Norilsk Snaps Up Promstroi Complex

VedomostiNorilsk Nickel reportedly will move into Promstroibank's vacated offices at 13 and 15 Tverskoi Bulvar after the New Year holidays.
Norilsk Nickel could move into buildings 13 and 15 on Tverskoi Bulvar soon after the new year.

Formerly home to bankrupt Promstroibank, the buildings have a combined area of 20,751 square meters on a 1-hectare plot, which analysts say is worth some $40 million. They said deals of this size in Moscow could be counted on one hand.

Building 13 is an office block and has an area of 19,422 square meters. The clinic next door at No. 15 has an area of 1,329 square meters.

Promstroibank's competition manager was instructed to sell the complex by its creditors committee, which is made up chiefly of Gosinkorholding representatives.

When the auction was held last March, an asking price of $40 million was published in the Versti newspaper. But the notice did not say that a Dutch auction was being conducted, whereby the price falls until a bid is made.

The victor, Meita, offered $20.75 million but later transferred ownership rights of the building to Kraus-M.

The complex is now to be sold to Norilsk Nickel, according to a source close to the transaction who asked not to be identified. The sale agreement has already been signed.

This information was confirmed by Versti and by a source in the real estate industry who asked not to be named.

Gosinkor-holding and Norilsk Nickel would not comment Friday.

However, a Norilsk Nickel employee who declined to be identified said the former Promstroibank complex had been purchased for the company and that the relocation of a number of the company's subdivisions to Tverskoi Bulvar would start soon after the New Year holidays.

The bankruptcy procedure should soon be finished, the employee said.

The price paid by Norilsk is unknown. Real estate analysts suggest $2,000 to $2,200 per square meter, or about $40 million.

"For Moscow this is a very major deal," said Jones Lang LaSalle manager Ruben Algudzhyan.

"Office centers of this size are very rare in the city."

He said the most expensive office building recently went on sale at $3,200 per square meter. This was the Plotnikov Plaza business center built by Krest Development. Its total area -- 6,000 square meters -- is much less and, therefore, the total cost of the transaction was lower.

The U-shaped Tverskoi Bulvar complex is not in uniformly good condition. One of its wings almost burnt down several years ago and was subsequently restored. The upper two stories were repaired to a high standard and are suitable for Norilsk Nickel's senior management, said Maxim Kunin, manager of the investment department with Noble Gibbons/CB Richard Ellis.

To bring the rest of the complex up to this level would cost over $10 million, he said. There have been very few such deals on the local real estate market. Last December the Capital Investments fund paid about $25 million, or $2,200 per square meter, for the Samsung business center on Bolshoi Gnezdnikovsky.

One other well-known deal was the sale of the Ducat Place II business center on Ulitsa Gasheka for about $42 million.