Morgan Stanley Real Estate's Special Situations Fund III ('Special Situations') and Altarea have set up a dedicated joint venture owned equally by the two parties which will own a 20 percent stake on a fully diluted basis in RosEvroDevelopment ('RED'). RED is a development company active in the retail, logistics, office and residential sectors in Russia.
Special Situations will contribute to the joint venture its existing approximately 10 percent stake in RED and the joint venture will subscribe to a dedicated capital increase in RED. This transaction constitutes Altarea's first investment in Russia. Altarea is also active internationally in Spain and Italy. Special Situations owns an 8.8 percent stake in Altarea.
Commenting on the transaction, John Carrafiell, Global Co-Head of Morgan Stanley Real Estate, said: "We are delighted that Altarea, one of Morgan Stanley Real Estate's premier European partners, has decided to invest alongside us in RED. Altarea has an outstanding track record in retail development and we believe its skills and expertise will prove very valuable to RED in the execution of its development program."
Alain Taravella, Chief Executive of Altarea, said: "We are pleased to realize our first investment in Russia through RosEvroDevelopment, a national developer with real momentum and a significant pipeline all over Russia. We consider Russia to be a market with substantial development prospects and higher yields than in the rest of Europe. This agreement represents a great opportunity for Altarea to secure a foothold in the Russian market thanks to a co-investment with Morgan Stanley Real Estate, one of our institutional shareholders since 2002." Ivan Sitnikov, Chief Executive Officer of RED, added: "First of all, this transaction will strengthen RED's position in retail property management. We believe that we can leverage Altarea's success at managing a number of retail properties in carrying out our shopping centers program in Russia. Furthermore, this partnership will provide our management with exposure to Altarea's significant experience with retail projects."
Source: Morgan Stanley Real Estate