Merrill Lynch Capital Markets Bank and Germany's Aareal Bank have signed the €160 million (US$205 million) re-financing of The Ritz-Carlton Hotel in Moscow. The new credit facility for the five star hotel is the biggest re-financing transaction in Moscow's hospitality and commercial real estate history. Jones Lang LaSalle Hotels and Jones Lang LaSalle Capital Markets advised Capital Partners, an international private equity group which developed the project.
Erkan Erkek, CEO of Capital Partners, said: "This is the largest financing transaction by Western banks in the Russian property market."
The Ritz Carlton hotel is due to be completed in the fourth quarter of 2006, replacing the Intourist Hotel, a legacy from the Soviet era, and is situated 200 metres from the Kremlin and close to Red Square. The luxury hotel will comprise 334 rooms, including 23 suites, and will feature the largest rooms in Moscow, ranging from 42 m² to 237 m². There will also be a 650 m² ballroom, conference facilities, and a health club with spa, a roof-top bar and shops.
Mark Wynne-Smith, European CEO at Jones Lang LaSalle Hotels, commented: "This is a landmark transaction. The successful financing of this first 5-star hotel project to be financed by Western financial institutions demonstrates the strong prospects for the Russian market."
Law firm White & Case acted as legal counsel to the borrower, while CMS Cameron McKenna acted in the same capacity for Merrill Lynch and Aareal Bank.
Source: Jones Lang LaSalle