DEVELOPERS SENSE MANUFACTURING INDUSTRY GROWTH

30/05/2017

Vladislav Ryabov, PSN Group Vice President for Land Asset Management, discusses in the following Expert interview the new promising industrial sites and the role of industrial development in the Russian manufacturing industry.

— Vladislav, as far as I know, PSN Group is a major residential developer. How long have you been involved in industrial development?

— That's correct. Construction and management of residential real estate is our core business stream. Yet PSN Group is also a major landlord, owning and managing over 40,000 hectares of land assets. Until recently we as a company focused on managing agricultural land. In 2015, we decided to repurpose 200 hectares of agricultural land into industrial land. Since then PSN Group has been growing actively in the industrial development sector and has already made great progress in this area. We still manage cropland but focus mainly on industrial territories.

— Does your shift to industrial development have anything to do with the beginning of manufacturing industry growth in the Russian economy? Has there been any rise in demand from businesses?

— Naturally, before converting such a large area into industrial land we closely monitored the market to detect any demand or need for that type of land. We found out there was. Proof of this are the purchase and sale deals we have been closing. We also analyze developments in associated business sectors. For example, we analyzed the market for warehouse properties in the Moscow Region and found out that deals in this sector amount close to a million square meters annually. This suggests that warehouse properties, which are similar to industrial properties in terms of their specific features, are feeling confident, stable and poised for growth. Warehouses represent an associated market sector, which can serve as one of the metrics of the manufacturing industry. Our assumptions proved true when we found the first residents for our Chashnikovo industrial park in record time.

— What is the appeal of the Chashnikovo industrial park for industrial manufacturers?

— Chashnikovo is in a very strategically advantageous location. First, the park is sited on the first line of the M10 toll-free highway, which is the major thoroughfare connecting Moscow and St. Petersburg. Second, Sheremetyevo International Airport is just 15 minutes' drive from Chashnikovo. The area where the industrial park is located also has a high concentration of institutions of higher education that train technical professionals. It is also a plus for our park. The biggest advantage of Chashnikovo is the even terrain of the site and the availability of facilities for connecting the utility lines: water, electricity, gas, and sewage systems. Note that we provide utility lines for the entire park and not just a specific lot sold to a resident.

We managed to quickly find the first residents as soon as the Chashnikovo land was repurposed for industrial use. After less than six months, a Russian furniture maker bought half a hectare of land from us; a major Western food additives maker then became our resident. I am aware that many industrial parks in the Moscow Region spend years looking for residents. We have been able to accomplish this much sooner.

— Why do you think you have managed to attract the first buyers so quickly?

— We are willing to assist our partners, for example, with obtaining urban development documents and permits. Partner banks of PSN Group — Promsvyazbank and Renaissance Bank — offer affordable and discounted mortgages to our residents.

Our company also draws on extensive expertise in construction and development, which enables us to provide competent services across a range of construction-related issues.

— Apart from Chashnikovo, what other industrial sites in the Moscow Region can you offer?

— We will be shortly announcing a few more major industrial parks elsewhere in the Moscow Region: in the west and southeast.

For the time being, we focus on Chashnikovo and other industrial sites in Solnechnogorsk District such as Kochugino with an area of 40 hectares at the intersection of the Moscow Small Ring Road and the M11 toll highway. Here we have a slightly different property concept. We are selling it in smaller parts with utility lines already installed. We also see demand for this product and have closed a whole number of deals already. We also have a site of about 11 hectares in Radishchevo. This strategically located site enables a potential resident to build a Hazard Class 3 (or even 2) industrial facility, which is a rare opportunity in the Moscow Region.

PR Department

PSN Group

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