Hines-Calpers JV takes stake in MSREI’s Metropolis

A joint venture of US property company Hines and California pension giant CalPers has acquired a stake in Moscow’s Metropolis Shopping and Entertainment Mall, owner Morgan Stanley Real Estate Investing (MSREI) has confirmed.

MSREI bought the 205,000 m2 shopping centre for an estimated $1 bn (€770 mln) at the beginning of the year. It remains one of the top two single-asset real estate deals by volume in Russia so far this year.

Announcing the partial sale to the Hines CalPERS Russia Long Term Hold Fund, MSREI did not reveal the size of the stake or the financial details.

Metropolis is one of the most visited shopping centres in Moscow with 55,000 customers per day. The complex is fully leased and has a waiting list for retailers wanting to rent space.

‘We are delighted that CalPERS and Hines are investing alongside Morgan Stanley Real Estate Investing in the Metropolis Mall in Moscow,’ said Thierry Vanden Hende, managing director at MSREI. ‘MSREI has built a strong retail platform in Russia through the acquisitions of Metropolis in Moscow and Galeria in St. Petersburg, and we look forward to working with Hines and CalPERS to deliver the operational leverage and strategic benefits associated with owning two prime shopping centres in Russia.’

Lee Timmins, senior managing director and country head for Hines Russia since 1992, added, ‘The consumer is the engine of Russian economic growth, and we are excited about the opportunity to increase our exposure to this sector of the economy, especially with a leading partner like MSREI.’

‘This investment is part of the implementation of our 2011 strategic plan, which outlines our intent to buy stabilized assets in major cities in emerging market countries. The Metropolis Mall is a good addition to our portfolio,’ commented CalPERS' senior investment officer for real assets Ted Eliopoulos.

The Hines-CalPERS fund was formed in March 2013 with initial equity commitments of $493 mln to acquire Class A logistics and retail assets in Russia and to hold on to them for the long term.