SRV Chief Optimistic on Expansion in Russia

HELSINKI -- SRV Group, a Finnish developer that sold shares last year, has increased its Russian investments and said its plans to expand there were not hindered by the country's political standoff with Europe and the United States.

"What we've learned is that you always have to have a partner in Russia to anchor your business to the society," CEO Eero Helioevaara said Thursday.

SRV raised around 117 million euros ($173 million) in an initial public offering last year to expand in Finland and Russia. The company acquires land and manages projects to commercialize it and sell it, hiring mainly outside contractors for the actual construction.

SRV's Russian projects include an office and retail park adjacent to the International Banking Institute in St. Petersburg, as well as a logistics center in the city's suburbs and a housing project in the former Finnish town of Vyborg.

The Russian partners supply the land and contacts with authorities, while SRV plans and supervises the project and secures outside financing.

Western companies that have struggled in Russia may not have done their homework, Helioevaara said. SRV invested "hundreds of thousands of euros" in a St. Petersburg site several years ago, only to learn that it could not build there because there was a public facility there that could not be demolished, he said.