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GIC RE enters Russian real estate market

It buys 25% of township project for US$233m; forms partnership with PIK

AFTER announcing around $7 billion worth of property deals in 2007, GIC Real Estate (GIC RE), the property arm of the Government of Singapore Investment Corporation, said that it will develop a township on a site in Russia with a market value of US$1.33 billion.

In a statement released yesterday, GIC RE said that it will acquire a 25 per cent stake of the township project in Russia for about US$233 million.

It said that it had entered into an agreement to form a partnership with Russia’s PIK Group.

The township will be built in the city of Mytischi, north-east of Moscow. Covering more than 114 ha, it will have around 1.14 million net saleable square metres.

It will comprise 50 high-rise apartment buildings, 13 low-rise commercial buildings, five elementary schools, seven kindergartens, two medical polyclinics and 17,470 parking lots.

When completed in 2013, the development will offer housing for about 50,000 residents.

GIC RE president Seek Ngee Huat said: ‘This investment provides GIC Real Estate with a strong entry into the Russian real estate market. We believe in the potential of the market and are excited to be partnering PIK, one of the largest developers in Russia, for this major Mytischi project.’

This may be GIC RE’s first development project in Russia but more could follow.

PIK CEO Kiril Pisarev said: ‘It is a significant development for PIK and an appropriate model which could be replicated for other projects as we execute our regional expansion strategy.’

In the years between 2004 and 2006, PIK completed over 36,000 residential units in Russia.

Of GIC RE’s announced deals last year, the most recent was the acquisition of a prime office building in Stockholm with a lettable area of 17,211 sq m for 123 million euros (S$258.4 million).

Its largest acquisition in 2007 was for Merrill Lynch’s flagship London office campus worth £480 millionpounds (S$1.4 billion).


Source: Business Times 22 Jan 08

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