In some luxury buildings do not buy apartment. Review of problem projects at developers of real estate says Elitnoe.ru

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    Condominium complexes and apartment projects have fallen into the category of illiquid, as well as a house under construction that could add to this list

    “Have you gone mad, to ask such questions?! It is even indecent!”, – angrily said one of the PR professionals on request “Elite.ru”. Naturally, to help in the preparation of this material, the staff member refused, as, indeed, many of his colleagues. The real estate market well talk about winning, we decided to pay attention to development failures and setbacks. The result of the two dozen largest real estate agencies in Moscow about “outsiders sales” in the market of expensive real estate agreed to speak only half, and that is mainly on the condition of anonymity.

    How to break losing streak

    But, not to be a tool for realtors, we decided to write to the group of illiquid only the buildings, which have called at least three agencies. The brokers had to explain the reasons for the low consumer interest in these projects. Before proceeding to transfer the complexes, I want to draw attention to two things. First, not all development companies reveal the dynamics of sales, but if flats and apartments in the house sold by the Builder without the help of the realtors and not the POS, then find out the real picture is almost impossible. Therefore, it is not about ranking, but only on the list of “losers”, which was able to learn the wording “Elite.ru”.

    Sales in some projects for outsiders, I think realtors can last for 10-12 years

    Second, there is no single answer to the question what the dynamics of implementation can be considered successful. We decided to focus on data from Savills in Russia. According to the analysis of this company, in recent years, commissioned in the elite houses of remainders make up 25-30% of the total number of flats or apartments. That is, the norm can be considered a situation if the time of its completion in the complex sold in an average of two-thirds of the lots.

    Sales in some projects for outsiders, say the realtors, can be delayed for 10-12 years. But developers always have the opportunity to bring a set of blacklist. To do this, in most cases it is enough just to look at pricing. But to break the situation for developers is rare. In October 2015 “Elite.ru” wrote about the buildings in which the mistakes developers has led to a protracted sales.

    Three of the luxury apartment project, for which the market entry failed

    Then in our “black list” were: the apartment complex “merchant” from the EEOC (in the photo above, Bolshaya Yakimanka, 2), “project of luxury villas on the co-operative” with a long history of implementation (in 2012, the developer of “Restoration N” turned them into Knightsbridge Private Park, which is much more liked wealthy Metropolitan audience) and the apartments Turandot Residences developer Valartis Group (in the photo below, Arbat street, 24).

    Note that of these three, the situation is significantly improved only in Knightsbridge Private Park. According to the company Knight Frank, in late may, buyers are offered there are 15 lots, and given the fact that the complex was 163 apartments, we can conclude that the developer has really fixed their mistakes.

    In the second object, the apartment complex “merchant”, according to realtors, sales never happened. Ultimately, the building of the “Merchant” went to the Bank “OTKRITIE” (PJSC “Bank “FC Opening””), which lent to the project developer, the company “Corporation of development of territories” (KRT). The bankruptcy occurred in 2016 and the rights to the building were transferred to the Bank in may last year. Well, lots have been sold ever since on the secondary market.

    The situation with Turandot Residence also far from successful completion. By the time of its completion in 2014, there were sold only one lot of 35. The reason for the demand of the target audience, the realtors called high prices: before the crisis, the price of the “square” reached 28 thousand dollars, but in 2015 it dropped to 11 thousand dollars per square meter. Then managed to sell four more lots. Now, 3,5 years later, buyers are offered all the same 30 apartments (information Knight Frank).

    List black as Chocolate

    We now turn to the projects that we have not written. Blacklist is supplemented by a complex of premium “Chocolate” (developer – LLC “Kraft”) for 42 apartments. “Sales it was opened in 2007, but today there were seven 4-room apartments with area from 150 to 378 square meters”, – said the Chairman of the Board of Directors “best new Building” Irina Dobrokhotova.

    The second loser – LCD Novel House (in the photo below, the developer – construction company “Lenstroj”), sales of which started in late 2006. “The low pace of implementation was largely associated with the forced retraining of the building, which resulted in problems with planning and technical solutions, also the fault of the steel and somewhat higher prices,” – explains the Director of Department of elite real estate Est-a-Tet Alexey Sidorov.

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    The head of one of real estate agencies on condition of anonymity, added that at the beginning of this year the complex was still a few lots: “During this time, the project ceased to meet modern requirements of luxury homes, as his engineering and architectural solutions are outdated. Also, there is no well-developed internal infrastructure, the landscaping, the apartments large meats, as high prices do not allow them to compete with more modern projects.”

    Among the projects with the “complex fate” market participants have called LCD “Symphony of embankments” (pictured below, other name – “Tinkers, 21”, developer – “Building complex-207”). Against the construction of the public objected, but not too active, and in 2014, in a residential complex started selling. In total, the project planned 53 lots, of which, according to Knight Frank, 15 is still not sold.

    The main reason is that prices in this project are highly inflated. According to managing Director of “Metrium Premium” Ilya Melgunova, average prices in the residential complex “Symphony of Embankments” amount to 1,495 million rubles, and the average for the primary market of elite new buildings – 1,016 million rubles. In addition, the completion date is first quarter of 2016 changed eight times. According to the latest data, enter the set-up the developer promised before the end of June this year.

    “So for a couple of years in a luxury building can be sold about 25 apartments, and that’s okay”

    In other projects, the situation with the sale of housing is somewhat better. However, everything depends on the question: “What do you mean “slow sales”?”. If built apartment complexes, we focused on the number of apartments unsold after entering houses in operation, in construction projects, the situation is much more complicated. According to the Director of the Department of urban real estate at Knight Frank Andrey Solovyov, in high-budget segment is not quite correct to talk about the objects with a low rate of sales, as there is rarely celebrated, the number of transactions more than 3-4 per month.

    “But 1-2 trades per month for luxury buildings are not a bad indicator,” he says. In the first quarter, leading analyst Ilya Mogunov, 85 new buildings of Moscow, the average rate of realization per month did not exceed 5 units. That is for the premium “standard” figure is 10-15 lots per quarter. “So for a couple of years in a luxury building can be sold about 25 apartments, and that’s fine,” says the realtor.

    It is also worth considering that there is a fairly large-scale projects, for which five years of sales, as they say, “no deadline”. For example, the complex RedSide (in the photo above, the developer – GC Insigma) entered the market in 2014. Several experts recorded this project in the list of outsiders. However, according to the Director for marketing GK Insigma Cyril Bortova, for the first 8 months of sales were sold 194 apartments, and in subsequent years until the commissioning in December 2017 sales dynamics remained at a high level. In the result, to date, sold more than 800 lots, and the sale was 149, which is about 15% of the total. Fast or slow – hard to say…

    Three major mistakes the developer

    Now, when we c you finally got confused in the pace of sales in the primary market, let us turn to the reasons for the low demand. According to experts, the three of them. The first is the error of pricing. If the mass market cost of square meter in separate locations more or less comparable, the elite class, developers are often charged a premium for exclusivity, and not always it is adequate to both the market and common sense.

    The average cost of luxury housing, according to Ilya Melgunova, varies from 500 thousand to 3.5 million rubles per square meter, and the budget purchases – from 25.2 million rubles to 1.7 billion rubles. If the project loses much of competitors on accessibility, the pace of sales will likely be lower than in neighboring complexes.

    Wealthy buyers – being is not only disturbing, but “the herd”

    The second error lies in the apartment description. Not always developers to successfully “cut” the lots, and selling huge apartment in overbudget. Sell them is difficult not only because of the cost: wealthy people in recent years are not looking for “squares” and prefer convenient and efficient layout. “It is apartments with large sizes often remain on sale even after entering the house in operation,” – says Irina Dobrokhotova.

    The third error that could affect the pace of sales, inflated positioning when, for example, in a residential area with a poor environment to build a business – or premium-class. The interiors from design guru and input group of the world stars of architecture, fine, but if the road to the pharmacy, you can Rob, then the buyer will prefer to look for another option. Naturally, such objects are sold worse than the competitors, built in the “right place”. Wealthy buyers – being is not only alarming, but a “herd”.

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    Buildings at risk

    The experts also called projects that entered the market in the last 3-4 years, which, in their opinion, have a chance to stay long in the price lists of realtors and developers. Since “subscribe” by his words the interlocutors were not ready, the editors left in this group, only those systems that are called several experts.

    Most doubt realtors calls the project “Tsarev garden” at the Sofia embankment (in the photo below, the developer and construction company “Sberbank Capital, LLC”, 68 apartments). The history of the development of this site was long and complex, the investor and the project itself has been changed several times, but after the arrival of the “Sberbank Capital” complex quickly build, sales started already at an advanced stage and are now conducted behind closed doors. But experts doubt that lots will quickly be able to sell. The reason is too high prices, even given the respectable location. “Although the complex and is located next to the Kremlin, of direct him there, under the Windows of the high bridge, which often leads to congestion. And weighted average price “square” – 1.6 million rubles,” – explained the General Director of one of capital agencies of real estate.

    Another project risk – “Club house, Kosmodamianskaya” at 22 apartments. Sales started in November 2016, but in the complex, according to respondents portal “Elite.ru” experts, has not sold a single lot. To clarify this information from Kalinka, who is a broker of this project, failed. According to outside experts, the reason of lack of consumer interest – bad planning and outdated for the segment concept.

    Among potential outsiders experts called LCD “Patron” on Yakimanka (in the photo below, the developer – LLC “Torgprodservis”, Bolshaya Ordynka street 8, p. 1-4). This luxury complex scheduled 24 apartments, 9 townhouses and 3 two-storey villas. The history of “Patron” is not easy, it is closely connected with the restoration project Kadashevskaya Sloboda and public protests. The construction of the complex began in the summer of 2015, but then was stopped several times, and the deadlines extended. Sales opened in the third quarter of 2018, but for now, according to realtors, any transaction is not concluded.

    Confirm or deny this information failed, the developer and two real estate companies – Kalinka Real Estate Consulting Group and Blackwood, which is listed as the brokers of the village, declined to comment. The concerns of consumers can understand. In particular, to call and write the developer cannot, on the official website of the project don’t have his phone or email, you can only request a call back, and that project documentation is updated rarely.

    By way of example, and the “House of Bread” (in the photo below, the developer – VTB group, 16 lots), sales of which started in the fall of 2016. It can be estimated that in nearly three years in the complex sold six apartments, as now, according to Knight Frank, buyers are offered ten objects with finishing from the Builder. The reason for the slow sales – not just the high price (from 150 to 620 million rubles for the lot), but in the absence of underground Parking. However, this is a common problem in renovation projects.

    Among the complexes, which sales are conducted slowly enough, the experts identified two projects: apartment complex of business-class Apartments Tatlin and premium RED7, although, from the point of view of the publisher, to record both projects at risk prematurely. Tatlin Apartments being built at the address: street bakuninsky, the house 5 (developed by Vesta Development planned 130 lots). Sales started in may last year, and by early June the complex had sold only 8 apartments (6% of the total).

    Complex RED7 (the developer – GK “the Basis”, scheduled 83 lots) entered the market only in autumn 2018. Among the disadvantages of the project interlocutors “Elite.ru” called “is not the best plan with a very “deep” rooms.” However, the developer the rate of sales was quite happy. “The project is designed for 4 years, the apartments will be sold in accordance with our financial model. We have no need or desire to sell at the start of the implementation of more than laid down in the schedule”, – said the commercial Director GK “the Basis” Igor Shipenkov.

    Life on a construction site

    What is threatening the buyers in buying an apartment or townhouse in a complex with a low rate of sales? First, there is a risk of extending the construction time, but it primarily refers to the projects of small developers. The second problem is the protracted repairs in apartments of neighbours. If, after commissioning the majority of apartments are not sold out, says CEO of the Academy “Bon Ton” Natalia Kuznetsova, the first tenants will have many years to put up with the repairs in the neighboring apartments. And the dust, dirt and, in principle, the life of a construction worker is hardly something to dream about, the buyers of elite apartments.

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