The outlook on the credit rating of G-Group JSC (hereinafter, G-Group, the Company, or the Group) has been changed from Stable to Negative in view of a decrease in the coverage indicator, as well as the risks of further deterioration in the factor assessment due to the tightening of the monetary policy by the Bank of Russia and the refinancing of part of the Company’s corporate debt at higher rates in 2025.
The credit rating is determined by the high profitability, low leverage, and strong liquidity. The operational risk profile assessment is a combination of the Company’s very strong business profile and geographic diversification. The very high industry risk, as well as the medium coverage of interest payments, have a constraining effect on the credit rating.
G-Group is a well-established leader in the real estate market of Kazan. The Company sells residential and commercial properties, constructs and leases retail and office properties, and single-family homes. Unistroy, the Company’s brand, ranks 24th in Russia in terms of housing projects under construction, according to the Unified Resource of Developers as of September 2025, and 66th in terms of the volume of housing projects completed in 2024.
KEY ASSESSMENT FACTORS
Very high industry risk. According to the Agency’s methodology, the very high risk of the housing construction industry is a serious factor constraining the Company’s credit rating.
Very strong business profile. The Agency notes the wide diversification of the project portfolio. As of H2 2025, G-Group is selling 25 ongoing projects, most of which belong to the comfort class segment. The high diversification of projects ensures a balanced inflow of proceeds from the released escrow accounts and considerably reduces the dependence of financial results on the implementation of a specific project. According to the Agency’s expectations, the share of the largest project in the Company’s revenues will not exceed 15% in the next three years. The Company also demonstrates very high sales rates for current projects, and it strives to meet project deadlines.
The high dependence on building materials and subcontracting has a constraining effect on the business profile assessment. Construction work is subcontracted, as the Company does not have its own production facilities, while the Group’s companies act as technical customers, technical supervisors, and designers. An additional constraining factor is the significant share of agency sales, which reaches 60%.
Revenues and EBITDA from activities related to commercial real estate (UD Group) as of the end of 2024 amounted to 7% and 10.7%, respectively. ACRA maintains an additional adjustment for the share of commercial real estate, which is considered to be a less risky business segment compared to residential real estate and ensures stable rental flows, which are a stabilizer of the Company’s credit metrics and an additional opportunity to receive long-term financing secured by construction projects.
Very strong geographic diversification and medium market position. G-Group holds leading positions in terms of sales of residential real estate in the key region of its presence — Kazan. 58% of the Company’s land bank is in the Kazan agglomeration; in 2024, Unistroy was the leader among developers in terms of residential projects commissioned in the Republic of Tatarstan (its share in this region is 12%, according to the Unified Resource of Developers). In addition, the Company is actively developing its business in Yekaterinburg, Tolyatti, Perm, Makhachkala and Saint Petersburg as part of its regional expansion strategy. However, the Company’s market shares in most of its new regions remain low. G-Group owns a land bank of 372,000 square meters in Yekaterinburg (12% of the portfolio) and 365,000 square meters in Saint Petersburg (12%). In the next three years, the most important regions in terms of revenue will be Kazan and Yekaterinburg. The Agency believes that the share of the largest region in the Company’s revenues will not exceed 70% over the next three years.
Low leverage and medium coverage of interest payments. When calculating the ratio of net debt to FFO before net interest payments, ACRA adjusts the Company’s total debt by the debt raised as part of project finance using escrow accounts and secured by buyers’ funds placed in these accounts. In addition, ACRA includes interest expense on the project debt in the prime costs.
According to the Agency’s estimates, the weighted average ratio of adjusted net debt to FFO before net interest payments for the period from 2023 to 2028 will be 1.23x. At the same time, leverage will peak in 2026 due to the launch of new projects. The Agency notes very high coverage of project debt by funds held in escrow accounts, as by the end of 2024, their amount exceeded the project debt by 23%. G-Group’s debt repayment timeline is balanced (there are no pronounced peak repayment periods).
At the same time, ACRA notes that corporate debt grew in absolute terms to RUB 19 bln in 2024 vs. RUB 15.7 bln a year earlier. The growth of debt and debt servicing costs against the background of the tight monetary policy of the Bank of Russia, as well as debt refinancing at higher rates in 2025, led to a decline in the score for the coverage of interest payments. According to the Agency’s projections, the weighted average ratio of FFO before net interest payments to net interest payments from 2023 to 2028 will be 3.92x.
Medium business size and high profitability. According to the Agency’s calculations, the weighted average FFO before net interest payments and taxes will be RUB 13.6 bln for 2023–2028, which, together with the volume of the portfolio of projects under construction, corresponds to a medium business size as per the Agency’s methodology.
The Company’s profitability is assessed as consistently high. The Agency estimates the weighted average FFO before net interest payments and taxes margin from 2023 to 2028 at 28.9%, noting a gradual decrease in the ratio of SG&A to revenues as the size of the business grows.
key assumptions
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Construction projects to be completed and sales targets to be met as planned;
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ACRA’s calculations include only projects under construction and projects to be commissioned in accordance with the Company’s current financial plan;
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No fall in real estate prices in the primary market of the Company’s regions of presence in 2025–2028;
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Dividend payments in the forecast period as per the Company’s presented financial model.
Potential outlook or rating change factors
The Negative outlook assumes that the rating will highly likely be downgraded within the 12 to 18-month horizon.
A positive rating action may be prompted by:
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Assessment of leverage improved to the highest level along with the weighted average ratio of FFO before net interest payments to net interest payments exceeding 5.0x;
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Volume of construction-in-progress exceeding 1 mln sq. m along with the weighted average FFO before net interest payments and taxes exceeding RUB 30 bln and the weighted average ratio of FFO before net interest payments to net interest payments exceeding 5.0x.
A negative rating action may be prompted by:
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Weighted average ratio of FFO before net interest payments to net interest payments declining below 2.5x;
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Weighted average FFO margin before net interest payments and taxes falling below 12%;
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Payment of dividends in excess of the Company’s current plans.
Rating components
Standalone creditworthiness assessment (SCA): a-.
Support: none.
Issue ratings
No outstanding issues have been rated.
regulatory disclosure
The credit rating has been assigned to G-Group JSC under the national scale for the Russian Federation based on the Methodology for Assigning Credit Ratings to Non-Financial Corporations under the National Scale for the Russian Federation and the Key Concepts Used by the Analytical Credit Rating Agency within the Scope of Its Rating Activities.
The credit rating of G-Group JSC was published by ACRA for the first time on October 2, 2019. The credit rating and its outlook are expected to be revised within one year following the publication date of this press release.
The credit rating was assigned based on data provided by G-Group JSC, information from publicly available sources, and ACRA’s own databases. The credit rating is solicited and G-Group JSC participated in its assignment.
In assigning the credit rating, ACRA used only information, the quality and reliability of which were, in ACRA’s opinion, appropriate and sufficient to apply the methodologies.
The decision to affirm the credit rating of G-Group JSC at A-(RU) and change the credit rating outlook for G-Group JSC to Negative was made at a repeat meeting of the rating committee taking into account ACRA’s review of an appeal against the decision of the primary rating committee to affirm the credit rating of G-Group JSC at A-(RU) and change the credit rating outlook for G-Group JSC to Negative. The credit rating and its outlook were not changed following the review of the appeal.
ACRA provided additional services to G-Group JSC. No conflicts of interest were discovered in the course of credit rating assignment.
