“Premium complexes take a long time to build due to the growing number of high-rise buildings”

Kommersant FM columnist Svetlana Bardina talks about how the construction of a residential complex is proceeding and why luxury real estate takes longer to build.

The construction of a residential complex can be divided into two cycles. The first is the design and execution of all necessary documentation. In most cases, this development cycle takes about two years. The second stage of the project is its construction, from the moment the equipment is assembled on the site and the start of excavation work to the commissioning of the facility takes an average of two more years. Today, almost 1.4 thousand buildings in more than 400 residential and apart-complexes are being sold on the primary capital market. The commissioning period for these houses varies from 1 to 137 months. At the same time, the average construction period for residential projects in the capital is 33 months, according to experts from the Metrium company.

In terms of segments, the situation is as follows: the average construction period for mass new buildings is 28 months, for business-class houses it takes 36 months, the construction and finishing of premium and luxury premium-class houses takes an average of 41-42 months.

The high duration of construction of luxury projects is largely due to the lack of qualified personnel ready to work in this segment. Modern premium complexes mostly take a long time to build due to the growing number of high-rise buildings. They are characterized by an increased level of complexity and duration of installation work. An important factor influencing the pace of project development is financing, brokers note. After the industry switched to project financing, the number of long-term construction projects whose developers do not properly fulfill their obligations to shareholders has significantly decreased.