Scandalous developer Andrey Birzhin is trying to clean up his reputation

Glorax Development (part of the Glorax Group) has started construction of the Golden City LCD business class in the alluvial territories of the Vasilievsky Island in St. Petersburg. In order to prevent the buyers from suspecting anything, the reputation of the company is being actively promoted by the media.
A stream of sugary news about Andrei Birzhin poured into the Russian media. In the course are news agencies, regional publications and regular online media. The funny thing is that the molasses about the developer drives on a mutually advantageous basis even such an ambiguous edition of The Moscow Post, which in its time devoted a lot of articles to the history of the appearance of Mr. Birzhin on the development arena of Russia. And this, by the way, is quite an interesting phenomenon.

The future "king" of St. Petersburg (and not only) real estate entered the Moscow State University for a paid department of the economy with a degree in management in 1998, and in 2003 in the final year, he either takes an academic leave, or he is allegedly expelled (simultaneously talented The student works as the general director of a certain OOO Geostroydizayn). Okay, suppose, with the study did not work. What's next? The business genius tries to earn repair of apartments in Moscow suburbs - in the tiny town of Khotkovo (slightly more than 20 thousand people of the population) and Sergiev Posad. In general, the Sergiev Posad district of the Moscow region was obviously a real base for Birzhin and his activities. In a couple of years, the persistent young man manages to accumulate so much money that in 2007 he will receive a plot of land in Sergiev Posad, where he starts building an apartment house. And what if you assume that you have relatives in the administration of the Sergiev Posad District of the Moscow Region?

However, even after this case they did not move shakily or swathfully until at the end of 2009 Mr. Birzhin suddenly organized the development company Tekta Group. The partners are invited to co-owners of the Growth Bank Vladislav Mangutov, Alexei Abramov and Oleg Karchev. They managed to attract extended financing and the company rustled in the suburbs - sites were purchased, construction was in progress until a scandal broke out in 2012.

It turned out that with the financial discipline in the Tekta Group, the situation is quite bad: the construction cost has been shamelessly inflated, and incomprehensible expenses have lost as much as $ 20 million. As a result, in 2013, Mr. Birzhin and his younger partner, Dmitry Konovalov, left the company, giving their shares in debt repayment. But another life defeat did not undermine the position of the businessman. It was stated that Birzhin creates a private equity fund Glorax Capital on the basis of ... profitable sold 30% stake in Tekta Group, which will build housing in St. Petersburg and Moscow, as well as hotels in Italy, France, Turkey and a number of other countries! The size of the fund was modestly set at 1 billion dollars.

Where did Birzhin get such money - it's not clear. Tekta Group, even if we assume that the developer still "took out" from there any funds, was a company more than average. Every Russian developer is credited to the very nostrils and the net cash flow is relatively modest for large companies. Competitors dug the earth in search of compromising material, but nothing cleverer than blaming the refined "student" Birzhin in connection with the criminal community, did not come up. The same Moscow Post recalled the Orthodoxy's slight enthusiasm for Orthodoxy and the acquaintance with Georgy Poltavchenko, but this is still not enough to have in the end of 2016 in the northern capital of Russia a portfolio of projects with a total area of almost one million square meters (in fact, a little less) .

Among the largest projects Glorax Development (Glorax Development) in St. Petersburg - LCD business class Golden City in the alluvial territories of Vasilievsky Island and a residential comfort-class complex on Ligovsky Prospekt, 271. This area previously housed the sausage factory "Samson". Now Birzhin purchased this plot of land and will build on it up to 106 thousand square meters of housing, while investments in the project will be pulled by 5.5 billion rubles. Earlier, Glorax Development reported on the construction of the Ligovsky Avenue, 232 multifunctional complex with an area of 70,000 square meters worth 3.4 billion rubles. Under the housing it is allocated 40 000 square meters. That is, only two "ligovskih" projects of a talented developer with incomprehensible capital are pulled at 9 billion rubles (150 million dollars), at least.

Even more capital-intensive is the construction in the alluvial territories of the Vasilievsky Island. Here in the area of ​​15 hectares will be built 6 quarters of anthills with a total area of ​​450 thousand square meters! Investments in the project, according to Dmitry Konovalov, will be about 30 billion rubles (500 million dollars)! But this is not all projects and developer's "Wishlist".

In 2014, Glorax Development acquired the St. Petersburg company Baltprodcom together with a 20 hectare plot in the Krasnoselsky district of St. Petersburg, where the English Mile complex was built on 200,000 square meters on the Peterhof highway. In the middle of 2017, the first stage was put into operation, where almost all apartments were sold, and 472 apartments (two-thirds) remained unprotected in both buildings of the II stage of this residential complex. That is, one can not say that this acquisition gave a noticeable financial flow to the Glorax Group. And although most real estate experts consider the acquisition of someone else's "unfinished" risky, Birzhin obviously has a powerful administrative resource in St. Petersburg. This, at a certain stage, can help alleviate financial problems by properly lobbied bank loans. So last year the publication "Fontanka" with surprise reported that the company Birzhina managed to squeeze a rise in the height of the building on the soiled soils in the territory of Vaskilyevsky Island from 40 to 69 meters!

Russian officials, who clearly "cover" Birzhin's business, can work miracles. However, even they are not able to turn the Sun back, feed the unfortunate with five loaves and walk barefoot on the water. Therefore, it gradually turns out that the mega-plans of Andrey Birzhin come across a sad financial reality. So Glorax Development in 2015 received in the "inheritance" from the company "Chesma-Invest", which was discovered, two problem residential complexes with a total area of ​​53 thousand square meters. This LCD "Twin House" for 247 apartments, of which only 40% will go on sale, the rest will go to deceived co-investors (the complex will be ready in 2018), as well as the Main House LCD for 403 apartments. The term of its commissioning is 2019 (at best). In addition to these "assets", Andrei Birzhin received a load of the Sherlock House LCD, which had previously been unsuccessfully used since 2000 by the same Chesma-invest and PSM Classic. According to the Delovoy Peterburg newspaper, the total value of these three projects is at least 2.3 billion rubles, and the net loss from their sale is more than 300 million rubles. Not the fact that more.

The question arises: if the four large projects of the company in Sankt-Petersburg are pulling 40-45 billion rubles (taking into account the "English mile"), and the completion of the "alien" housing complexes in general is unprofitable, what does the company generate its cash flow? After all, it does not have ready large residential complexes, which are sold (except for the unfinished second stage of the English Mile)! At the same time, Birzhin's projects in St. Petersburg are only part of his activities. So in November 2015 it became known that Glorax Capital (the parent company Glorax Development) plans to build a residential complex of the economy class "Olympus" in Khotkovo (Sergiev Posad district of the Moscow region, 60 kilometers from the Moscow Ring Road) with a total area of ​​almost 60,000 square meters for 2 billion rubles. The construction was to begin in the past year, and finish - in late 2018. So far, only apartments of the first stage of the LCD are on sale, of which 141 apartments are unsold (slightly more than half). Given the fall in demand in the suburbs in the primary market, it is difficult to expect any other results. And in Moscow in 2016, developers could not realize almost half of the apartments built. With the overall market flotation of apartments, it is naive to hope for the consumer demand for panel chicken coops in an hour's drive from Moscow.

All this leads to sad thoughts that in the next few years Glorax Development can repeat the fate of many developers who have seized tidy plots of land and attracted financing for them, but never reached a sustainable development. In conditions of weak demand and falling incomes of the population, this all makes the situation even more difficult. Therefore, from Glorax Development ambitious Birzhin nothing good with such a "huge amount of plans" should not be expected. Here or "pants will tear" with the inevitable bankruptcy, or in general everything will remain at the stage of development of land plots, i.е. Long-term construction. At the same time, developers are not at all risked by developers who will transfer their pledges in the form of land plots to banks, and interest-holders who are tempted by the cost of apartments at the "pit". This should never be forgotten.