Russian investment bank Otkritie Financial Corporation is in talks to acquire an $800m (€576m) Moscow property portfolio from local developer Horus Capital.
The deal would show a new benchmark yield for class B space in the Russian capital in this cycle of below 11% on closing.
The five offices that the buyer is acquiring – Fabrika Stanislavskogo, Gamma, Avion, Krugozor and Lefort – are all in greater Moscow and are refurbished former industrial real estate assets.
The properties total almost 190,000 m2, of which around 160,000 m2 are leased. According to local sources, the property, is “good-quality space that is let at good market rents”.
Horus and Otkritie declined to comment on the deal. A Moscow source familiar with the transaction said: “It’s a good investment for Otkritie as it is taking on the $600m debt on the buildings, which was negotiated with German bank Aareal on pre-crisis terms. The debt has another four or five years to run and you certainly wouldn’t get these rates now.”
The purchase is another signal of Russian property market resurgence. Reading the market runes, international investor and developer Hines is now prepared to consider offers for its prime office asset Ducat Place III in the historic part of Moscow.
Completed in 2006, the 14-story, Class-A office building is located close to the intersection of Tverskaya and the Garden Ring. Tenants in the 33,251 m2 project include Boston Consulting Group, Citibank, Clifford Chance and Goldman Sachs.
Moscow sources say that Hines is hoping to achieve a yield of below 9%, which would set a new level for a prime asset in this investment cycle.
The last office investment deal in the city of any significance was in July 2008, when London & Regional Properties sold Ducat Place II to Finnish investment company Sponda for $185m (€136.4m). The transaction reflected a yield below 9%.
Another positive piece of news is the resumption of active marketing of the K2 Business Park project on the Kaluzhskoe highway by co-investors Marbleton Property Fund and Storm Properties. The first stage construction of the project is planned to commence in spring 2011.
Horus Capital was founded in 2003 by Alexey Blanin. Its strategy was to concentrate on the massive – and mostly defunct – inner-city industrial landbanks in the company’s Moscow property portfolio.
Otkritie Financial Corporation is one of Russia’s biggest banking groups. It offers a range of investment banking, commercial banking, brokerage and investment services.
