Builders Skip Auction for Land Near Kosmicheskaya Station
The auction would have permitted buildings up to 30 stories, but developers did not submit bids.
Regional operator for Integrated Development of Territories (IDT) cited the reasons why developers did not submit bids for the auction for the sale of a plot near the future Kosmicheskaya station. The territory was planned to be sold at auction for 1 billion rubles (about $13.3 million at current rates).
As reported to NGS by the press service of the Agency for Housing Construction Development of Novosibirsk Oblast (ARZhS), no one submitted an application to participate in the auction. The auction was declared invalid. Such an outcome, ARZhS notes, occurred due to the worsening economic situation in the construction market not only in Novosibirsk Oblast but also in other regions.
“The current situation may be influenced by a combination of factors such as the increase in the key rate, a significant rise in the cost of construction materials, changes in banks’ approaches to financing development projects, and higher mortgage rates, which affect demand from buyers,” the press service noted.
ARZhS is a regional operator for IDT that coordinates the work of developers on a large developing territory. According to the Kontur.Focus service, ARZhS (JSC) is a government customer-developer and general contractor. The company’s general director is Ashot Rafayelyan. As of the end of 2024, ARZhS earned 1.9 million rubles (about $25,333 at current rates, 99% less than a year earlier). Net profit amounted to 33.7 million rubles (about $449,300 at current rates).
The operator is involved in the development of the Klyukvenny microdistrict, plans to develop the peninsula near Bugrinsky Bridge, and build Integrad between Akademgorodok and Koltsovo.
The operator, together with the regional Ministry of Construction and the city administration, is considering options for changing the terms of the auction for concluding an IDT agreement. Specialists plan to increase the attractiveness of participating in the auction for developers while ensuring a balance of interests between investors and the municipality.
This is not the first failed auction conducted by ARZhS. The operator had planned to find developers for the smart district Integrad between Akademgorodok and Koltsovo. According to NGS, developers and banks were wary of the idea of building a new microdistrict due to the difficulty of making a profit on the project. The operator has also failed to sell new sites in the Klyukvenny microdistrict.
