Setl Group bought the largest plot in St. Petersburg

Setl Group has closed one of the largest transactions on the Russian land market. The developer acquired more than 900 hectares in the northern part of St. Petersburg from Nordest Group of Companies, where it is possible to build approximately 4 million sq. m. m of real estate. This site was originally intended for agricultural purposes, but the developer managed to obtain permission from the city authorities to build housing there. The deal may be non-cash and involve the seller receiving a 10–15% share in the project, experts believe.

Setl Group acquired 933 hectares in St. Petersburg in the Kamenka region, north of the Yuntolovsky forest park, two sources in the real estate market told Kommersant. This information is confirmed by Rosreestr data, according to which the developer owns at least 800 hectares in this location.

Now the territory in Kamenka has agricultural status, but in September the government of St. Petersburg approved its development with housing.

The Setl Group confirmed to Kommersant that they have replenished the land bank for the future, and the specific parameters of the project will be clear after changes are made to the general plan. Nordest, whose co-owners are Anna Persianova and Yuri Chichoyan, did not respond to Kommersant’s request.

The Setl Group deal is one of the largest in the Russian land market over the past few years, notes Rusland SP partner Dmitry Lekhmus. Most likely, it was penniless and assumes that the seller will receive 10–15% in the project, says development expert Andrei Veresov. In this case, Nordest’s cash flow, taking into account the annual increase in the cost of housing on the primary market, could amount to more than $1 billion, he calculated. According to the expert, 4 million square meters can be built on the site. m of comfort class housing, which may take 20–25 years. Investments in the project could amount to 300–350 billion rubles, estimates Mr. Lekhmus.

In the north of the city, within the Ring Road (KAD), this is the only building site of this size, Mr. Veresov emphasizes. The deal will allow Setl Group to form a land portfolio for the long term in the absence of competition in this location, the expert clarifies. But to accelerate the pace of development of this territory, it is logical to attract partners to the project, believes Dmitry Lekhmus. However, the territory inside the Ring Road is a very valuable asset, which the developer is unlikely to want to share with competitors, notes Anton Orlov, director of the department for land sales and development projects at Nikoliers.

The weighted average cost of apartments in Kamenka is 224 thousand rubles. per sq. m, which is 3% lower than in mass demand complexes within the borders of St. Petersburg, says Sergei Duvanov, project manager of the NF Group investment department in St. Petersburg.

According to him, the comprehensive development of the territory makes it possible for developers to improve their market positions and maintain minimum prices. The main risks in the project are related to the transport accessibility of the location, since Setl Group does not have the opportunity to influence the construction time of roads and metro, says Anton Ivanov, development director of the construction company Basis-SPb.

According to Nikoliers, developers rarely buy more than 100 hectares in St. Petersburg and the Leningrad region. They account for only 4% in the structure of all land transactions, while 57% occupy areas of less than 5 hectares.

The city reluctantly approves the transfer of land with other functions for housing, and there are practically no prepared large plots in the city, explains Anton Ivanov. In addition, he clarifies, only such large players as LSR, Setl Group, KVS, and several federal developers have the resources to develop them.

Konstantin Kurkin, St. Petersburg