Russian property company DS Development, part of the Don-Stroy real estate and construction group, has placed the Shchuka Shopping Centre in north-west Moscow on the market for $344m (€258.6m).
According to local sources, Don-Stroy as recently as six months ago rejected approaches from investors to buy the 43,000 m2 asset, which opened in June 2007.
Russian investment bank Renaissance Capital estimates with average rents of $800-$1,000 per m2 a year, the property is priced at a yield of 10%-12.5% but investors are now likely to demand yields of more than 15%.
Over the past 12 months, yields for retail real estate have shot up from a low of around 8% in 2007 as the credit crunch has bitten into the property sector.
DS has several other projects under construction or recently completed in the city, including shopping centres Sokolniki, Begovaya Street, Pyrieva Street and Izmaylovskiy two of these are also reportedly for sale.
Buyers of Russian property have dwindled over the past year. Thomas Lindeborg, managing director of London & Regional Properties, Nordic and Russia, said that he was waiting for prices to fall further before buying back into the Russian market.
DS’s ambitious development programme includes two major mixed projects: the Zvenigorodsky complex, a 490,000 m2 office, retail and entertainment centre and a business centre on Oruzheiny Pereulok in Moscow’s Garden Ring area.
? Investment bank Fairfax Middle East is planning a $500m sharia-compliant Russian property fund that will raise cash from sovereign wealth funds and family trusts in the Middle East to invest in large-scale residential and commercial developments in the major cities of Russia.
