TMM to launch new projects with zero outside funding

TMM Real Estate CEO Mykola Tolmachov said in a press release today that the company intends to build new residential projects relying solely on its internal funds without outside financing (via Interfax). According to Tolmachov, TMM is planning to collect an indication of interest from potential buyers and if sufficient demand is ensured, it plans to begin construction according to buyers’ specifications. Andriy Gostik: It is too early to predict the chances for this program’s success. The idea of continuing construction in the absence of debt financing for projects could be workable for developers able to raise initial capital for financing construction through pre-payments by apartment buyers. As the domestic mortgage market is frozen, the only category of potential buyers able to make prepayments is the wealthy. Accordingly, TMM has chosen to test the new financing scheme with a premium-class housing project on Laboratorny St. In our view, the stock price is unlikely to be affected by the news.