Otkritie, Deutsche Bank JV sells 4 Class-A offices in Moscow

A consortium led by Otkritie Financial Corporation and Deutsche Bank has agreed to sell four Class A office buildings with a total 101,000 m² of space in Moscow's central office district Paveletskaya to the German real estate investment company KanAm Grund Kapitalanlagegesellschaft mbH (KanAm Grund). The properties are earmarked for KanAm open-ended fund KanAm grundinvest Fonds. The project developer is Otkritie-Real Estate.

KanAm Grund will take ownership of the buildings upon completion in mid-2009. Under the terms of the agreement, the sales price will be calculated with reference to the actual leases signed. The transaction may be worth up to $900 mln, Otkritie said in a statement.

'We are delighted to work with KanAm Grund on their first major transaction in Russia', said Vadim Belyaev, CEO of Otkritie Financial Corporation.

Otkritie F.C. formed an international investor syndicate in June 2007 with members including Deutsche Bank, private investment firm Starr Investments Cayman and two US-based funds, Old Lane and Artha Capital, to fund the project, which is located next to the Paveletskaya train station linking central Moscow with the Domodedovo international airport.

Construction finance is jointly provided by Deutsche Bank and Bank Austria. Project advisers are Lovells and Deloitte; while Austrian construction company Strabag is the general contractor. Jones Lang LaSalle and Knight Frank have been appointed co-leasing agents for the four office buildings which are expected to be fully leased before completion. The site will offer parking facilities for 1,000 cars.

'We remain very positive about the Russian market and continue to be very active with our investment and lending businesses there and across the CIS. This transaction is further testament to the ongoing development of the real estate investment market in Russia and the broadening of the investor base there', said John Nacos, managing director Deutsche Bank, head of Commercial Real Estate, EMEA and South Asia

'After an intensive analysis of the real estate market in Moscow for the past two years, we are very happy that we are the first German open-ended real estate investment fund to invest in Moscow. Due to the professional work of all participants involved in this transaction we were able to complete this transaction within only three months', commented Matti Kreutzer, managing director of KanAm Grund.

Otkritie Financial Corporation is a leading Russian financial institution servicing institutional, corporate and individual investors. Otkritie operates in the ten largest cities in Russia and through its representative offices in London, Frankfurt and Limassol. Otkritie-Real Estate was founded in 2003 to develop commercial real estate in Moscow and Russian regions. At the beginning of 2008 the total market value of its projects is over $ 1.5 bn. In January this year Otkritie-Real Estate signed an agreement for a strategic partnership with Strabag.