News

Raven Russia to buy owner of Moscow shed project

News

Estates Gazette

28 February 2011

Industrial, Investment/finance

The Southgate project comprises a completed grade-A warehouse complex of 76,550 m², which is 88% let to John Deere, and 88 ha of consented land capable of producing a further 440,000 m² of logistics space.

Karta Realty is majority-owned by two limited partnerships, one registered in Delaware and the other in England and Wales, and is managed by Cypress Grove International, advised by Renaissance Capital.

Raven Russia said the gross value of Karta Realty’s property and land is $99.3m. Existing debt facilities of some $43.5m with Unicredit will be acquired with the group. The facilities are for a five-year term from December 2006 with a margin of 650 basis points over US libor.

Terms to roll over the facility for a further five years have been agreed with Unicredit, reducing the margin to 430 basis points over US libor on meeting letting targets.

The yield for the purchase price is estimated at around 13.7% on the completed property on a capital value of $840 per m². Net operating income on the let space generates $6.4m a year.

Raven Russia will fund the acquisition by issuing up to 25.9m ordinary shares in Raven Russia and the balance in cash.

Conditions agreed with the vendor include the right of a minority shareholder group to match any formal offer for Karta Realty made by a third party.

If this right to match is exercised within 30 business days after the signing of the sale agreement, then CGI will be obliged to sell Karta Realty to the minority shareholder group.

Raven Russia will announce its results for the year to 31 December 2010 on 14 March. Glyn Hirsch, Raven’s chief executive, said: “This consolidates our position as the major owner and supplier of grade A Logistics Warehouse space in Moscow. With this, coupled with our existing Moscow permitted land holdings, we now have the ability to bring almost 500,000 m²of completed space into the tightly supplied market.”

Logistics specialist Raven Russia has agreed to pay $54.5m (€39m) for Karta Realty, the owner of the Southgate warehouse project in the Domodedovo district of southern Moscow, close to the international airport. The Southgate project comprises a completed grade-A warehouse complex of 76,550 m2, which is 88% let to John Deere, and 88 ha of consented land capable of producing a further 440,000 m2 of logistics space. Karta Realty is majority-owned by two limited partnerships, one registered in Delaware and the other in England and Wales, and is managed by Cypress Grove International, advised by Renaissance Capital. Raven Russia said the gross value of Karta Realty’s property and land is $99.3m. Existing debt facilities of some $43.5m with Unicredit will be acquired with the group. The facilities are for a five-year term from December 2006 with a margin of 650 basis points over US libor. Terms to roll over the facility for a further five years have been agreed with Unicredit, reducing the margin to 430 basis points over US libor on meeting letting targets. The yield for the purchase price is estimated at around 13.7% on the completed property on a capital value of $840 per m2. Net operating income on the let space generates $6.4m a year. Raven Russia will fund the acquisition by issuing up to 25.9m ordinary shares in Raven Russia and the balance in cash. Conditions agreed with the vendor include the right of a minority shareholder group to match any formal offer for Karta Realty made by a third party. If this right to match is exercised within 30 business days after the signing of the sale agreement, then CGI will be obliged to sell Karta Realty to the minority shareholder group. Raven Russia will announce its results for the year to 31 December 2010 on 14 March. Glyn Hirsch, Raven’s chief executive, said: “This consolidates our position as the major owner and supplier of grade A Logistics Warehouse space in Moscow. With this, coupled with our existing Moscow permitted land holdings, we now have the ability to bring almost 500,000 m2 of completed space into the tightly supplied market.”