The key objective of INTECO’s development strategy is to deliver shareholder value.
INTECO’s current strategy was adopted in 2018 under the new key shareholder to reflect changes in the Company’s priorities.
KEY STRATEGIC PRIORITIES
- Growth of shareholder value
- In 2020, the Company’s value grew by more than six times compared to 2019.
- Significant portfolio expansion
- INTECO’s project portfolio nearly doubled in value over the year.
- The Company acquired a new project, Vrubelya, 4.
- Deals have been prepared to acquire two more projects: Tankovy and Sergeya Makeeva. The transaction was completed after the reporting period, in 2021.
- In 2020, the investment and construction programme for project acquisition and development amounted to RUB 20.5 billion.
- To expand and develop its project portfolio, the Company employs a wide range of financial instruments, using both equity and debt financing. All new projects at the Company are financed through escrow accounts.
- Focus on comfort+, business, and premium investment and development projects in Moscow
- Ilyinka (elite)
- Vrubelya, 4 (premium)
- Sadovye Kvartaly (premium)
- West Garden (business)
- Westerdam (comfort+)
- Internal transformation to streamline business processes
- Target business model fully adopted, with a focus on investment and development projects.
- Project management framework transformed.
- INTECO’s integrated IT landscape created.
- Organisational structure optimised.
PROJECT PORTFOLIO DEVELOPMENT
A comprehensive and consistent approach to transactions and thorough evaluation of assets allow the Company to build its project portfolio efficiently. The key factor in decision-making is the impact of a new project on the growth of the Company’s value, which includes a conservative assessment of all implementation risks.
The site search procedure involves a multi-stage analysis to identify all associated risks, review the calculations and make a fully informed decision on the acquisition. This allows INTECO to reject sites that do not meet the criteria and only direct the Company’s resources to promising projects.
The Company considers whether the site conforms to the Strategy, and conducts a preliminary urban development analysis.
A technical analysis and a preliminary legal review are carried out, with a marketing statement and an investment model drafted.
For projects approved as a result of Stage 2, a detailed due diligence of all aspects and an independent cost assessment are carried out, with a safety statement drafted.
At all stages, decisions are made jointly. Decisions on new projects are first considered by the investment committee and then by the asset management committee of TRUST Bank and by INTECO’s Board of Directors.
In 2020, a consistent approach to site selection and a detailed multi-stage analysis allowed INTECO to successfully meet the target for increasing the Company’s value thanks to acquiring a new project, Vrubelya, 4, and preparing the transaction for the Tankovy and Sergeya Makeeva projects.
STRATEGY DELIVERY PLANS FOR 2021
- Acquiring new projects to further increase both the portfolio and shareholder value
- Developing financial instruments to diversify the sources of financing for new project acquisition and development
- Decreasing the corporate debt load
- Enhancing transparency to obtain a first credit rating and issue bonds in 2022
- Improving operating efficiency and developing existing investment and construction projects while staying on schedule and within budget
- Continuing to run the internal transformation programme and embracing comprehensive business digitalisation