International "Rosevodovelopment"

Altarea has acquired the share of the Russian developer of the French company Altarea and the special situational fund Morgan Stanley Real Estate Special Sitations Fund III, owned by the Morgan Stanley investment company, became the owners of the Russian company Rosevrodvelopment. The company became the first in the sector of the Russian development, where direct foreign investment went, and the first, where they reached a significant share - 40%.

Earlier, foreigners bought a development business only during IPO (Open Investments and System-Clates). The fact is that this sector is greatly dependent on the administrative resource, which scared foreign investors. Now fear has passed, analysts believe.

In July of this year, Morgan Stanley Real Estate has already acquired about 10% of the company’s shares, leaving the right to double the share by the end of the year. However, now a new partner was involved in the transaction - the development structure of Altarea, which owns the 8.8% Morgan Stanley Real Estate. According to the French side, the amount of the transaction is 28 million euros.

The company "Rosevrodvevelopment" specializes in projects in the field of commercial real estate. Currently, the company is building shopping and entertainment centers in eight regional centers. The total area of projects is 1.3 million square meters. The main owners of the "Rosevrogroups" are individuals: Sergey Grishin, Andrei Suzdaltsev and Ilya Brodsky.

Altarea CEO Alan Taurall explained that investments in the Russian company were the first investment of the French structure in Russia. “We see the significant prospects of your real estate market and believe that the level of profitability here will be much higher than in Europe,” he shared. By adding that the agreement on the acquisition of a share in Rosevrodovelopment will provide Altarea with an excellent opportunity to gain a foothold in the Russian market. According to Ivan Sitnikov, the general director of Rosevrodovelopment, the deal with the French developer will allow the Russian company to strengthen its position in the field of trading real estate management.

Rosevrodovelopment began to be sold in October 2005: the Citigroup Venture Capital and the German DTB acquired about 38% of the shares of the national logistics company, which is a structural unit of the Russian developer. In December 2005, Rosevrogroup sold the Raven Russia British Foundation first of all Krekshino’s Logo Park for $ 110 million. The development business interested foreign buyers only this spring: the American investment fund under the control of Moore Capital bought a share of 20% of the company. Behind him came the structures of Morgan Stanley. There are still few other examples of buying a Russian development business: after acquiring a share of Rosephevlopment, Moore Capital, the share of the Petersburg developer RBI acquired Deutsche Bank. Until now, foreign investors have preferred to invest in commercial real estate management or finished objects - this business seemed more transparent and understandable to them. But experts believe that further the process of acquiring development business will go by foreigners with an accelerated pace.

“The acquisition of a share of Russian development companies today is a very promising topic: several such transactions are now taking place now,” said Konstantin Demetriu, director of the Department for attracting investment in Russia and the Jones Lasalle CIS. “The interest of investors in the Russian trade real estate is not limited to ready -made, income of projects, but applies to development,” adds the head of the DTZ investment department Stefano Karozi.

Ivan Sitnikov explains that in the regions there is an acute deficiency of infrastructure, and this makes the commercial real estate market outside the Moscow Ring Road extremely attractive for Western investors. And Blackwood managing partner Konstantin Kovalev believes that in two to three years a massive exit of foreign institutional investors to the Russian development market.

12.12.2006 / Denis Pokulov, the material was published in the newspaper No. 229 dated 12/13/2006.