Russian fund manager UFG Real Estate has announced the acquisition of a 5,100-m[sup]2[/sup] building located on Bakhrushina Street in Moscow. The property was bought from Austria's Akron Group for a price said to be around $35 mln (EUR 28 mln).
Russian fund manager UFG Real Estate has announced the acquisition of a 5,100-m2 building located on Bakhrushina Street in Moscow. The property was bought from Austria's Akron Group for a price said to be around $35 mln (EUR 28 mln).
This is the first investment by UFG's $90 mln Real Estate Fund II.
The building is a Class A business centre developed in 2002. The tenants include the BBC, Bank VTB 24 and a German consulting company, Russia Consulting.
Holger Mueller, managing director of UFG RE, said that the high quality of the building was the main reason for the investment. 'The departure of most international investors from the Russian market in the aftermath of the crisis presented those few investors who stayed, such as UFG RE, with compelling investment opportunities.'
He added: 'UFG expects long-term rental growth from the purchase which will be driven by the limited supply of quality office space in the centre of Moscow after most developers halted or put on hold large-scale operations on the back of financial problems or due to construction limits introduced by the city authorities.'
Mueller confirmed that the fund is evaluating new investment opportunities. 'While there are a number of assets on the market, only a few correspond to UFG's high quality requirements vis-a-vis location, tenants, quality of the building and legal structure. We continue to analyse the market and will make further acquisitions when we find other assets of at least comparable quality.'