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. Last Updated: 07/27/2016

Work, Play and Shop in One New Complex

Moscow developers are converting an old auto-repair factory into a large recreational, office and retail complex that analysts say is the largest of its kind in the city.

The 12,000-square-meter center on Spartakovskaya Ploshchad, near Baumanskaya metro station in northeast Moscow, is scheduled to open in July.

"Market surveys conducted by our company revealed much demand for high-quality affordable sports and entertainment facilities," said Vasily Boiko, general director of Your Financial Trustee, a Moscow-based investment company that developed the project. "At the same time, the complex's location ensures that the office and retail space, too, will have takers."

Boiko said the complex is conveniently located, although it is a 15- to 20-minute drive from the Kremlin. It is one kilometer off the Moscow ring road and a three-minute walk from the Baumanskaya metro station. It also would be near a third ring road, which is being proposed by the city of Moscow.

Boiko estimated that the company will spend about $5 million developing the complex by restoring the site of the former auto-repair factory. It is leasing the land from the city at an annual rent of $50,000.

"The building itself was in fairly good condition and required no new construction when we acquired it last fall," Boiko said. "We just had to repair the premises to bring it up to international standards and work on the facade."

He said Your Financial Trustee is involved in another, larger Moscow project, which he declined to identify or describe.

Tsentr Na Spartakovskoi, as the project is called in Russian, consists of six buildings that range from two to five stories. Building facades are being renovated in the old Russian style, Boiko said.

Rents in the complex will be around $490 per square meter per year, which real estate analysts said is reasonable for a site away from the city center. Gerald Gaige, head of real estate services with Arthur Andersen's Moscow office, said the rent for the class B project is what one would expect. "But it is still far lower than rents in other new projects, where annual rents can run in the range of $650 to $750 per square meter or even higher," Gaige said.

Boiko said interest is high among tenants but would not reveal names.

"We have been choosy about tenants, as we are anxious not to disrupt the harmony of the complex," Boiko said. "For instance, we had to turn down a trucking company that would not have fitted the center's profile."

Boiko said Your Financial Trustee is aiming to maintain a recreational feel to the complex while balancing all three uses. "Most of the building is polyfunctional, meaning that space given over to office or retail or sports can be increased or decreased," he said.

Georgy Mefodyev, head of the retail department at the Noble Gibbons real estate firm, a project consultant, said the leisure section is expected to get the most space -- at least 40 percent -- with retail coming next.

Mefodyev said developers are hoping to cash in on the bowling craze by building the biggest alley in Moscow. "This is a former factory building with spacious high-ceiling rooms, which lend themselves well to sports halls," he said.

The recreational complex will contain a 24-lane bowling alley, a sport equipment store, swimming pool, billiard halls, squash courts, a gym and a room for children's parties. In addition, there will be several bars and a restaurant big enough to accommodate 70 diners.

The retail section will include a 24-hour supermarket, an exhibition hall and studio, and several smaller stores.

Most offices are expected to be rented by companies in the recreational business, although the complex will contain traditional business services, such as conference rooms for business meetings. The complex will have parking space for more than 100 cars.

Premises will be leased on a shell-and-core basis to tenants who wish to design their own interiors, but developers said they will fit the offices for a fee.

Arthur Andersen's Gaige said the idea of a mixed complex, with leisure dominating, has worked well in other countries and is likely to do so here, given a proper balance.

He said his office has received numerous inquiries about complexes that have leisure, entertainment, retail and office space as interest in this type of center accelerates in Russia.

Gaige said the Tsentr Na Spartakovskoi complex was the largest such project now being developed in Moscow and could draw consumers from outside the area if it attracted good anchor tenants.

Mefodyev said the complex would get more traffic if the third ring road in Moscow is approved and completed.