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Singapore
invests in Moscow region
Max Delany
The Moscow Times
22 Jan
08
http://www.themoscowtimes.com/stories/2008/01/22/041.html
The
planned design for the 114-hectare Yaroslavsky housing
development in the Moscow region town of Mytishchi.
The
Singapore government's real estate investment fund on Monday
announced it was taking the plunge into the Russian market,
putting $233 million into a project with leading developer PIK
Group to build a self-contained neighborhood in the Moscow
region.
GIC Real Estate, part of the Government of
Singapore Investment Corporation, said in a statement that an
affiliate company had acquired a 25 percent stake in the mammoth,
114-hectare Yaroslavsky development in the town of Mytishchi,
northeast of Moscow.
The project will see the construction
of an entire neighborhood, including 50 high-rise apartment
blocks, 13 commercial buildings, five elementary schools, seven
kindergartens and two hospitals.
The development will be
completed by 2013 and should eventually offer housing for about
50,000 residents, statements by the two companies
said.
According to an appraisal conducted by CB Richard
Ellis at the start of the year, the site, one of PIK's largest
development locations, currently has a pretax market value of
over $1.3 billion.
The move into the Russian market by GIC
Real Estate comes amid a rapid growth in trade between Singapore
and Russia. According to Singapore's Moscow Embassy, bilateral
trade increased by 43 percent to $1.89 billion in 2006, from
$1.32 billion in 2005.
Singaporean business involvement in
Russia ranges from real estate to food and consumer electronics.
Last year, Singapore real estate firm City Developments teamed up
with firm Soft Proyekt to launch a $125 million joint project to
invest in hotels in Moscow.
Since its inception in 1981,
the Government of Singapore Investment Corporation, which manages
the Southeast Asian country's foreign currency reserves, has
swollen to well over $100 billion, making it one of the world's
largest investment management funds.
GIC Real Estate's
current portfolio stretches from Shanghai to Chicago and includes
a shopping center outside London, office blocks in South Korea
and tower blocks in Germany. The firm is among the top 10 global
real estate investment funds, with more than 200 investments in
30 countries.
"This investment provides GIC Real
Estate with a strong entry into the Russian real estate market,"
Seek Ngee Huat, president of GIC Real Estate, said in a
statement.
"We believe in the potential of the
market," he said.
Talks between PIK and GIC started
last spring and were unaffected by the summer's credit crunch,
said Viktor Szalkay, head of investor relations at PIK.
"We
believe that Russia is a safe haven," Szalkay said.
In
June, PIK listed on the London Stock Exchange, in what was
Europe's biggest real estate flotation last year. The deal to
link up with a giant such as GIC represents a leap forward for
the Russian firm, Szalkay said. "This sets a new level for
the company internationally," he said. "These guys are
really solid."
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