Historically, shopping real estate together with offices have always been one of the key segments for investments. It is about 30–35% of total amount of investments. “If you look at the world trends, offices are the favorite, they attract nearly half of all the investments volumes, while shopping real estate normally takes slightly under 25% of total international investments,” says Olga Shlytchkova, chief director of capital markets, Cushman & Wakefield.
Largest investments
In 2019, a few large investments took place. The Finnish retailer Stockmann sold the shopping center Nevsky Center in St. Petersburg to a Czech fund PPF Real Estate. The deal was closed in January 2019, the amount is 171 billion euros.
For a long time, the candidate for Nevsky Center was Morgan Stanley. It did not surface in the deal, but it did cause turmoil in business media having decided to sell its space in the shopping center Gallery. According to different sources, 49% of the project was sold and the amount was estimated at 39,9 billion rubles. The deal was supposed to be closed in December 2019. The share of the project was bought by Mubadala Investment Company from the UAE.
In general, sellers of commercial real estate fall into the following categories: foreign owners, selling their assets as a part of reforming their business or cutting down on their development plans, banks selling property of defaulted borrowers, and state companies selling state property as a part of optimization process. Russian private owners sell their property mainly to diversify their business and move a part of their portfolio into a different segment or location. The most interested in a deal are those sellers who are non-strategic investors, non-core players.
Investments into commercial real estate, even in the most turbulent years, are the most stable ones. An investor has a variety of options to invest: from buying particular objects or buying a control over a legal entity, the owner of a property, to investments into private or pooled investment funds, all without any risks of management. Garant-Invest offers its commercial papers, one of the easiest in terms of entering and highly liquid investments to private individuals and legal entities. We have issued bonds six times with the Moscow Stock Exchange. The fifth issue for the amount of 6 billion rubles for five years with quarterly coupon payments is outstanding. There is a special issue of Green bonds, 500 million rubles, three years, quarterly payments.
The funds raised from the bonds are spent to expand the portfolio of retail property with a potential to grow their market value, while the Green bonds are used to modernize city infrastructure, multifunctional and shopping centers using green technologies in real estate. Our company has acquired an extensive knowledge in development and renovation of retail real estate, having been working in the market of retail property for 17 years and finishing 18 development projects. At the moment, the portfolio holds 14 real estate objects, including 12 shopping centers.
expert opinion President, Garant-Invest
Aleksey Panfilov, President, Garant-Invest