Michael Belton: “We don't focus on mass production but on customer interest."

3 December 2019
Michael Belton: “We don't focus on mass production but on customer interest."
Having started working in Russia real estate market in the 1990s as an employed manager, today American Michael Belton partly owns international development company Wainbridge. Its strategy aims at implementing ambitious and non-standard projects in the field of residential and multifunctional real estate business and luxury. Michael Belton tells Finansovaya Gazeta (Financial newspaper) about the specifics and adaptation of this segment in our country while recalling about him started working in Russia and created his own company.

- A lot of Russian businessmen of the 1990s feel nostalgic for that time. When in your opinion it was easier to work in Russia real estate market – 20-25 years ago or now?

- I started my career In Russia as a Top-manager in large international company Hines International, and it was an excellent professional experience. In the 1990s specialized real estate agencies began to appear in Moscow, the number of private brokers started to grow. However not many people understood how to build really high-quality projects. I would describe the features of that period with a few words: low competition, closed pricing, high profitability and lack of experience. In fact a lot has changed since that time; a real revolution has taken place in this industry. Nowadays in our sphere professional players with wide expertise and expert knowledge prevail and competition is now not only price but primarily high quality. I like working in the current conditions more when you realize that your product is in demand in a highly competitive environment. It motivates and inspires to create even more interesting projects.

- What was your first project in Russia?

- The first one was village “Pokrovskiy Hills”. This project can be considered unique by rights. “Pokrovskiy Hills” is one of the first premium segment townhouse villages built nearby the center of Moscow. And this project like any first-born baby is especially precious to me.

- Tell about your participation in the construction of the project “Krylatskiy Hills” which was recognized as the best class A business center in Moscow in 2006. What was the reason of such success in your opinion?

- I started working on the development of the European-level business park “Krylatsky Hills” as the Deputy General Director at CMI Development (Millhouse Capital). The project became famous rather quickly and it attracted attention with its location; it is not by chance the project subsequently became the winner of the CRE Prize in 2006 and the winner of IPA in 2017. 20 years ago everybody built in the center of Moscow and only such projects were considered profitable. We went to decentralization and we attracted the anchor tenant at the earliest stage. The project itself had and has a number of qualitative characteristics that distinguished it from its competitors in those years: friendly architecture, innovative solutions, expert design, responsible contractor. All these factors together contributed to the project success. And pretty low rental rates only raised interest to the project.

- Why did you decide to establish your own company and did not continue to work as an employee?

- The decision to create your own business comes when you feel that you are ready to do something on your own and you want to do it your own way according to your internal feeling of what is right. My total work experience was about 12 years by the time of my decision to establish my own development company. By that time I had already completed several projects and gained relevant experience as well as I gained solid reputation in this field. I wanted to establish my own investment company which would combine international experience with deep knowledge of the Russian market. And I succeeded.

- Wainbridge is focused on building business, premium and deluxe projects. Why did you choose such positioning? How marginal such projects are? After all economy class new buildings are the most mass market.

- In fact we do not set any limits and boundaries but in our activities we focus not on mass but on customer interest. Historically Wainbridge creates mostly unique deluxe and premium projects abroad. But we did not come to this like any other developing company right away that means that the company’s global experience provides for a number of some other formats. The business class we offer in Moscow is always something more than the basis that the market shows in this (very conditional) category. Due to the location, format, fit-out, infrastructure our level exceeds the conditional one. Buyers understand the reasons why we remain in the marginality that we are interested in. Therefore if to tell briefly here in Russia we simply adhere to our international course in a slightly different interpretation that is optimal for the local market. And it’s not interesting for us to go into the field below “business”. After all the quality we offer does not tolerate any alternatives.

- Do you sell flats with fit-out? If so how do you motivate your buyers?

- It’s not necessary to motivate our clients to buy fit-out flats. Having seen our fully fit-out showrooms in our sales office just a few people will want to make fit-out on their own and to spend extra time, efforts and money on it. This is one of our main advantages: we propose our buyers to save time and get some quality product that will ultimately exceed their expectations. After all it is always more difficult and less profitable to do fit-out by yourself or even by any hired fit-out team. Even in such a huge project as multifunctional complex Aquatoria. We will complete all 4 residential buildings with fit-out. You agree that it’s much better to move into a new house with clean entrances and without any construction garbage and any drill sound. Peace and quiet will be the key to the good relations with your neighbors.

- How did new legislative changes - implementation of escrow accounts - in the construction sphere affect your business?

- In August due to the fulfillment of the regulated conditions, namely the readiness of the object by at least 30%, we received construction permission for Aquatoria without opening escrow accounts. The same situation was with Soho+Noho. All the projects were considered individually and fully met the criteria of Moskomstroyinvest. And foreign developers have been working with banks for many years. I consider these changes in the law as a positive measure as they will protect the interests of the equity participation agreement’s parties and make this field even more civilized. But in general I can say that these new regulatory schemes for the Russian market did not have a significant influence on our company at this stage.

- Do I understand correctly that Wainbridge does not rely on office construction in its business?

- Wainbridge is primarily interested in residential projects’ construction. But if we speak about our global experience, as I have already mentioned, the 11-year international experience includes projects that combine different components. In general our competitive advantage is an alternative approach to real estate which implies the development and implementation of formats which combine maximum opportunities for a better life and meet the spirit of time. Implementation can be different - we do not put any barriers. If we talk about Russian experience, for example, our project Aquatoria considers the availability of office space on the surrounding territory, and thanks to this, a modern high-tech business center will appear on the banks of the Moscow Canal, which will open additional benefits for our future residents - the possibility to work near home. From global experience I’ll give you an example of a deal with selling of 60 thousand square feet commercial condominium in such a foreign project as 169 Orchard Street in New York – the same project as our Russian project Soho + Noho. It became one of the most successful one and it was recognized as one of the most expensive in New York this year. By the way this project is a good example of our approach: in addition to the modern architectural residences a whole range of additional features is provided there. My favorites among them are a public terrace with amazing views of the city and a special area for parties and barbecue as well as a fitness club on the ground floor.

- Tell about your ongoing projects. What are the main problems in your business you can name?

We have 4 projects in our Russian portfolio. One of them is fully completed “Fili Park” club house awarded with several professional awards, and three more projects that are underway: multifunctional complex Aquatoria, apartment complex Soho + Noho and Bvlgari Hotel & ResidenceS Moscow which stands out due to its uniqueness, it’s located 300 meters from the Kremlin and the Red Square. Wainbridge's mission is to create unique high-quality concepts. And I do not see any significant problems that may hinder us on the way to strategic development. The real estate market is mobile and changeable and any changes are growth within the new conditions first of all. And that is what we are always ready for.