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. Last Updated: 07/27/2016

RBI Announces Plans for $500M Spending

ST. PETERSBURG -- RBI holding company plans to spend $500 million on acquiring land plots in the country's regions over the next two years, a senior company official said at a news conference last week.

To date, RBI has focused on development projects in St. Petersburg, selling premium-class premises under the RBI brand and midrange premises under the Severny Gorod brand.

"Over a five-year period we should be able to carry out projects of any scale in any location," Eduard Tikhtinsky, chairman of the board of RBI holding, said Wednesday at news conference on the company's strategic goals.

In the near future, RBI will focus on Moscow, St. Petersburg, Kiev, Yekaterinburg, Perm, Nizhny Novgorod, Tyumen, Ufa and Almaty in Kazakhstan. RBI will use its own financial resources as well as those of its business partners, Deutsche Bank and shareholder Morgan Stanley.

In addition to expanding its regional presence, RBI will also begin developing new types of projects as well as the premium-class and midrange residential complexes it is already working on. These will include business and shopping centers and multipurpose complexes combining commercial and residential areas.

To deploy its more ambitious operations, the company has employed a large number of new managers with experience working in large companies with regional branches.

Around 50 percent of the company's senior management currently comprises newly appointed staff, Tikhtinsky said. They were sourced from a number of large firms, including oil company TNK-BP, regional power generator TGK-1, Struktura Development and Becar real estate agency.

"New market segments and new regions will allow us to find new opportunities. We're not interested in logistics complexes and hotels. We've chosen market segments that are still underdeveloped," said Mikhail Voziyanov, vice president for strategy and investment at RBI. "We have been looking for cities with maximum potential for residential real estate, attractive prices and good prospects."

Cities with large populations are equally attractive for the development of business centers, he added.

The company's managers believe that, with the exception of Moscow, their products will be unique for the country's local markets.

Tikhtinsky added that, as well as acquiring land plots, the company would also consider joint ventures with local developers and landowners.

Polina Yakovleva, head of the elite real estate department at Knight Frank in St. Petersburg, said the regions chosen by RBI were attractive investment prospects, with oil-producing regions offering particular promise.

RBI is unlikely to suffer from competition in the regions, Yakovleva said.

Since 2006, RBI has invested over $100 million into new projects. The company has acquired 40 hectares of land -- four land plots in St. Petersburg and one land plot in the Leningrad region. In these locations, RBI plans to construct 250,000 square meters of residential space and 50,000 square meters of commercial sites.