|
The first six months of 2007 were marked with a stable growth in investment activity in the St. Petersburg market for commercial property. Large investment funds such as Afriсa Israel Investments (Northern Properties), CA Fastigheter, Morgan Stanley and Sponda made a number of major transactions. The companies Capital Land, Europolis, Gemolab Group, Invesсo, ORCO Group, Plaza Centers, Raiffeisen Evolution, TriGranit Development Corporation and others announced their intentions to invest in real estate. The confidence of investment funds in the stable development of the St. Petersburg commercial property market has strengthened. An obvious lack of ready-made high-quality properties is forcing the funds to invest in development projects.
Investment risks continue to decrease, causing stabilization of capitalization rates. For the first six months of 2007, these rates reduced by 0.5% - 1 % in all sectors of the market. The current capitalization rates for high-quality commercial properties are as follows:
Offices - 9 %
Shopping centers - 9.5 %,
Warehouses - 10 %.
Office and shopping properties are of great interest to investment companies and funds. In the warehouse sector, the demand is still much higher than the supply.
The international rating agency Standard & Poor's has revised St. Petersburg's rating outlook from "stable" to "positive", while affirming its "BBB-" long-term credit rating.
Thus, the stable development of all sectors of the St. Petersburg commercial property market has been a continuing trend. Among the new trends that should be mentioned is an interest in the development of multi-functional properties and business parks, as well as further re-development of industrial territories in the central part of the city, encouraged by the city's administration.
Table 1. Major Development Projects
|
Properties | Brief Description
| Amount of Investments
|
|
Frunzensky Department Store
|
A 65 000 sq. m. complex to be built at the place where the former department store was located. The project includes class A offices, shopping space and a parking lot for 500 cars. The owner is JFC, the operator is BusinessLink Development.
|
$ 130 - 150 million
|
|
Logistics Centre at intersection of Vyborg Highway, Gorskaya Highway and Ring Road
|
This project provides for accommodation of customs posts, a logistics centre, a business centre and other commercial properties. The site is 60 ha in size. Construction works are carried out by the corporation Sterkh. |
$ 24 million |
|
Apraksin Dvor
|
Comprehensive development and reconstruction of the Apraksin Dvor territory. The size of the site is 14 ha. The investors are Ruric AB and Glavstroy.
|
n. a.
|
|
Warehouse on the Moscow Highway |
The company AKM will start the construction of a class A warehousing complex with a total area of 165 000 sq. m. on a 32.8 ha site.
|
n. a. |
|
Nikolsky Marketplace at 62 Sadovaya
|
Construction of a multifunctional complex with a total area of 50 000 sq. m., including a 4-star Holiday Inn hotel (chain of InterContinental Hotels Group), office and shopping properties. The owner is ZAO Nikolskiye Ryady. |
$ 120 million
|
Table 2. Large Investment Deals
|
Properties | Brief Description
| Deal Amount
| Acquirer
|
| Business centre Inform Future |
A class B complex with total area of 3 700 sq. m. |
€ 4 million |
Sponda Russia Oy Ltd |
|
Business centre Griffon House
|
A class B+ business centre with total area of 11 000 sq. m.Gross leasable area is 3 500 sq. m.
|
n. a.
|
Northern European Properties Limited (NEPR)
|
|
Hotel on Vasilievsky Island
|
A hotel with a total area of 29?000 sq. m. and 302 rooms integrated into "Near Rostral Columns" complex. |
€ 82 million |
Northern European Properties Limited (NEPR) |
|
