Real Estate


Q2 2007

Rodamco Acquires First Shopping Center in Russia

  • January 01, 1970
Developer Capital Partners has announced a forward sale of a 50-percent stake in the Metropolis Shopping Center to Rodamco, Europe N.V. - the largest publicly listed property investment and management company in the retail sector in Europe, in a deal where Jones Lang LaSalle acted as advisors.

Deripaska Expands Construction Empire

  • January 01, 1970
Oleg Deripaska's Basic Element holding company has made several important acquisitions on the construction market. In late April a surprise announcement was made that Deripaska had bought a 30-percent stake in Austrian builder Strabag, the fifth-largest European construction company in Russia, for 1.2 billion euros ($1.6 billion). Strabag has been active in Russia since the late 1990s and is currently involved in the construction of the Northern Tower in Moskva-City and the reconstruction of the Hotel Moskva.

Editor's View

  • January 01, 1970
I'd like to open the second issue of Real Estate Quarterly of 2007 with a warm welcome to all the speakers and participants of this year's Adam Smith Conference. The Russian real estate market continues to grow exponentially and attract major inflows of capital, and it's not difficult to see why - apart from returns which leave markets in other countries standing, there are still virgin tracts of the market waiting to be exploited, especially in the regions.

Detsky Mir Seals Refinancing Deal

  • January 01, 1970
Detsky Mir-Tsentr, the parent company of the Detsky Mir department store on Lubyanskaya Ploshchad, and RaiffeisenBank Austria have signed a contract for a multi-currency credit line valued at a total of 50 million euros to run for two years from the date when the deal was closed. At the same time, Detsky Mir-Tsentr has reached an agreement with Raiffeisen for the provision of a leasing limit for a total of 15 million euros in order to finance the purchase of retail and warehouse equipment. The credit line has a floating interest rate, tied to LIBOR for the US dollar and euro samples, and to MosPrime for the ruble sample. The company estimates that the interest it pays on its existing loans will be reduced from 11.5 to 8 percent thanks to the new credit line. The credit will be used to increase circulating funds and to refinance the companies existing loans portfolio.

What's up?

  • January 01, 1970

Retail Realty Update

  • January 01, 1970
Moscow retail remains among the most active in Europe in terms of the sheer volume of new shopping center supply being delivered to the market. The gap with Western Europe, that seemed insurmountable only a few years ago, is quickly closing, as thanks to a massive influx of international chains and high-class shopping mall projects coming on stream.

Why it Pays to Project Manage

  • January 01, 1970
It is now obvious that fact track construction of advanced modern multifunctional buildings requires the application of new and more effective construction methods that make it possible to structure the construction process in the right way from the very beginning and provide an optimal budget and enough time without compromising the high quality of work performance.

No Cheap Housing in Sight

  • January 01, 1970
The cost of housing will rise again next year, said Sergei Kruglik, head of the Federal Construction and Housing Maintenance Agency at an international construction congress in St. Petersburg, Novaya Gazeta reported. This is because prices are closely linked to the cycles in which new housing is commissioned by the state; last year's two-fold rise in prices for housing in Moscow and St. Petersburg resulted from the fact that the bulk of new housing was delivered in December, said Kruglik.

Warehouse Outlook

  • January 01, 1970
Having begun to develop actively only around two years ago, in 2007 the warehouse market has come to be the most dynamically developing sector of the commercial real estate scene. Over 2006, the amount of investment in warehouses grew twofold over 2005, which can be put down to the activities of international investment funds working in this sector. What has attracted their interest is primarily the embryonic stage of the development of this market, the enormous unfulfilled demand in the warehouse property market and the relatively high profitability of real estate projects in the Russian market in general. The acute lack of good quality warehouse space is the result of a growing consumer society, bringing with it active development of the retail sector. The number of large-scale, multi-phase projects of 200,000 to 600,000 square meters announced by developers has increased and chain projects both by Russian and foreign developers have finally begun to materialize.

Interstate to Manage Fifth Property in Moscow

  • January 01, 1970
Interstate Hotels and Resorts, one of the U.S.'s largest independent hotel management companies, announced in February that it had been selected to manage a new hotel in Moscow presently under construction and scheduled to open in late 2008. The company has signed a long-term contract with Monarch Construction, the builder, to manage the 300-room property. The property will feature a restaurant, lounge, pool, fitness center, spa, gift shop, and approximately 1,400 square meters of function space.

Airport Realty

  • January 01, 1970
Airports have long outgrown their initial role as just transportation facilities, emerging as lifestyle symbols and attracting the best in technology, architecture and design. No longer just a place you arrive at and leave from - across the world airports are playing an increasingly important role as magnets for real estate development. Russia is now opening up to this global trend as state and private investors alike are actively involved in upgrading the country's airports.

Mid-Range Moscow Hotels

  • January 01, 1970
Moscow, as the capital of one of the most actively developing countries in the world, attracts more and more interested glances from the other side of what used to be the Iron Curtain - the phenomenon which becomes difficult to explain even to local teens, say nothing of self-sufficient foreigners. In 2006, the inflow of business and, to a lesser extent, leisure tourists from far-away countries reached 3.7 million people, which means a 7 percent increase year on year. It is a very moderate rise, given Russia's strong economy and, as a consequence, the constantly growing number of foreign businesses that include Russia in their strategic maps, as well as the world-wide tourism boom. Possible reasons? There are many, but there is one that is most evident: the acute shortage of quality accommodation.

The Future for Regional Hotels

  • January 01, 1970
Trying to make sense of the regional hotel market in Russia is a bit like trying to put together a jigsaw of seemingly completely incompatible pieces - in this case represented by anything from apartments rented out to travelers on illegal short-term leases right up to expensive hotels belonging to world-famous brands. When it comes to surveying the price range, it's possible to find budget class hotels where the cost of a room for the night without breakfast does not exceed 1,000 rubles. The economy class range covers rooms costing from 1,500 to 4,500 rubles. In the middle range we find hotels with rooms costing from 4,000 to 7,000 rubles per night. Anything costing over 7,000 rubles per night falls into the top range.

Moscow Region Land Disposal

  • January 01, 1970
The Moscow Region government recently adopted laws affecting the procedure whereby local authorities exercise their powers. Importantly for investors and developers, these included the Moscow Region Laws on Amendments to Moscow Region law "On the Regulation of Land Relationships in Moscow Region," No. 244/2006-OZ and No. 23/2007-OZ dated December 22, 2006, and February 16, 2007, respectively, which provide for a number of changes in the way that local authorities exercise their powers when disposing of land in the Moscow region.

Structuring Investment Deals

  • January 01, 1970
The Russian commercial property market is booming but is still an immature one with plenty of projects still under development or in the pipeline; this is the case in both Moscow and in other, less developed, regional cities.

Trouble-Free Regional Investments

  • January 01, 1970

Wal-Mart Gets Ready For Russia

  • January 01, 1970
After five years of anticipation, speculation and rumors of takeover bids, it finally seems to be definite that Wal-Mart, the world's largest retailer, will enter the Russian market. So far no definite plans have emerged, but it was reported last month that the company is already registering its trading brands with Rospatent. Edmund Harris talks to former Wal-Mart top executive-turned-business speaker and author Michael Bergdahl, to discuss the company's expansion strategy and whether that will stand it in good stead to enter Russia.

Zoning to Take Pressure off Historic Center

  • January 01, 1970
Moscow city officials are looking to divide the city center into separate business and historical districts in an attempt to stimulate further development and attract more tourists, it was announced at the end of March.

Property Fund Announces Completion of First Fund Raise

  • January 01, 1970
Rutley Capital Partners LLP, the real estate private equity business of Knight Frank London, in March announced the formation of Rutley Russia Property Fund, a new investment fund for Russian commercial property.

Romanian Real Estate

  • January 01, 1970
In 2006 Romania concentrated its efforts on just one aim - admission to the European Union. With strong GDP growth of over 7 percent, falling unemployment and inflation hitting a record low of below 5 percent, Romania once more displayed its commitment to establishing a functional market economy. These positive economic developments, combined with the restructuring of the legal system, and an on-going battle against corruption, won the country a long-awaited place at the EU table.