Ivanhoe Cambridge has made its debut in the vibrant Moscow real estate market.
The Canadian investor paid around $500m (€378.9m) for the Vremya Goda shopping centre in a deal that sets a new 9% benchmark yield for the Russian capital, say sources.
The 66,000m2 project, which is in the final stage of construction, is due to open in June and is leased mostly to luxury retailers paying top rents of up to $750 per m2.
The purchase comes just after Rodamco Europe’s first Russian buy two months ago. The Dutch investor paid €200m for a 50% stake in Moscow’s Metropolis centre at a 9.6% yield.
Yields in the city are set to tumble yet further in the next few months as a result of competition among international investors for scarce investment product of a suitable quality.
Faster rate of compression
Yield compression is taking place at a much quicker pace than that of the past couple of years in the emerging central European countries of Poland, Czech Republic and Hungary.
Ivanhoe Cambridge said it had been looking at Moscow for some time but would not comment on the transaction’s completion.
Ivanhoe Cambridge is active in the US, Asia and Europe, where it co-owns a number of properties with real estate partners. Its portfolio also includes a number of major shopping centres in Warsaw, Berlin, Madrid and Scotland.
The company is presently negotiating a sale of its 69,700m2 Wola Park retail scheme in Warsaw for around €150m, at a yield of 5.5-6%.
Headquartered in Montreal, Ivanhoe Cambridge is a real estate subsidiary of the Caisse de dépôt et placement du Québec, a leading institutional fund manager in Canada. Other shareholders of the company include four major Canadian pension funds.
The vendor of Vremya Goda is a consortium of wealthy industrialists with commercial development experience in the city.
