As at 31 December 2020, the Company had signed the sale and purchase agreement, but had not put the project on its balance sheet. 3 Premium 55
4 Vrubelya St. 6 Premium 18