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. Last Updated: 07/27/2016

Clover Unveils Plan for New Complex

The company plans to raise $3.5 billion on capital markets to replicate similar projects across Russia.

The 315,000-square-meter Clover Plaza will be built on a 7.8-hectare site formerly occupied by the Severny Zavod industrial plant. The complex will comprise a 72,000-square-meter Class-A business center, elite residential areas spreading across 90,000 square meters, and a 30,000-square-meter shopping and entertainment area. It will also include a conference hall, a parking lot, a 150-room, four-star hotel and a 120-room apartment-hotel.

"We have already completed several complexes of this type, and we think this solution is the best one available," said Alexander Popov, general director of Clover Group.

Construction of the complex will start this year and is due for completion by 2011. Popov expects to enter a payback phase on the investment within six to seven years.

The hotels will most likely be operated under the Holiday Inn brand, Popov said. Clover Group signed agreements on strategic partnership with Rezidor and Intercontinental Hotels Group.

St. Petersburg's hotel market is important for IHG because of a continued shortfall in supply, said Michael Cooper, vice president of Intercontinental Hotels Group.

"Intercontinental has made a long-term commitment to development in Russia. We are looking to cooperate closely with Clover Plaza for the next six to seven years," Cooper said.

IHG is already developing two Holiday Inn hotels in St. Petersburg, with four hotels already open in Moscow.

In total, Clover Group plans to develop 1.5 million square meters of commercial and residential space and over 1 million square meters of premium and business-class housing in the country's 29 largest cities. By 2015, the company is expected to increase its capitalization to $7.5 billion.

As well multifunctional centers under the Clover brand, the company also plans to develop Ya Igrayu family centers, Vitrina shopping and entertainment centers and a number of residential projects. The company has already completed three multifunctional centers - in Nizhnevartovsk, Vladivostok and Rostov-on-Don.

"At the moment, 16 projects are under way in 13 cities," Popov said. Clover Group will soon start the construction of multifunctional centers in another 13 cities. They will comprise Class-A business centers, shopping-and-entertainment areas, residential areas and hotels.

In St. Petersburg, the company will construct four hotels, including two apartment-hotels. The apartment-hotels will be situated on Galernaya Ulitsa and on Naberezhnaya Admiralteiskogo Kanala respectively with the other two hotels located on the Ushakovskaya Naberezhnaya.

Yury Borisov, managing partner of IB Group and president of the Guild of Developers and Managers, was positive that multifunctional complexes could still attract investors.

"Stable, long-term investment in one project is an advantage when one considers the level of competition for investment in St. Petersburg," Borisov said.

With large projects, investors spend less on bureaucratic procedures and approvals, he added.

The complex unveiled last Tuesday will benefit from its location in the developing business area between Petrovsky Fort, the city center, the President business center and the Ushakovskaya road junction.