Investment Outlook

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In late January the CRE Special roundtable was held, and one of the participants of this event was Aram Petrossian, Chief Financial and Investment Officer for AVICA Property Investors.

The roundtable brought together leading experts of the commercial real estate market. According to the participants of the discussion at CRE Special, in 2014 the key market players will be banks and large private investors. One of the most important trends of the year will be the rapid influx of pensions fund on the investment market.

Aram Petrossian, Chief Financial and Investment Officer for AVICA Property Investors, said that the success of a retail project can be directly evaluated based on tenant sales per square meter.

“The better they sell, the higher the retail center can set lease rates. In the case of a devaluation of the ruble, retailers trading in rubles will immediately see lower sales if calculated in hard currency. In the case of a major devaluation, lease rates denominated in US dollars or euro could exceed retailers’ capacity to make payments due to lower sales and operating profit,” Petrossian believes.

Romanov Property Holdings Fund

AVICA Property Investors manages Romanov Property Holdings Fund (RPHF), which was established in 2008 on a parity basis by RD Group and a consortium of private investors led by Ruben Vardanyan.

RD Group has always invested from scratch its own development projects, and Romanov Property Holdings Fund (with RD Group as a shareholder) was specifically created for the purpose of acquiring functioning Class A commercial properties on the Russian market.

Today RPHF’s portfolio includes the Romanov Dvor business center, the OBI Borovskoye hypermarket as well as the Vremena Goda and Dream House shopping centers. The cumulative GLA of these properties exceeds 100,000 square meters.