No more than 10 major players will remain on the market

Pavel Tyo first told about the Capital Group strategy under his leadership, the cooperation with the Moscow Municipality, and stories the tabloids make up about him.
Capital Group, company of Pavel Tyo, Vladislav Doronin and Edward Berman, can be called unique for the Russian business. Contrary to all the developer - one of the founders of the business center "Moscow City" managed to over 20 years to maintain a stable shareholder.

And just last year, market participants started talking about the section between business partners, and leaving the Capital Group Doronin. However, the company continues to deny it. Nevertheless, Cho, who succeeded this year Doronin as chairman of the board of directors, reluctant to talk about the relationship between the partners, and the last group, preferring to discuss current and future projects of the company. Businessman has become almost the main buyer of the Moscow government assets.

House- "book" on Novy Arbat, a network of "Capital drugstores" complex in Sofia Embankment - all of it was acquired by its companies in the city over the past two years. In his first major interview with Cho told "Vedomosti" about the relationship with the Metropolitan Municipality, the responses to the crisis and with regard to the rumors about him and his company.

- Capital Group has been in existence for over 20 years. During all this time, none of the co-owners of the company, including you, do not give any full interview. Why is such a non-public? The company is large, a large number of projects, probably a lot of unverified information, which periodically appear in the media, and often requires clarification not only on the company itself, but also the owners. Why did you decide to give an interview now?

- We really have long been a non-public, which did not prevent us to become one of the market leaders. Now the company is developing rapidly, the scale of business has become completely different. Accordingly, there are many "interpretations" of our activities. So I'll tell you better about our business - and tell you the way I understand it, rather than us write nonsense.

- Not so long ago the company announced that you are headed Sapital Group Board of Directors instead of Vladislav Doronin. As far as we know, you run a company for over a year. Why announce it now?

- The question of the relationship of shareholders - the shareholders deal. So it was all the previous years, this will continue. I would not like to comment on the views of my partners and plans for the future. I'd rather tell you about their plans.

The proud Capital Group

The multifunctional complex "Capital City" (288 000 sq m.) - The first draft of Capital Group in the business center "Moscow City". The height of one of the towers ( "Moscow") - more than 300 m, so the building is among the ten highest sites in Europe. Tower "Oko" (about 400 000 sq m.) - The second of a multifunctional complex in the "Moscow City".

Partner developer on this project acts businessman Gabriel Yushvaev, which provided the company about $ 300 million for the construction of the complex. The residential complex "Face" (. 180 000 sq m) on the Khodynka Capital Group has positioned as "the first house of the future": it is planned to use the system of recognition of arriving vehicles, "virtual" concierge, elevators with voice control and entertainment content.

- And yet you want to understand what is happening in the company. There is information that between the shareholders of the company, in fact, there was a business section. It is so or not?

- No. Company has been no change in the composition of shareholders. But views on what is happening in the country, we parted.

- I'll ask differently. The announcement of the company said that the priority projects for it are now including objects in Sofia and Krasnopresnenskaya embankments. As far as I remember, before your representatives were told that this is only your projects. And now it turns out that they are included in the Capital Group? How so?

- This is my personal projects as part of Capital Group, I would say. In 2014, when Russia was under sanctions, each of us has formed its view on investment in Russia. All new projects that the company has launched since 2014 - my personal projects.

- That is your partners do not participate in them?

- Do not participate.

- But does not this mean the business section with the other co-owners of the company?

- You are my one and ask the same question for the third time from different angles. I have already answered it.

Sapital Group
Officers: Vladislav Doronin, Paul Cho and Edward Berman.
Revenues (2015, personal data) - 35 billion rubles.
Founded in 1993, the first project - the purchase and reconstruction of buildings on Ozerkovskaya embankment, which leased the Moscow branch of IBM. The company's portfolio of 7.8 million square meters. meters of real estate.


- What is today is Capital Group, which in her portfolio?

- Total portfolio - 7.8 million square meters. m, of which in the active phase of construction - 3.3 million sq. m.

- How many of them are in your personal projects?

- 1.1 million square meters. m. Of these, 800 thousand square meters. m - it's projects in the active phase: Sofia embankment Badaevsky plant, Krasnopresnenskaya embankment, "book" on Novy Arbat. At the final stage of elaboration of several projects, but as long as I thought of them will not talk.

- Capital Group and you, as her co-owner, probably today - one of the most active players in the real estate market. Remembering the experience of many developers in the past, and the current crisis, if you are afraid to enter into new projects?

- For me this is the third crisis in my business life (laughs). Every previous crisis - a certain amount of experience. Now I feel that we have there are very good opportunities for the acquisition of projects, as the overheated markets such interesting offers never appear. They exist only in times of crisis. In addition, it is in the power crisis encourages investment in the real sector, especially those who are willing to invest in important projects. Plus I have a clear strategy, which consists in three things - well-chosen location, proper funding and a team.

- In connection with the crisis that anything has changed in the company?

- The company has exchanged twenties, and to keep pace, you need an infusion of new blood. The reorganization of the company, which I'm doing now, I would compare with the reorganization of the army. What happens to her? It changes the concept. Previously, we sought to increase the number of soldiers, and now - to improve their quality. If reduced to three words - professionalism, agility and handling. The same principle works best western development companies - I recently ordered a study on their organizational structure. The essence is the same. I am proud of the people who work from the beginning of the formation of Capital Group, they constitute its backbone. But there is a rejuvenation of the company, I gather the young, mobile and professional team.

Paul Cho

Born in 1963 in Tashkent. He graduated from Beruni Tashkent Polytechnic Institute majoring in "Thermal power stations". 1985 - Heating energy engineer "Uzbekgidroproekta" 1989 - animalsya trading and distribution of products in the FMCG segment, 1994 - became co-owner of Capital Group, 2016 - in November led Sapital Group Board of Directors.

- You recently often involve partners in their projects. For example, in the projects "The Eye" and the complex at the site of the 4th flour mill involved former shareholder of "Wimm-Bill-Dann" Gabriel Yushvaev. Why do you have partners?

- Having survived the crisis of 2008 and resolve problems with creditors, I realized that for our business credit - is evil. I think that lending rates in the 14-16% that are currently offered by banks, not allow our business to fully operate. Previously it was? The developer selected the site, took out a bank loan, the project built and painted themselves some cash flow from the project. With this algorithm, if, God forbid, contingency and timing of the project will stretch your plan collapsed. You're in bondage to the bank. I walked away from this scheme, I find it easier and more intuitive, if I take the project a financial partner. Partners invest, counting on my experience and that of my team. I also put my money to partner felt confident. I believe that it is fair when we are partners together carry a fair risk and earn profit together. This scheme is funded, I now virtually all of their recent projects.

- You said that the loans - evil. And how big a credit load of Capital Group?

- In view of our volumes, we are one of the most nezakreditovannyh. Now it is about $ 100 million My policy -. Over time, reduce the loan to zero. All of our new acquisitions - private money and investment partners.

- So your goal is to have no loans?

- Yes.

- And other sources of funding are not considering? Here is a group of PIK and O1 Properties recently placed bond issues. Some companies, for example, consider the possibility to hold IPO «Aircraft development".

- The construction market in all these complicated financing schemes have already passed. If you take all these sources of funding, it still boils down to, let's say, a rate of 14-16% per annum. And it is, I repeat, does not work. You bear the social burden, to build apartments, a pre-start to sell them, you have a responsibility to receive people who purchased them. Thus, on the one hand, you are dependent on a heap of any unforeseen circumstances, and on the other - these obligations: even from banks, even from loans. And that financial strategy, which I now stick as the main - to attract partners - has limitless potential. The margin of safety that it provides is endless, I can long as he wants to be at zero. This means that even with zero cash flow you can build whatever you like for a long time and does not depend on this income - unlike other developers, who are working under the old scheme.

- What financial indicators do you expect this year? In the past year, your revenues amounted to 35 billion rubles. This year, you expect some revenue - similar, below the above?

- Too early to speak. A year had not yet ended.

- One month stay. I think you are perfectly own numbers and understand what you expect from the situation this year. I'm not asking to disclose absolute figures, I want to understand whether the developer - in this case your company - expected growth during the crisis?

- Growth is not always measured by these figures. There are many other indicators, such as percentage of cultivated areas. In Moscow, the total amount of the agreed meters for commercial construction really mastered only 20%. And I have this figure is close to 100%.

- Another problem any developer in crisis - declining demand. Are not you afraid that everything that the company has acquired or will acquire now, simply will not be able to sell?

- In our life everything is cyclical, including crises. After every recession begins ascent. Today, statistics indicate that the recession continues, and I see that the business is looking to the future more optimistically. As for my investment, I choose only those sites for which demand will always be. But again, when my scheme of financing, I do not feel today, depending on demand.

"Capital drugstores"

- If you go back to your most recent acquisitions. Can you tell us about the strategy for the "Capital drugstores"? As I understand it, there's still not all the rooms are well suited for retail. Will some diversification of the business? That is something that can be sold as a separate premise, something used by retail, something else for some functions. I want to understand what will happen to the asset as a whole?

- (Laughs.) We immediately see that you specialize in real estate. You have answered your own question. This is not a quick project and not quickly broken-off investment. We are working.

- At least pharmacy function preserved?

- Of course, continue.

- Are there any plans for this function in some way to separate? And again, you do manage this asset? I mean this is not real estate, namely the pharmacy component.

- I do not exclude any option, it's a business.

- What do you think, why professional players of the pharmaceutical business did not participate in the auction? For them, it was not very profitable, or they simply do not understand how you can use the asset in a different format?

- As far as I know, the pharmacy chains do not like to buy space in the property. They feel more comfortable as tenants. And here is a very significant amount of the transaction. Also in this issue in addition to the knowledge in the pharmacy business is necessary to understand and in retail and real estate development. For me it is obvious that while preserving the functions of pharmacy pharmacy area of ​​500 square meters. m is excessive. So, somewhere in the pharmacy have to marry with retail.

- You said that the return on this investment will not be quick. Counted at least roughly, how much it can make and in what time frame?

- The starting date investment return no sooner than 10 years.

Projects without risks

- You are now two sites on Golden Island. You probably remember that the program "Golden Island", which originally dealt with CRT [JSC "Development Corporation of the territories"], assumed the renovation of a much larger area in the Swamp Island. I have heard that some time ago was considered an opportunity to revive this program ...

- Each of the developers on the Gold island makes its own project. We in this project two problems. The first - restoration and reconstruction, where in addition to the restoration of existing, we will fully recreate the lost historical monuments. The second task - to correctly enter a new project into the surrounding historical buildings. That is our responsibility to the city, we are well aware of the significance of the Golden Island for Moscow.

- You are certainly aware that the proceedings on the site on the Sofia quay, which you bought from the government of Moscow, is still ongoing. You do not see risks here for yourself?

- This does not apply to us.

- But you know what the problem is?

- I know the history of this area, but at the moment it is legal to us has nothing to do.

- Clear. Will you participate, if it announced the auction for the second "book" on Novy Arbat? Or are you the one missing?

- For a good developer is important not only the space, but also its surroundings. What made the city program "My Street" with the New Arbat is definitely a huge plus for our project. But it is quite obvious that you need to put in order all the Arbat, and not just individual buildings.

- And in the auction, it will participate or not?

- It is possible. I am one of the first who is interested to New Arbat took a finished look.

- Some time ago there was information that the apartments in that tower on Novy Arbat, that you have purchased may redeem AHML. This corresponds to reality? At what stage negotiations are now and what percentage of apartments in question?

- Yes, indeed, we have been negotiating with AHML, but the city today can not see there is rental housing. Therefore, we will reconstruct the building into a hotel. According to our latest estimates, in the Arbat "books" reconstruction investments will amount to 6 billion rubles. Works are already active, our goal is to finish it by 2018, the World Cup (World Cup) Football.

- It's your first project in the hotel sector?

- Running there, but the hotel is provided in our project on the Sofia embankment. We are now at the stage of signing an agreement with a network of Mandarin Oriental, which will manage the project.

- And what about the Four Seasons? After all, the previous owner negotiated with this statement?

- We are Four Seasons negotiations are not conducted. I believe that Mandarin Oriental is more suitable for the project in luxury-segment.

- You said that the draft on Novy Arbat, the city authorities see for the most part of the hotel option rather than rental housing. But after the World Cup in any case for any businessman, for every investor - this is evident from the projects in Sochi, for example - there is a question as to recoup the project more quickly. Hospitality kind. Payback from developers in this segment is much higher than others, especially in residential. And the apartment on Novy Arbat, probably, would demand much more than a hotel.

- I can not agree with you. This location is ideal for a hotel project: the Kremlin 10 minutes on foot, the infrastructure, the place itself is a landmark. I'm sure that there will be a very successful hotel.

- One of the tenants of the tower on New Arbat Street, as written media, tried in the Moscow Arbitration Court to challenge the auction results. Again: do not see the risks for themselves?

- Firstly, he pleaded no longer with us, and the city that he was allegedly infringed rights. As far as I know, he has lost another court. Yes, there were some problems with the settlement of disputes with other owners, but it is behind us. Conflict issues there is currently no.

- Project on Krasnopresnenskaya embankment, on the territory of the tennis club "Sportvenchur". Initially, he states as a joint Capital Group and SC "sign", but the company's change of ownership. Who is your partner in this project?

- I'm not here partners. The project is 100% mine.

- That is Vladimir Kogan in the project is not involved?

- No. We bought a stake in the project is still at the previous owners. Today I am the only shareholder owning this project.

- Whether the information is correct, that the Capital Group building area planned Timiryazev Academy?

- Complete nonsense. Perhaps this is an interesting area, but we did not even consider it.

We are back to the question of why I give an interview - too much to write.

- You mean your "relationship" with his grandfather, Hassan and shooting animals from the Red Book?

- And not only. This is blackmail, "Retting" [media] resources. Here's an example: every time there is information that I invested kuda-to skolko-to billion or bought the site, be sure the next day published an article in which the site on the Sofia, which is three times the city put up for auction and nobody wanted buy "got criminal businessman Paul Cho through corrupt relations." They keep track of the transaction, look, those who have money, and urinate in the hope that I would pay to remove these publications, or to place the block. The whole business has already been formed, and prices are known. This not only concerns me - see what they write about other business. This is pure extortion. They must deal with the police and the judge do not slander, and in the article "extortion." Generally I do not be surprised if after this interview will appear next portion.

- Historically, that your company implements projects either in the premium segment or business class. But now you have at least two projects, which are different from the rest of the portfolio. It complexes Rumyantsev and Mitin. Why the company decided to try his hand at a more economical segment? This kind of diversification of business? Trying to reduce the risks of projects in the premium segment in connection with the crisis?

- Yes, this is our response to the crisis, but not the one that you think. This is our response to the crisis of 2008, the analysis of which showed that consumers in the deteriorating economic conditions do not disappear, and the flow from segment to segment. When the budget is a potential customer of the premium segment is compressed, it gradually becomes a business class, but the business goes into comfort. Even then it was clear that, if a company wants to be sustainable, need to be strengthened in all segments. Then I laid both projects. It was 2009.

- Your presence in the economy segment can increase or you are only limited by the two projects?

- It will depend on the economic situation. We are mobile and quick decisions.

- Well, you can evaluate the impact of such projects? Are you satisfied with the results of sales in the same Mitin?

- For such projects to be successful, the developer is important to understand that for all segments (whether it's premium or comfort) are the same laws. Both are equally important location, quality of construction and proper infrastructure. We in this project all the research, determine a fair price and, as a result, Mitino is now in the top three sales. By the way, our new project in Rumyantsev shows a similar trend.

- So this segment today the most demanded? I ask the same question, because I want to get a more precise answer. Is it possible your presence in this segment in a more extended version?

- We will develop all segments, although I, of course, primarily interested in complex projects.

- Why is a priority for the company's projects have not entered the territory of the complex is not the 4th flour mill? It will be implemented?

- This project is being actively implemented, now there is solid work carried out. This will be a complex of residential skyscrapers in the area of ​​"Big City" with its own infrastructure. Soon it will be seen, and in six months we will reach the level of 10-15-th floor.

- The "Eye" and the project on the territory of the 4th flour mill. You're driving them, including in partnership with Gabriel Yushvaevym. Do you have more projects with him?

- Currently unavailable.

- But are discussed?

- For me the basis of partnership - compliance with the agreements, and it does not matter, written or oral. It is always important, but it is doubly important in long-term projects. Gavriil Abramovich in these two projects has demonstrated that he is a man of speech and all our agreements performs. I would be happy to see him as a partner in their new projects.

- The company's report also said that you are planning jointly with IG "Absolute" to develop the project in Badaevsky plant.

- Yes, it's another one of our iconic sites, no less important than the Sofia embankment. The area around the hotel "Ukraine", Kutuzovsky Prospekt historically been one of the most prestigious areas of Moscow and is always in demand. At the same time here a little new development, the proposal on Kutuzov virtually nonexistent. And we have - Kutuzov, the Taras Shevchenko embankment, river, view of the "Moscow City". Plus a unique architectural design solution, which is a very interesting historical part, which must be properly recovered.

Dialogue with the government

- You say that the crisis - a good time to acquire high-quality assets, but all the big projects you over the past two years, acquired from the Moscow government, which is in contrast to the commercial structures are not always ready to sell cheap. On the same site on the Sofia quay, which the city was trying to sell about 10 billion rubles., Wishing there was ...

- This is a unique project, the second of the Sofia embankment will not be.

- And how much more complex and it became easier to work with the current government of Moscow? Did they change once the terms projects coordination? Many developers complain that they do not always work to prepare all documents for the projects. And, according to our information, some have even been forced to sell their projects. A striking example - Company "A101 development".

- Dialogue with the government - an important part of any investor. In this guide, all radically changed. In business today there is direct contact with the city, understanding and well thought-out a clear policy on the part of the authorities, that is clear to all investors. Let me explain with an example of the Club of investors, which includes all the biggest developers. We are about 20-25, and together we are building a more than two-thirds of all commercial traffic in Moscow. If you look at the statistics, as the Moscow authorities who agreed meters, you will not see the preferences in favor of one or another developer. To date, all of the power provided an opportunity to develop their business. No deprived.

And that example, you are talking about ... I do not know all the circumstances, but if you look wider, so much in such matters depends on the experience, knowledge and understanding of the situation, the head of the company. This is not only and not so much the ability to negotiate, and above all the ability to understand what you need in the city this place. And when you come to agree on your project, you do not say "I have to." You must first show that the city will receive from the project. Maybe this was a mistake and the heads of those companies. Or maybe it's natural selection. I'm 23 years on the development market and has experienced three crises, all of which radically changed the rules of the game. It is time for each of a test of strength. You as well as I do, remember that not all survive until the end of the next crisis.

Now we are witnesses of market consolidation. My prediction - will remain no more than 10 major players in the market. Those who do not have the onerous financial obligations and have the technology and highly efficient team that is constantly looking for new solutions that will allow them to be competitive. After all, the civilized market, the tougher competition, lower margins, tougher struggle for the client. The more high-quality product you should give, regardless of segment. You know what makes me happy? Russian real estate market is rapidly evolving, we quickly grasp the best experience, digest it quickly on the way by adding something new from him. And our designs are obtained not only at the level of, and often better, than western. Look at the new building, for example, in Paris or Barcelona - is still unknown, someone who learned how to build.

- The Government of Moscow Capital Group Buying from large areas in the tower "Eye" - is also part of the relationship with the city? You bought their projects, they have taken in response to your area ...

- Want to ask me if I have any special relationship with the city?

- Including.

- I believe that the special relationship - a degree of trust. It does not matter, with the authority you work for, or with partners. If you just fulfilled all its obligations, and then again and again, then for you there is a special relationship and trust.

Favorite interesting, right

- In your opinion, were at the Capital Group unsuccessful projects?

- Unfortunate it was not. Were not fully thought-out projects, and they have not brought the result that we expected. But at the same time (maybe it's a philosophical question) each unsuccessful project - a step to the next, successful.

- A favorite design can be called?

- My family. My children.

- Excellent project. But still I would like to know what kind of business project for you is the flagship.

- I'm interested to build unique buildings. City skyscrapers - is mine. To build such houses - it works. The dispute with the architect, what would be the facade, which is design. Creating a high-tech product, you go with the times, and sometimes even ahead of him. It is therefore not surprise you if I say that today is my favorite project - Capital Towers, three new skyscraper on Krasnopresnenskaya Embankment. With over City experience, I realized a major problem for those who live there - he is not fit for family life. Skyscraper life should be close to the park, not in vain the most expensive apartments in Manhattan close to Central Park, and in London - on the border of Hyde Park.

All the experience that I have accumulated over the years, all the best and most advanced technology in the construction that exist in the world, I will apply there. I build it for yourself as well. I myself will live there with his family.

- Now, where do you live?

- On colored avenue in the house, which was built by our company, - "Legend of Tsvetnoy".

- Returning to the city. Is this project urban planning mistake, once said Sergei Sobyanin?

- Just look at what is taking the city for further development of the "Moscow City". This is the answer to your question.

- In this city, in the opinion of many market participants - the victim is a project during the crisis. Here the highest vacancy rate.

- The idea of ​​concentrating the entire business in one place is certainly correct. So developing business centers in all of the financial capitals of the world. But the peculiarity of the development cycle is that it lasts for at least three years, and if you build a skyscraper, then seven. For seven years, you can have time to catch the two crises. But the concept is correct. If you do not draw in loans, we can safely build in the city, these objects will be liquid and will always bring a stable income.

- As far as I can remember, "Oko" tower some time ago just stood empty, although the facility was almost completed ...

- This is not true. I believe that our projects - the most successful in the city. Because we originally placed them correctly, designed, shared residential and commercial towers and properly lit flows. Because of this, our tenants and residents of the apartments feel much better than in the rest of the city buildings. Plus, competent management, of course. And because of this, although we have experienced with the creation of our first skyscraper "Capital City" is already two crises, we have almost no outflow of tenants.

As for "Oka", the business center there is no day did not stand empty. You know that as soon as we have handed him one and a half years ago, the city once occupied 50% of office space. And it is not only important for me as a big deal in a difficult economic period. It is my firm belief that the move to City Hall City - absolutely the right decision, which will give an additional impetus to the development of the business center. This immediately raises the status of all "Moscow City", definitely.

- Now one of the priority projects of the city is the development of TPU. Is considering whether to participate themselves in this kind of projects?

- We consider any development and respond to emerging opportunities. And retail, and "non-residential", and the development of commercial real estate through the TPU. Every day we otsmatrivat new sites. If they fit into our scheme, paragraph 1 - "location", it is possible that we pouchastvuem in some city competition in the construction of the TPU.

- Can you tell us about your hobbies?

- Hobbies I have two. First - hunting, but I would not want to talk about it so as not to give rise to speculation. Second - it's cooking. I love to cook, and almost every day I prepare dinner for their large family. And for friends.

- Are you involved in the business of his wife? (Cho's wife Olga Karput - owner of the boutique designer clothes "Kuznetsky Most, 20")

- No, it's her own project. She has been in this business for seven years and this year became one of the 500 most influential people in the world of the fashion world. For my part, I can not boast this level of recognition.