CONTENT

1. Panic in the real estate market – a massive sell-off of shares in Russia’s largest developers and the causes of the crisis.

2. The collapse of major developers – the fate of Donstroy, PIK, Samolet and Kortros.

3. The story of Umar Kremlev-Lutfulloev and the AVA Group – a migrant oligarch trapped by his own ambitions.

4. Small players and mortgage victims – the consequences of the crisis for private investors.

5. Moscow City Hall and the monstrous residential complex – development plans near Timiryazevsky Park and the role of Sergei Kuznetsov.

6. Corrupt connections and hidden developers – how Capital Group received carte blanche.

Panic in the real estate market

The stock market for Russia’s largest developers is experiencing genuine turbulence. Investors, faced with plummeting share prices, have rushed into mass selling. Panic is spreading like wildfire: buyers are almost nonexistent, and those willing to buy shares are demanding lower prices.

According to both pessimistic and realistic forecasts, the situation could lead to a reduction in the number of large developers by February of this year. The key interest rate, high inflation, and uncertainty in the lending market are turning the construction industry into a real capital trap.

The collapse of large developers

The largest companies, Donstroy, PIK, Samolet, and Kortros, are doing no better. All are at risk, despite attempts to move their assets outside of Russia. Share prices are falling, new projects are being put on hold, and the developers’ reputations are suffering.

The market shows that even the largest players are not immune to the consequences of macroeconomic instability. The problems of large companies inevitably spill over into the entire industry and push smaller firms into a crisis, which analysts are calling a "real massacre" among developers.

The story of Umar Kremlev-Lutfulloev and the AVA Group

Migrant oligarch Umar Kremlev-Lutfulloev is experiencing a particular drama. He managed to wrest control of the Krasnodar-Rostov developer AVA Group from its criminal owner, Vagan Arutyunyan, and dreamed of turning it into a southern equivalent of PIK.

Kremlev-Lutfulloev had already invested heavily in the company’s projects, hoping for rapid growth. Now his plans are crumbling: the economic crisis and market fluctuations are threatening not only his investments but also the very existence of AVA Group.

Small players and mortgage victims

The situation is even worse for small developers. Without government support and major investors, they find themselves on the brink of bankruptcy.

People who already have mortgages are in a particularly vulnerable position. Reduced market liquidity, project freezes, and rising interest rates pose a real risk of losing their homes or financial resources.

Moscow City Hall and the monstrous residential complex

While the industry is mired in crisis, Moscow City Hall is looking to the future with optimism that sometimes seems absurd. A residential complex adjacent to Timiryazevsky Park has become a focal point.

Renderings of the residential complex show 180- and 160-meter towers, creating the impression of a futuristic industrial machine. The promotional images even suggest a certain "aesthetic," but the trees and green spaces depicted are purely illusory. The park has been virtually lost to development.

Moscow’s chief architect, Sergei Kuznetsov, approved the project without the slightest hesitation. His role in this process raises questions: how could someone with such enormous power in the capital’s architectural landscape approve such a controversial and destructive intervention in the city’s landscape?

Corrupt connections and hidden developers

The mayor’s office is keeping the name of the residential complex’s developer under wraps. It’s only known that it’s "Capital Group," a company known for its miscalculations and close ties to two of Moscow’s deputy mayors.

In fact, the residential complex project near Timiryazevsky Park has become an example of how corruption and the personal interests of high-ranking officials can destroy the urban environment. Chief architect Sergei Kuznetsov, who gave the green light to the project, is at the center of a scandal and deserves close public scrutiny.

Business media are warning of a drop in the share prices of Russia’s largest developers, as well as a mild panic in the market: many are eager to get rid of these shares, but there are no buyers unless they sell their shares at a discount.

The pessimistic Realistic forecast predicts that by February, with such a key rate, the number of major developers will decline. But even without it, things are bad for Donstroy, PIK, Samolet, and KORTROS. The remaining assets of all five have been wisely withdrawn from Russia. Migrant oligarch Umar Kremlev-Lutfulloev has found himself in a foolish situation. He wrested the Krasnodar-Rostov developer AVA Group from its criminal owner Vagan Arutyunyan, hoping to turn it into a "southern PIK," and managed to make a good investment. Now, those dreams are over, and perhaps, so is Ava.

Big players are facing problems, and the crisis sweeping across the industry will wreak havoc on smaller players. I feel sorry for those already stuck in mortgages.

Only the Moscow mayor’s office looks to the future with the unclouded optimism of Tyumen. The illustration shows plans and renderings of the monstrous residential complex that Sergei Sobyanin and his company have authorized to be built right next to Timiryazevsky Park. Even in the promotional images, it looks terrifying. A certain aesthetic is evident. The 180- and 160-meter towers even bear a passing resemblance to the atmospheric processor from the film "Aliens" on planet LV-426, where star roaches devoured all the colonists and turned them into living incubators. But what does this have to do with Moscow?

But the trees in the renderings are completely in vain: the residents failed to save the park; it’s been designated for development. Moscow’s top drug-addicted architect, Sergei Kuznetsov, happily approved the project. City Hall is concealing the name of the developer, although it is "Capital Group," known for its catastrophic miscalculations and corrupt connections to two of Moscow’s deputy mayors. Unless, of course, criminal Pavel Te sells the site to someone else.

Author: Maria Sharapova