Friday, October 24, 2008
New Square merged with Simargl Capital
The Joint Company on real estate investment management already has 1,729 thousand sq. meters in the pipeline
Moscow, October 20. Interfax – Real Estate
In light of the recent economy events New Square – Moscow based development company – has logically taken a strategic decision to merge with Simargl Capital, a management company for a number of investment funds, created by former Alfa-Group executives – Armen Petergov and Oleg Martynenko.
As per information from “New Square”, the joint company is to be named “New Square Simargl Capital”.
According to the employee of the JointCo, overall area of 5 projects being developed by the new company totals around 1,729 thousand sq. meters of diverse real estate. In addition to the well-know project of “New Square” in Krasnaya Polyana, Sochi, and Balashikha City, there are 3 new projects (2 residential and 1 commercial construction projects) in the Moscow region.
General Director of the new company – Evgeniy Yakubovskiy says that this year “New Square” has adjusted its internal development strategy, made an emphasis on the projects with a shorter payback period and optimized its cost structure. Part of this new strategy was finding a strategic investor from among financial market professionals to participate in the capital formation of the company.
Evgeniy told us that Simargl Capital at the same time was making a close research of the Russian real estate market in search of the investment opportunities. “They became interested in our projects and professional team. After independent due-diligence and other essential legal and fiscal procedures were completed, the new joint company specializing in on real estate investment management was founded”.
According to the management plans, “New Square Simargl Capital” strategy implies formation of the projects portfolio balanced in accordance with the following core characteristics: size, time-frame, real-estate class (residential/non-residential).
NSSC Board Member, representing Simargl Capital, Armen Petergov notes that one of the strongest features of the company is the absence of debt. The company is not merely backed up with financing for all existing project, but is looking at the market in order to acquire new ones and believes that nearest future should bring excellent opportunities for new purchases.
According to the Board Member Denis Semykin, strategic areas of “New Square Simargl Capital” development is construction of economy class residential projects in Moscow Region, office real estate based beyond the Garden Ring road (A class and B class), distant country houses segment (economy class cottage estates located within 80 – 120 km from Moscow).
The company also develops few regional projects, such as apartment and chalet complex in the Krasnaya polyana mountain resort near Sochi, complex development of the 500 hectares land plot in Leningrad region and others.
“New Square” development company was specializing on a complex land development projects and is actively constructing residential complexes in the Moscow Region - Solntsegrad (Balashikha City, 1.2 mio sq. meters) and “Seven Stars” (Zheleznodorojniy City, 240 thousand sq. meters).
As reported, in March of 2009 the company has met certain difficulties related to unexpected encumbrances upon the projects under construction – need to satisfy social commitments to the investors of the bankrupt “Sociniciativa”, as well as increase of the municipal interest (Solntsegrad).
After talks “New Square” managed to negotiate a reduction of the municipal interest, increase characteristics of the projects and overcome the obstacles. In order to meet the social obligations as a co-investor in these projects ZAO “Mosstroymekhanizatsiya-5”was invited a prime contractor. At present construction of both “Solntsegrad” and “Seven Stars” project has been resumed. First stages of both projects (130 thousand sq. meters and 60 thousand sq. meters accordingly) are to be completed by the middle of 2009.
Simargl Capital was established in 2007 by former Alfa-Group executives – Armen Petergov and Oleg Martynenko together with a co-owner and co-founder of Mercuria Energy Group Ltd, one of the five largest independent energy traders in the world – Gregory Jankilevich. Simargl Capital is currently managing 2 investment funds – Simargl New Opportunities Fund and Simargl Multi-Strategy Fund SPC, primarily investing in Russia and CIS.
Arseniy Mesitov
Source: Interfax
