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. Last Updated: 07/27/2016

Novinsky Passes From Monks to Managers

Construction of a new class A office complex on the grounds of the historical Novinsky Courtyard is on pace to be finished by the end of the year and will be ready to receive tenants in the first quarter of 2001, project officials say.

When completed, the Novinsky Courtyard complex will add 3,625 square meters of premium office space to the Moscow property market, said Darrell Stanaford, director of Noble Gibbons, the local representative for the project’s exclusive leasing agent, CB Richard Ellis.

Located near the U.S. Embassy and about 50 meters from the Garden Ring at 20A Novinsky Bulvar, the new complex has received more attention than most building sites due to the cavalcade of historical figures and events associated with the property.

The site’s first developer was the Russian Orthodox Church, which built a monastery there in the 15th century. Subsequent owners and residents included Ivan the Terrible, Peter the Great and Napoleon Bonaparte, who lived their briefly during the invasion of 1812.

The courtyard was the scene of numerous festivals and celebrations until the middle of the 19th century, when it was turned into an usadba, or private estate.

In 1917 it was renamed the Bulvar, only to be destroyed 20 years later during Stalin’s reign.

Noble Gibbons says the project is unique in terms of its adherence to Moscow’s pre-Revolutionary architectural and historical traditions and is comprised of three buildings that differ in style, shape and size.

Both the northern and eastern buildings are old structures that underwent capital reconstruction. The southern building is being built from the ground up, allowing architects to incorporate some of the amenities found in modern-day office developments that the other two buildings lack such as an underground parking lot for 35 vehicles.

U.S.-based company Triland Development, a major player in the international property market with extensive experience in emerging markets, is both the developer and main investor in the project.

Triland was the first foreign controlled legal entity to own real estate properties outright in postwar Bosnia and Herzegovina, including the Greek Embassy in Sarajevo.

While neither Triland nor Noble Gibbons would go into detail about the price of the project, local realtors unassociated with the project speculated that the cost was in the range of $10 million.

"We normally calculate $1 million per hectare of land on which the project stands," said Michael Lange, managing director at Jones Lang LaSalle.

"If we include other variables, such as construction costs, project transactions, landlord’s terms, contractors and others, then we arrive at an approximate cost of $2,250 to $2,500 per square meter of construction space," he said.

Lange said that when these variables are added to other factors like designing and finishing the project, the cost of the Novinsky Courtyard project could run as high as $8 million to $9 million.

Adding the cost of developing the entire courtyard and its surroundings on top of that, the working figure amounts to over $10 million.

Noble Gibbons has yet to fix the rent and operational costs per square meter per year, but its marketing team is confident that they will be competitive with existing properties in the class A-2 office category, such as the Paveletsky Building and the later phase of Riverside Towers.

"Our marketing parameters will stimulate active interest among the multinationals, who will be attracted to this property for its prime location and high quality of development," Stanaford said.

Assuming full occupancy at the prevailing rates for class A-2 office space — between $400 and $450 per square meter per year — the Novinsky Courtyard office complex should generate revenues of over $1.6 million per year.

"We expect substantial preleasing as we believe the market prospect of this project will be excellent," Stanaford said.

Novinsky Courtyard is in a prime location that offers easy accessibility to other amenities and facilities in the area such as the two most popular pedestrian streets in the city — the New and Old Arbats, which are just around the corner.

Also nearby are top quality theaters, restaurants, pubs and fast-food establishments like McDonald’s and Russkoye Bistro.

Within walking distance are several five-star hotels including Radisson Slavjanskaya, Marco Polo, Marriott Grand and Swiss Diamond.

The location of the complex also allows for easy access to the city’s main traffic arteries via the Garden Ring and three nearby metro stations, Smolenskaya, Krasnopresnenskaya and Barrikadnaya.

Mark Stiles, director of Moscow-based Stiles & Riabokobylko, called the location "almost perfect."

Jones Lang LaSalle’s Lange also said the location was prime and that the project, when completed, should fare well on the market.

"The market expectations will be high because more people are looking for such free-standing buildings such as the ones in [Novinsky Courtyard]," Lange said. "

If a high standard is maintained during design and construction, and if the entire courtyard and its surroundings are well developed, with a good marketing strategy, the project should be a big success," he said.