Swedish housing developer Bonava makes third attempt to exit Russia

Swedish housing developer Bonava, whose Russian business is concentrated in St. Petersburg, is making a third attempt to exit Russia. After the failure of transactions with the Kazan G-Group and the St. Petersburg RBI group, Bonava announced the sale of assets in the Russian Federation to the Armenian Star Development for €50 million. But, as Kommersant found out, the buyer represents the interests of one of the large developers – GC FSK Vladimir Voronin. The new owner is acquiring the business at an inflated price, experts say, but they attribute this to the desire to form a land bank in St. Petersburg for several years to come.

On Wednesday, October 18, Bonava announced that it had signed an agreement to sell its business in Russia for €50 million (RUB 5.1 billion at the current exchange rate). The company’s message names the Armenian Star Development LLC as the buyer, which received approval from the government commission on foreign investment to conclude the deal. The parties expect to close the deal by the end of this year, after it is approved by the Federal Antimonopoly Service.

According to Kommersant’s sources, Star Development is associated with Vladimir Voronin’s FSK Group. A representative of the developer confirmed this information to Kommersant. According to him, FSK is interested in expanding the development business and the competencies of Bonava.

The Swedish developer owns 16 hectares in St. Petersburg, where about 230 thousand square meters can be built. m of housing. The company has been present on the Russian market since 2005 and initially operated under the NCC brand. Also engaged in development in Sweden, Finland, Germany and the Baltic countries.

The developer’s largest shareholder is the Swedish investment company Nordstjernan, which owns 24.5%. Bonava’s revenue in the first half of 2023 amounted to SEK 5.5 billion (RUB 48.7 billion), operating profit – SEK 167 million (RUB 1.4 billion).

This is the third attempt by the developer to leave the Russian market. Bonava announced the cessation of operations in the country back in March 2022 against the backdrop of the outbreak of Russian military operations in Ukraine. The first contender for his business was the Kazan G-Group, which planned to pay 5.9 billion rubles for the assets. (see “Kommersant” dated October 10, 2022). But the deal did not take place. At the end of May this year, the acquisition of Bonava assets for 3.3 billion rubles was announced. the St. Petersburg RBI group of Eduard Tiktinsky agreed (see “Kommersant” dated June 1). The deal agreement with RBI was also terminated as the group failed to clear the purchase with the Foreign Investment Commission, Bonava said. The RBI declined to comment.

In contrast to the agreement with the RBI, the amount named for the deal with the structure of the GC FSK looks overpriced, says development expert Andrey Veresov. In his opinion, conducting a transaction with the help of a foreign company may be associated with restrictions on the withdrawal of funds by Western companies.

In the last two years, Bonava has significantly reduced its business in Russia, so only their land was of interest, says Sergei Duvanov, project manager of the investment department of NF Group in St. Petersburg. However, for GC FSK this is a good deal, given the shortage of ready-made sites for development in St. Petersburg and the refusal of the city authorities to transfer the lion’s share of plots for housing in the new version of the general plan, says managing partner of Rusland SP Andrey Boykov. With its help, the expert emphasizes, the developer will be able to meet his needs for land plots for several years in advance.

Konstantin Kurkin, St. Petersburg