Mirax Expects $1Bln in Local Projects for '08

Mirax Group, a Moscow-based developer building Ukraine's tallest building, plans to invest $1 billion in Russian property projects this year as demand for office and residential space grows.

The lack of office space in Moscow will guarantee demand for the next seven to eight years, Sergei Polonsky, the company's president and biggest shareholder, said Thursday at an investment conference. The company invested about the same amount in Russian projects last year, he said.

Investment in domestic commercial property rose by one-fifth last year as the country's economic growth fueled demand for offices, hotels and shopping malls, according to DTZ Holdings, a British real estate broker.

"Property prices in big cities worldwide will continue to grow at least at the pace of inflation," Polonsky said. "People are pulling their money out of financial markets and investing in apartments."

The high-rise developer, whose Mirax Plaza in the Ukrainian capital will open in 2009, is considering an initial public offering to help fund projects and will decide where to hold it by the end of this year, Polonsky told reporters after speaking at the conference.

Mirax has more than 12 million square meters under construction and is also looking to foreign markets "to diversify risks," he said. The company has projects in five other countries and is looking to enter three more.

The developer has opened hotels in Switzerland, Turkey and Montenegro, spokeswoman Olesya Koshkina said. The company expects 2007 sales to rise 30 percent, she said.