SOFAZ buys real estate in Moscow - UPDATE

State Oil Fund of Azerbaijan (SOFAZ) purchased 100 % of "Tverskaya,16" company, the owner of Gallery Actor, mixed-use office and retail complex located on Pushkin Square, SOFAZ informed Trend.

The transaction is valued at $133 million. The seller was Metropolitan Insurance Group, part of VTB Group.

Jones Lang LaSalle (as broker) and ALRUD (as legal consultant) were the advisors to SOFAZ on this deal.

Gallery Actor is located on Pushkin Square in the center of Moscow. The building was built in 1882.

In Soviet times it housed Russian Theatrical Society and Actor's House along with eponymous restaurant.

Office and retail complex Gallery Actor with the total area of 18,075 square meters is located in historical center of Moscow. Tverskaya Street is a prime location for exclusive hotel and office schemes as well as main Moscow street-retail destination where flagship stores of many international retailers are located.

The asset is located at the intersection of Tverskaya Street and Strastnoy Boulevard, in close proximity to the Red Square and the Kremlin. Actor Gallery was built in 1881 and was completely reconstructed in 1995 behind the historical façade. The asset is leased to a number of finance, insurance, consulting and retail companies.

"Total annual rent is USD 9.6 million. Unique location of the asset and strong fundamentals of Moscow office and retail market provide for secure income stream as well as substantial upside through active asset management strategy. Gallery Actor well matches real estate portfolio comprising assets in prime destinations of largest European capitals," SOFAZ reported.

Commenting on the acquisition of the building, Mr. Shahmar Movsumov, the Executive Director of SOFAZ stated: "The acquisition of this building is another successful step towards the realization of our real estate investment strategy. This deal opens new phase in Azerbaijan-Russia economic relations, which have always enjoyed long-standing strategic partnership and relied on common historical, cultural roots. The very fact that one of the first real estate investments of the Fund is accomplished in Moscow is a true indication of SOFAZ's intentions of long-term commitment to Russia."

According to the investment policy of SOFAZ overall value of the investment portfolio can be invested into the gold, equities and real estate with maximum limit of up to 5 % per each financial tool starting this year for the first time. Earlier SOFAZ announced acquisition of property in London and Paris.

Projected total cost (the average amount) of the investment portfolio of SOFAZ was set at 23 billion manat as of 2012, while by the end of 2011 it was predicted at 19.4 billion manat.

It is predicted that by late 2012, SOFAZ assets reach the level of $34 billion.

As mentioned by the Fund, as of December 1, 2012, assets of SOFAZ totaled $ 33 895 million.

SOFAZ was established in 1999 when its assets amounted to $271 million.

The main purposes of the fund are: accumulation of funds and placement of the fund's assets abroad to minimize the negative impact on the economy, preventing a "Dutch syndrome" to ensure savings for future generations and to maintain the current socio-economic standard in the country.


/Trend/