Moscow Commercial Real Estate Rebounding

The size of investments in the domestic real estate market grew 128 percent last year to reach almost 2.2 billion euros ($3.1 billion), as economic stabilization after the crisis encouraged foreign and local investors, a survey said Monday.

Although the overall transaction volume remained low compared with the pre-crisis level, Russia outperformed other countries in Central and Eastern Europe and mainstream investors are expected to return to the market in the future, CB Richard Ellis said in the report.

Russia saw a total of 27 deals last year, compared with 22 in 2009, with an average transaction volume accounting for 80 million euros, almost twice as much as in 2009.

According to the report, the stabilizing of the domestic economy, which grew 4 percent last year, resulted in increasing investors' confidence.

"The results of 2010 showed a significant increase in the investors' confidence of the stability of Russia's real estate market," said Christopher Peters, head of research at CBRE.

Blackstone eyes Moscow Real Estate

Plain-vanilla leveraged buyout deals in the United States are "pricey," Blackstone's chief operating officer Tony James told analysts on a conference call. He is instead searching for opportunities in energy, emerging markets and in providing growth capital to small companies.

Blackstone's international push saw it expand into Istanbul and establish a "small beachhead out of Moscow" during the first quarter, James said. Blackstone has one person operating in Russia, he said.

"We've been flirting with Russia for three years," said James. "I don't know how many times I've sat through traffic in Moscow to try to figure the place out."

James said the country is "a bit inscrutable ... but we're open-minded about opportunities there".

Still, James said it was important to be "very careful" in the country despite Russia benefiting right now from high energy prices.

"It is a market that is capital-constrained," James said. "Done right, it has potential to have some interesting returns, but we all have the obvious questions about the transparency."

Swedish investment firm closing its Russia real estate fund

Stockholm-based investment company East Capital Explorer has decided to close its real estate fund for Russia as the unit has received no investments since it opened in July 2008.

When the global financial crisis broke out, the company, whose area of operations is Eastern Europe, decided to keep its Russian Property Fund in place “until the price fall would stabilise” yet it has proved impossible to “realise our initial investment strategy within a reasonable timeframe,” an East Capital Explorer press release cited Kestutis Sasnauskas, chief executive of East Capital Private Equity, was saying.

“We still consider real estate an attractive sector for investments and… will pursue alternative ways to get exposure to the sector,” said the chief executive of East Capital Explorer, Gert Tiivas.

Key Executive Appointed to Moscow/ Russia Real Estate Fund Hotel JV

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