Meinl European Land Borrows for Russia
// Austrian fund will invest €500 million into Russian projects
Austrian investment fund Meinl European Land (MEL) plans additional equity offering for almost €1.5 billion. The company will direct 30 percent of the sum to financing the construction of trade centers in large cities of Russia. Investment into Russian real estate gives 10-15 percent annual profits compared to 4-6 percent in Western Europe, experts explain.
Meinl European Land will hold additional equity offering at Wiener Börse in early February. The company plans to sell 75 million shares for €19.7 per share, and to attract €1.477 billion. The attracted funds will be invested into projects in Bulgaria, Ukraine, Poland, and in Russia (not more than 30 percent).
MEL decided to spend €11 million on building trade centers in Nizhny Novgorod, Rostov-on-Don, and St. Petersburg, each of the centers about 80,000-100,000 square meters. Besides, MEL will invest into building trade centers in Ufa, Ekaterinburg, and Moscow.
Real estate experts believe that MEL’s attention to the regional market is worthwhile. According to consulting companies, the profitability of investment into building trade centers in Moscow is 10-12 percent annually, and it can reach 14-15 percent in Russia’s regions, while it is only 4-6 percent in Western Europe.
MEL is not the first company to be drawing funds for Russian project at a stock exchange. Thus, in October 2006, British investment fund Fleming Family & Partners held private placement of its subsidiary FF&P Russia Real Estate Development for $150 million, to form an investment fund for real estate projects. In December 2006, Mirland Development, owned by the Fishmans, an Israeli family, allocated 30 percent of shares for $282.7 million, to build about 2 million square meters of residential and commercial real estate.
Olga Kondrashova
All the Article in Russian as of Jan. 23, 2007
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