The developer RD Group has officially announced the creation of the investment fund Romanov Property Holdings Fund, which in the third quarter of 2013 completed the purchase of the luxury class shopping center Vremena Goda. The deal was executed by the fund’s management company AVICA Property Investors.
Romanov Property Holdings Fund (RPHF) announced the purchase of the Vremena Goda center in the third quarter of 2013. Vremena Goda is Moscow’s top shopping center among the affluent, a study by the real estate portal Arendator.ru indicated.
The transaction resulting in full ownership of the property being transferred to Romanov Property Holdings Fund. The amount of the deal has not been disclosed. In the second quarter of 2012 a 40% stake in the shopping center was purchased. The deal was brokered by the real estate investment management company AVICA Property Investors.
Romanov Property Holdings Fund, a direct property investment fund, was created in 2008 on a parity basis by RD Group and a consortium of private investors led by Ruben Vardanyan, and it specializes in investment in premium class real estate in Moscow. At present the fund’s assets, in addition to Vremena Goda, include the Romanov Dvor business center, the specialized shopping center Dream House and the OBI Borovskoye hypermarket. AVICA Property Investors manages the fund’s assets, which in 2013 were estimated to exceed $1 billion. The internal rate of return (IRR) from 2008 to 2013 has been approximately 20%. EBITDA has increased fourfold over this period.
DIRECT QUOTES
“RD Group has always invested from scratch in its own development projects. At the same time, one of our top priorities is to development the subsidiaries of our company. In 2008 for the purpose of acquiring functioning Class A commercial properties on the Russian market the Romanov Property Holdings Fund was created, with RD Group participating as a shareholder,” commented Gagik Adibekyan, Chairman of RD Group.
“The share of vacant retail space in Moscow is approximately 2.5%, which is substantially less than in certain European capitals. The capitalization rate for luxury class retail real estate in Russia exceeds the analogous European figures by more than twofold. Many assets are fundamentally undervalued and have potential for growth in value, which is generating substantial interest among Russian and international investors. AVICA Property Investors possess the necessary expertise in the real estate sector and investment banking business to provide effective solutions for asset acquisition, value maximization and exit strategy,” commented Mark Stiles, President and CEO of AVICA Property Investors.
“Since the moment of its establishment, Romanov Property Holdings Fund has demonstrated positive growth thanks to the strategy selected. The core investment principle of our business is the acquisition of functioning premium class office and retail properties which generate stable revenue flow and have growth potential. AVICA Property Investors’ strategy for increasing value includes optimization of property management, expansion of GLA and improvement of tenant pool in parallel with institutionalization of leased premises. We continue to implement this approach and anticipate growth in key indicators for RPHF in 2014,” noted Aram Petrossian, Chief Financial and Investment Officer for AVICA Property Investors.