Gutenborg Project Contributes To Construction Sector Recovery
The announcement of a 780,000m² new residential development in Saint Petersburg reinforces our forecast for Russia's residential and non-residential construction industry of 5.5% real growth over 2013. Following a slump in homebuilding between 2008 and 2010, 2011 witnessed a relative surge in activity which was largely sustained through 2012. Strong house price performance in Russia's major cities suggests that demand will remain robust for the medium term, and developers will benefit from the country's inherent supply shortages.
This US$1bn-plus contract has been awarded to the British company Mace. Appointed as delivery partner by SPb Renovation, Mace is responsible for the project, design, cost, and construction management, in addition to technical supervision. The Gutenborg project will provide housing for 25.000 people and it will include 15,600 apartments, three schools, five kindergartners, a polyclinic and supporting roads, transport and utilities infrastructure.
Construction sector growth in Russia is driven by increased demand for housing and modernisation of existing infrastructure. In fact, this was the core of Mace's previous commission from SPb Renovation. In 2012, Mace assisted SPb Renovation with programme management procedures for 22 projects to modernise a significant proportion of St Petersburg's housing. As a result, previously neglected areas of the city were significantly transformed. The Gutenborg project constitutes a substantial opportunity for Mace to consolidate its presence in the Russian market and potentially expand further to the east.
|Stable Growth In The Horizon|
|Residential And Non-residential Building Industry Values Real Growth (%)|