01 Properties seals another major Moscow office buy

01 Properties has sealed another major investment in Moscow's office market by acquiring the office part of Legenda Tsvetnogo multifunctional complex.

Already one of the largest office owners in the Russian capital, 01 Properties acquired over 40,000 m2 of office accommodation and 401 parking spaces at the complex at the corner of Tsvetnoi and Rozhdestvensky boulevards in Moscow.

Jones Lang LaSalle acted as a consultant in the transaction. Russia’s Capital Group was the developer of Legenda and vendor of the office component. The financial details were not disclosed but Jones Lang LaSalle described it as the second-largest office deal by volume in Russia during 2013.

In November, Millhouse, an investment vehicle mainly owned by Roman Abramovich, the billionaire owner of Chelsea Football Club, completed the acquisition of the 64,000 m2 White Gardens office complex in Moscow for around $800 mln (€593 mln). During late December 2012 and early 2013, O1 Properties finalised the acquisition of the neighbouring White Square office complex for about $1 bn.

Reporting 01 Properties' acquisition of Legenda, Jones Lang LaSalle said Gazprombank and Gazprombank (Switzerland) organised syndicated funding of the transaction. About 70% of the business centre is already leased out. Among the major tenants are Phillip Morris, Master Card Europe, Group M and Morgan Lewis.

Thomas Devonshire-Griffin, regional director and head of capital markets at Jones Lang LaSalle for Russia & CIS, said: 'The sale of Legenda Business Centre is the second-largest office investment transaction in 2013. Whilst there has been a discussion of an economic slowdown, we can see a continued strong appetite for the real estate sector and continued investors’ interest in Moscow offices – investment volume in this sector amounts to 40-45% of the total market.'

Legenda Business Center increases the net leasable area of the O1 Properties portfolio to 486,000 m2 and boosts its value to $4.2 bn.