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The BIN group buys 2,400 hectares of land in New Moscow from ex-senator Vadim Moshkovich. There Moshkovich was going to build 20 million square meters. m of housing for $60 billion, but only the twentieth part of the project could be agreed upon.

Deal of the year

The BIN group of the Shishkhanov-Gutseriev family announced the purchase from ex-senator Vadim Moshkovich of the Avgur Estate and A101 Development companies, which own 2.4 thousand hectares of land near the village of Kommunarka in New Moscow, BIN reported yesterday. The deal could be closed within a few months after receiving FAS approval and “completing the necessary procedures,” BIN said in a statement. The group will also receive legal entities that are engaged in construction, preparation of technical and design documentation, sale and operation of real estate on the territory of New Moscow, the press release says. The Wall Street and Camelot business centers, as well as the charitable project of a private school in New Moscow, Letovo International School, worth $100 million, will remain with Moshkovich.

“The decision to sell the company was made in connection with the strategic decision of the Federation to focus on the development of agricultural business,” Vadim Moshkovich is quoted as saying in the BIN message. “We are considering a number of large projects for mergers and acquisitions, development of production facilities, including in the Far East, and entry into foreign markets.” According to Moshkovich, the decision to focus on agriculture is due to “strengthening the priority of import substitution as a driver of the country’s economy.” Therefore, it is in this direction that the main investments will be concentrated.

In December 2014, Moshkovich, who ranks 47th on the Forbes list of richest businessmen with a fortune of $1.9 billion, left the seat of a member of the Federation Council from the Belgorod region, which he had held since 2006. At the end of May 2015, he headed the board of directors of the Rusagro holding company he owned, taking over the operational management of the company.

Co-owner of BIN Mikail Shishkhanov, whose words are also quoted in the group’s message, noted that the purchase of the A101 project “strengthens the company’s presence in the capital region and the segment of affordable and comfortable housing.” “The acquisition of the A101 project will allow us to effectively complement the competencies of Inteko JSC and Patriot Group of Companies (part of Inteko) in the field of construction of housing of all categories: premium, business, comfort and economy class,” the message adds.

According to a source close to the Shishkhanov-Gutseriev group, interest in the development assets of Vadim Moshkovich is due to the fact that the group was previously poorly represented in the economy-class housing segment in Moscow. Land within the old city boundaries is too expensive for the implementation of economy class projects, and the purchase of the Augur Estate project in New Moscow is an ideal option for development in this direction, says RBC’s interlocutor. The project developed under Moshkovich, according to him, will not be reformatted - it will still be the same economy class.

As a result of the transaction, BIN will become the largest landowner in New Moscow. Second place is occupied by the family of the governor of the Tula region, Vladimir Gruzdev, with a land bank of 1 thousand hectares; other large land owners in New Moscow are also the development companies Absolut and Morton.

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Blackwood partner Konstantin Kovalev, based on the density of possible development, estimates the cost of the purchased land fund at $2 billion.

According to Sayan Tsyrenov, director of the capital market department at Colliers International, the transaction to purchase A101 Development is so far the largest in the residential real estate market at the end of the year.

“In five years it will become clear who won: the buyer or the seller. But in general, during a crisis, it is profitable to get rid of an asset if it is sold at an adequate price,” says Konstantin Kovalev from Blackwood.

Land with history

Vadim Moshkovich bought land in the Kommunarka area back in 2004. In 2012, these territories were included in the capital, and Moshkovich became the largest landowner in New Moscow. The entrepreneur planned to build up to 20 million square meters on this site. m of residential and commercial real estate. Last year, the general director of A101 Development, Andrei Donskikh, said in an interview with the Vedomosti newspaper that investments in the project over 20–25 years could amount to $60 billion. However, so far only a small part has reached implementation: the territory planning project was approved only in January last year. The planning project provided for the construction of about 1 million square meters. m of housing and more than 706 thousand sq. m. m of non-residential stock. Currently under construction are the residential complexes “Moscow A101”, “Green Line”, “Spanish Quarters A101”, townhouse villages “Kronburg” and “Vyazemskoye” with a total area of over 1 million square meters. m.

As Andrey Donskikh explained to RBC, the speed of implementation of the company’s project in New Moscow was affected by the change in the status of the territory. “The region developed some rules, but they turned out to be inapplicable in Moscow,” he said. “And in 2012, it became more difficult to obtain project approval documents, since the general plan of New Moscow has not yet been adopted.”

Donskikh believes that after the sale of the project to the BIN group, approvals can go faster: “Inteko and Patriot have extensive experience in developing large territories.” However, according to him, there were other contenders for A101 Development in addition to the BIN group. He declined to name them.

Colliers International CEO Nikolai Kazansky considers this explanation of the deal likely: “Perhaps the Moscow authorities did not agree with Moshkovich on the volume of construction that he expected. Therefore, the owner decided that it was better to sell the company.”

Moshkovich and Shishkhanov are old acquaintances. Back in 2008, Moshkovich was going to purchase 99% of the shares of B&N Bank from Shishkhanov. Analysts assumed that the amount could be $1 billion. “I am interested in the banking business itself and the prospects for its growth,” Moshkovich told RBC. He needed the bank, in particular, in order to develop mortgage lending for the A101 development project. Experts then associated Shishkhanov’s desire to sell the bank with the problems of Mikhail Gutseriev’s Russneft company, to which tax claims were filed. However, in May 2008, it became known that Shishkhanov had changed his mind about selling the bank, and Vadim Moshkovich ultimately had to receive a penalty.

Building economy-class housing in Kommunarka, in New Moscow, is now very promising, says Tatyana Kalyuzhnova, head of IRN-Consulting. “This is a project near “old Moscow”, not far from the Moscow Ring Road, and in addition, a metro will be built there,” she says. “The demand for these projects is very high.” According to Kalyuzhnova, the average price per square meter in this location is about 130 thousand rubles.

New owner of New Moscow