Benetton Buys Retail Space For New Shopping Complex

In a deal that could set off a series of major real estate deals, the Italian group Benetton has purchased the department store Krasnopresnensky and the adjacent buildings.

The Krasnopresnensky department store, built in the constructivist style in 1934, is to house one of the company's largest stores in Europe, said Andrei Grigoryev, head of Benetton group's Russian representative office. The entire property, including the department store and the adjacent buildings, covers 2,500 square meters.

The main retail building is due to open in December. The complex is to include Benetton and Sisley clothes stores, a restaurant and another store that is to be one of only two stores in the world to offer Benetton interior furnishings Ч the other is in Vienna.

Total investments are estimated at more than $5 million.

The complex's previous owner, Rosbilding, purchased a number of Moscow-based department stores last year and is now asking real estate agencies for assessments on 22 retail centers. According to a Rosbilding representative, the company is acting as a consultant for the owners of the retail centers.

Rosbilding attracted attention about a year ago by aggressively purchasing the debts of some leading department stores. The stores subsequently went bankrupt, and Rosbilding took control. The full list of Rosbilding's acquisitions was never published.

The head of Rosbilding, Sergei Gordeyev, has said the company's retail centers would be turned into a single chain with the help of an unspecified Western European investor. Despite the fact that the sum of the investment was large Ч $300 million Ч City Hall did not know the investor's identity, said Vladimir Malyshkov, head of the consumer market and services department.

Many in the sector now say Rosbilding's interest in the department stores was purely speculative.

"There are a huge number of companies on the market today hoping to get hold of trading premises, but there are virtually no sellers," said Marina Burmistrova, director of Miel Real Estate's information and consulting center.