Following a difficult 2008 and 2009 due to the global credit crisis, the Russian infrastructure construction market is positioned for a solid rebound in late 2010 and 2011. According to real estate news source PropertyWire, industry experts expect the Russian real estate market to recover in the near future from the precipitous drop in property values and rent rates. This market rise can be attributed to the country’s 3% GDP increase in 2010 as well as a global recovery from the 2008 economic crisis.
The Federal Fund for the Promotion of Housing Construction Development, hoping to end Russia’s attachment to high-rise housing, has also acquired 2.5 million acres of land (10 times the size of Moscow) to build family homes. “The investment in new infrastructure not only helps boost construction firms and the housing market, but Russia’s economy as a whole. Construction and developing industries could become one of the country’s main priorities and provide lots of employment opportunities,” said Dmitry Tsvetkov, director of Suburban Real Estate in the public construction department at Penny Lane Realty.
As for Russia’s road network, Dmitry Medvedev, President of the Russian Federation, signed a decree on July 27 ramping up state spending on road construction and repairs to 377 billion roubles ($12.5 billion) in 2011 in an attempt to overhaul the country’s decaying infrastructure. The costs are predicted to increase to 408 billion roubles ($13.5 billion) by 2013. The Russian road infrastructure constructed between the 1960s and 1980s was originally intended to hold fewer cars than the number presently commuting on these roads, causing high traffic volumes and greater risk of accidents and injuries.
UNR Holdings, Inc. (OTCBB:UNRH), a Russian construction service company, recently commissioned RedChip Companies, Inc. to act as its investor relations representative. After thorough research of the Russian infrastructure construction market, RedChip believes this company has strong growth potential in its industry. UNR is a diverse construction company specializing in general and government infrastructure construction projects, commercial housing projects, construction for major commercial oil and gas corporations, and designing and building multi-family apartment complexes and office buildings. Most of its projects are centered around Moscow. UNR is one of the oldest and most profitable companies in Moscow, with over 40 years of experience in the construction, development, and infrastructure market.
The company has a 68% ownership in its subsidiary, 494 UNR. In the last five years, 494 UNR has reconstructed more than 100 km of federal highways, not counting local and rural roads. Among the units reconstructed by 494 UNR road builders are roads on the highways of Moscow-Minsk, Moscow-Chelyabinsk, Moscow-St Petersburg, Moscow-Nizniy-Novgorod and others. RedChip recommends that investors keep their eyes on this growth company, as it is on the high road to even greater visibility.
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Disclosure: UNRH is a client of RedChip.