LSR may build a hotel on the site of the traction substation / E. Kuzmina / Vedomosti

Hotelier LSR. 5 100 square meters

This is the area of the four-story building on the corner of Nevsky Prospect and the Fontanka River Embankment, which the St. Petersburg government transferred to the Avtokombalt company for reconstruction as a hotel in 2005. In 2011, LSR acquired Avtokombalt, which was implementing the apart-hotel project, and completed construction this year.

LSR Group

A diversified construction company. Shareholders: Andrey Molchanov (62%), management (5%), 33% in free float. Capitalization (LSE) - $2.37 billion. Financial indicators (2012, IFRS): Revenue - 61 billion rubles, EBITDA - 13.3 billion rubles, Net profit - 4.9 billion rubles.

The Federal Antimonopoly Service (FAS) has granted the request of the LSR Group (its main owner is Andrey Molchanov) and has given preliminary consent to the acquisition of 100% of the shares of Royal Gardens Hotel LLC, the service said in a statement.

The company's only known project is the reconstruction of a traction substation building on the Fontanka River Embankment, 3A, next to the Bolshoi State Circus, into a hotel. This building is located near Nevsky Prospect and the Mikhailovsky Castle.

Royal Gardens Hotel LLC is an investment partner of Gorelectrotrans State Unitary Enterprise. In 2009, the St. Petersburg government issued the State Unitary Enterprise a resolution on the design and reconstruction of a building on a 1,871 sq. m. site on Fontanka Embankment, 3A, into a hotel complex. According to the agreement with Gorelectrotrans, Royal Gardens Hotel LLC must reconstruct three traction substations, as well as lay and replace 20 km of cable networks, after which it will receive the right to build a hotel, a source in Gorelectrotrans State Unitary Enterprise said. The cost of fulfilling the investment conditions, according to him, is 400 million rubles, some of the work has already been completed, they should be completed in December of this year, and the hotel was planned to be built by 2016, the source adds. This agreement is beneficial to Gorelectrotrans, explains the interlocutor of Vedomosti: investments are needed to improve the state of the State Unitary Enterprise's economy.

Representatives of LSR and Royal Gardens Hotel LLC declined to comment yesterday. According to SPARK-Interfax, the co-owner of this company is Nikolai Sergeenko, the former CEO of Vasily Sopromadze's Corporation S, which owned several luxury projects in the historical center of St. Petersburg. The Royal Gardens Hotel has not yet begun construction work, says a source close to the investor. One of the company's partners believes that the project has been delayed: it is too complex and expensive, and the conditions are onerous, so the investor could feel that he cannot cope and refuse. Another source familiar with the investor believes that FAS approval does not mean that the deal will take place.

The apart-hotel project on the Fontanka River Embankment, 3, involves the construction of an apart-hotel with a total area of 8,700 sq. m, of which 4,600 sq. m will be for 25 apartments, 1,430 sq. m will be allocated for underground parking for 45 cars, and another 700 sq. m will be for offices, according to a presentation by Renord-Invest. This presentation is in a saved copy of the page on the Renord-Invest website. It is not clear from the presentation what relation this company has to the Royal Gardens Hotel. A source close to the investor calls Renord-Invest a partner of the Royal Gardens Hotel in equal shares, without mentioning the essence of the partnership. A representative of Renord-Invest declined to comment.

Initially, the cost of the project was estimated at $50 million, taking into account the fulfillment of all investment conditions and the construction of the hotel, says a source familiar with the project. According to the general director of Colliers International St. Petersburg, Andrey Kosarev, investments in the hotel could amount to $20-25 million. The site is located in the very center, where elite housing is most in demand, and since it cannot be built on this site, placing an apart-hotel is the most optimal option for the investor. He believes that the average cost of 1 sq. m. in future apartments could amount to 600,000 rubles.

LSR invites you to Fontanka