BIN Gains Control of Petrovsky

One of Moscow's better known and more prestigious shopping malls, Petrovsky Passazh, is now under the control of the BIN group of companies.

The consortium's head, Sait Gutseriyev, is a State Duma deputy and the brother of the president of Slavneft. According to industry insiders, BIN's real estate assets have recently grown considerably.

Petrovsky Passazh was built in 1906 and reopened after a renovation in 1991 with 7,400 square meters of floor space. It houses boutiques such as Max Mara, Kenzo and Bally, some of which belong to the Bosco di Cilliegi network. The shopping center had a turnover of 96.5 million rubles ($3.15 million) in 2000, 39.7 million rubles of which were regarded as profits, according to its annual report that year.

At the beginning of last year, its major shareholders were Brunswick UBS Warburg (27.72 percent), Reiter Investment Ltd. (9.58 percent), ABN AMRO bank (7.08 percent), Treydinvest (7.07 percent) and a number of individuals, mostly the company's top managers -- the largest of these stakes is 14.28 percent.

The ROSbilding company, which specializes in reselling retail real estate, purchased an 80 percent stake in Petrovsky Passazh last summer for BIN. At the end of last year, the shopping center's shareholders decided to appoint a new general director.

Meanwhile, BIN's press service neither denies nor confirms that the consortium owns a controlling stake in Petrovsky Passazh. Some market participants named Chaika Plaza, a part of the BIN group, as the buyer of the shopping center. Chaika Plaza general director Vyacheslav Marchenko categorically denied that his company had been involved in the purchase, while Vera Kondratyeva, general director of the BIN supermarket chain, said: "I am not ready to make any comment on the subject."

Nevertheless, a number of independent market participants and one of Petrovsky Passazh's top managers confirmed that BIN had bought the shopping center. According to one source, BIN purchased its stake from foreign investors through Brunswick UBS Warburg Nominees, their nominal assets holder, and from the shopping center's management.

The source declined to comment on the cost of the acquisition, but realtors estimate the costs of such a building would be equivalent to the rent collected over a three- to five-year period -- not taking into account the shopping center's own retail business. Rent in the Petrovsky Passazh is rated at $2,000 per square meter per year.

Market participants consider the purchase to be just the most recent of BIN's moves into the retail real estate market. Last year the union added eight new locations to its 16 grocery stores. It also purchased the Magnolia retail network of six outlets. According to a source close to real estate circles, BIN recently acquired a supermarket in the Troparevo area of Moscow. In addition, Chaika Plaza owns three business centers.

"The first step BIN's new management team took at the shopping center was to improve the mall's market concept," said Sergei Gipsh, managing director of Colliers International consulting company. "They started getting rid of their old clients who don't fit into the center's repositioning as a gallery of expensive boutiques."

Petrovsky Passazh has many advantages over other shopping centers, according to Gipsh. These include its central location, a popular historical spot, the quality of its restoration work, a sizeable parking lot and its two entrances, one on Ulitsa Petrovka and the other on Neglinnaya Ulitsa.