Interview with Mr Konstantin Filippishin, General Director
Konstantin, your leadership status has recently been acknowledged by the world community and not by this award. Could you please tell us about the award?
This is an award of the International Real Estate Federation which has an 80 year history. For the first time a Russian company won FIABCI Prix d’Excellence for environmental friendliness of low-rise development. It is a very prestigious award. We are proud that we successfully use best international practices in environmental friendliness and low-rise housing construction and that we develop such projects.
Konstantin, do you think it is a tribute to fashion or a trend that will inevitably affect Russia?
I’m absolutely confident that Russia will use world’s best practices. There is no need to reinvent the wheel. We just need to apply those practices to the Russian reality. We cannot avoid international trends. That is the reason we use energy efficient and environmentally friendly solutions.
What are the obstacles to implementing proper environmentally friendly technologies?
First, it is an economic issue. Not everyone is ready to pay extra to live in an environmentally friendly and energy efficient home. We need to improve the purchasing power of people.
How much more expensive is an ecologically friendly home?
With all best international solutions, it is about 50 percent more expensive. That includes heat pumps, filler structures, solar batteries, heat exchangers, a heliosystem, etc.
What is the operating payback period of these one-time costs?
It depends primarily on electrical power costs which vary significantly in Russian regions. In Moscow the payback period of some solutions is three to five years. In the regions it may reach up to ten years. These are investments in the future, not only in future savings but in our health and lifestyle. We had a technical director from Canada who used to say that when you live in a house on land, you need to feel magnetic waves. That is why it is important to build wooden rather than concrete homes to be in balance with nature.
There is an opinion that eco construction is a combination of economy and ecology. Is there an option when at the stage of ‘green’ construction the costs would be lower than 50%?
First of all, there are frame homes built everywhere in the USA, Canada and half Europe. There are very interesting technologies related to processing of wood and plants to make energy efficient and environmentally friendly blocks. Both authorities and companies need to pay more attention to these solutions. Houses turn out to be less expensive and have a higher quality in terms of ecology and energy efficiency.
Is there a certain stereotype that hinders that?
Yes, and we need to overcome it too.
In terms of low-rise housing, what is considered affordable?
In Orenburg we build twenty to thirty homes each month. We sell homes without interior finishing and engineering equipment with a lot of six to eight hundred square meters with central communications including sewerage, gas, water, electricity and low power networks laid to the house for one million nine hundred rubles. That is the price of a good two-room house with utility rooms of 56 square meters. It also requires interior finishing.
Thirty thousand per square meter?
The price per square meter comes to 32-34 thousand. However this is the so-called entry price people pay to get a minimum house. To get the minimum price per square meter, we sell homes with 100 and more square meters, townhouses, apartments in two and three-storey houses for 28 thousand rubles per square meter.
I see this is not your first environmental award. You also have the Green Awards of the first All-Russian environmental contest so you consistently follow this route. How did you come to that and how does it go with a desire to get maximum proceeds from each project?
I can give two responses. First, often it is not more expensive. We hire world’s best architects. US architects designed the housing development in Orenburg. Certain solutions do not require additional expenses. They just need to be taken care of at the very early design stages. Effective technical solutions may be put into detailed design which changes the quality of housing. Let’s take for instance water conditions. An improper storm drainage system or lack thereof results in standing water in the streets. That contributes to dirt and dust which is incompatible with quality. To prevent all that, all you need is a proper design. We certainly believe that with time buyers’ requirements to quality will grow. In Soviet times not everyone had a chance to live in the country. We now provide this opportunity with such projects.
A stereotype that ecology is an additional social responsibility imposed on us resulting in additional expenses is gradually vanishing. People are starting to realize how nice it is to live in environmentally clean homes. How does the market respond to these trends?
After the Soviet Union collapsed, low-rise housing has been developing in proximity of major cities, mostly business and VIP class developments. It is of course based on all these solutions. We believe that buyers will appreciate that and with increasing purchasing capacity people will start thinking more about the quality of products including housing.
The trend of the decade is a massive use of prefabricated structures. Is this trend manifested in Russia and what is your forecast for the near future?
I believe we will come to that. Just like in anything else, we will not avoid any trends. For instance, before the crisis we were seriously thinking of building such plant in Russia. Just based on the fact that historically a brick house will always be more expensive. Modern technologies have a high quality although we have been warned that a prefabricated home may not survive a collision with a tractor. This cannot be taken seriously because no one would do that to their house. They should be seen as an opportunity to build faster. A conveyor at a plant assembles three houses in one day. A small house can be put together on site for a day or two. That can significantly lower prices but a large turnover is required. We have built such homes on our site to show their advantages to buyers.
One of the factors stimulating the development of energy saving technologies, in particular active technologies, is that excessive heat generated by a house can be sold, i.e. the house will make money. What are the laws in this regard and when will we come to that?
It is a good question. We are making efforts to improve this regulation and bring it to the international level. This is still very hard. Primarily, grid companies are opposed to that. The appearance of such projects where they would have to pay not to power stations but to private homes is not beneficial to them. In Denmark, for instance, at the end of the year a meter can show a minus, i.e. the government should pay you for the energy you supplied to the network.
Does the government pay?
Yes, it does. In Denmark this works very effectively. They do not have resources which we have and do not appreciate and they try to save on everything. They are leaders in that. We do not need to copy them but we should not be wasteful.
What other benefits do owners of energy efficient homes have?
You know, authorities directly subsidize certain solutions. In Germany 50% for energy efficiency is subsidized by the government. In Denmark they even collect rainwater which helped improve the environmental situation. There are no more floods after rain showers. There are no huge bills for water. This results in people living in harmony without polluting or destroying something that can never be restored. On the contrary, they start generating energy from solar batteries that actually work.
How far are we behind Europe?
According to some indicators, over 10 years but it is possible for us to catch up. I believe Russia can move forward at a fast pace.
Are there any prerequisites for that?
Yes, there are. The government is now concerned with energy efficiency. Authorities try to find different ways to promote it. Most importantly, there is understanding and intention. That is a prerequisite that will bring us to a solution.
Are there a lot of differences between the culture of western and Russian developers? What are they?
I see two differences. The first is a very significant financial analysis when people put a lot less margin in construction, primarily, of low-rise housing. This requires a lot of detailed work with estimates, materials, contractors and own staff. You need to know what type of housing it is, where it is located, how much land it takes and how utility lines can be laid. It is a professional business that needs to be done properly and we have a lot to learn from the west. The second primary difference is probably marketing targeted towards buyers. They carefully study demand including types of houses, layout, prices, materials, location including in relation to the sun, environmental regulations and even trendy colors. They immediately adjust their business which instantly changes according to demand and does not produce projects that lost appeal five years ago.
How can we develop this skill to make such calculations and be focused on the client?
We need to learn that. We need to establish professional communities and start courses. We need to study world’s best practices without being afraid of reinventing the wheel. We can catch up a lot faster than what we are currently doing. We, by the way, want to form a group of our own experts and train them. I strongly recommend that to all developers.