Russia is the most significant future growth market for YIT's Construction Services. In 2005 Russia accounted for nine per cent of the turnover i.e. 116 million euros. The strongest growth is now being sought in residential construction.

YIT offers investment and upkeep services to the property and construction sector, industry and telecommunications. The main market areas, besides Russia, are Scandinavia and the Baltic countries.

Residential construction in Russia grew from seven to ten per cent between 2000 and 2005. The figure for 2006 and 2007 is put at seven per cent. The growth has corresponded to the company's expectations.

"Russia is a big country which offers a great deal of potential and where a sufficiently sharp focus is important. The five million inhabitants of St Petersburg alone offer enormous scope for every kind of business," says Senior Vice President Timo Lehmus of YIT Rakennus Oy.

There are several reasons for the good trend, such as the poor condition and level of furnishing in old residential properties as well as the cramped living conditions. The dramatic growth in the gross national product in real terms has raised the standard of living, which makes it possible to purchase new residences.

Experience brings reliability

Lehmus says the challenges of construction in Russia are to a great extent the same as in construction projects generally: where to find capable and reliable workers and subcontractors and how to manage a project so that it remains on schedule.

YIT has been carrying out projects in Russia - and the Soviet Union - for more than 45 years, so it can point to experience and references.

"The strong corporate culture and operations have achieved a volume that makes it possible to operate long term on the Russian market. We operate through genuinely local companies, using Russian staff who know the market and methods and can serve local customers. YIT also offers professional expertise and strong financial support for developing the business," Lehmus says.

Help from new housing law

Residential ownership in Russia has been the right of a few: only one tenth of the population has been able to do this using their own savings or a loan. A new housing law makes things easier, improving consumer protection and lowering the threshold for owning a residence. The law improves the implementation of YIT's targets in developer contracting in many ways.

With the new law a person selling a residence must show detailed sale material so that the customer knows what he is buying. The seller must possess the site where the building will take place and a project must have a building permit. The builder will also give a five-year guarantee for the work he does, which has not been the custom before.

"Many local building companies are astonished by the practical application of these new terms that improve consumer protection, whereas YIT has behind it dozens of years of experience in consumer protection regulations that are even tighter than those in Russia," Lehmus says.

"As consumer protection improves, an increasing number of people will be prepared to buy a new residence and so the law will increase the demand for residences."

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YIT has 45 years' experience in construction projects in Russia. Growth is now being sought in developer contracting in particular.