Investment Management Group (IMG), a Moscow-based private equity real estate fund manager, has announced the start of construction on its investee project, Oktyabrsky Retail Park, located in Tver, Russia. The project is being developed in partnership with Norman Asset Management (NAM), which is acting as developer and co-investor for the project.
The retail project, at approximately 65,500 m², will be the largest modern shopping complex of its class to be built in Tver, a city 134 km northwest of Moscow.
The retail park is advantageously located alongside the main road connecting Tver to the M-10 Moscow-St. Petersburg Federal Highway and will consist of two big-box anchors: a hypermarket operated by Globus, a German retailer, and a DIY store operated by French group Leroy Merlin, which are also co-investors in the project. The two anchors will be connected by a multi-tenant retail gallery, developed by NAM.
The project's easy accessibility from Tver and from the Moscow Region, strong anchors and good tenant mix are expected to make it a major retail destination for the over 400,000 people who live within its catchment area.
The investment by Russia Development Fund (RDF), managed by IMG, in the project is directed at the development of its retail gallery component, which will have a GBA of approximately 25,600 m². RDF invested in November 2011, alongside NAM. The construction permit for the project was successfully received in August 2012 and the gallery is anticipated to open in the second half of 2013.
Speaking of the news, Maksim Kunin, Managing Partner at IMG, said: "The project is indicative of the opportunities that exist for retail development in major Russian regional cities, such as Tver. As the first modern retail project of this scale to be built in the city, where quality retail stock is substantially below Moscow levels, the park will capture significant untapped demand with virtually no competition. We anticipate that this will generate impressive returns for IMG's RDF and its investors."
Mark Wrong of Normal Asset Management added: "The project is proceeding according to schedule and budget. Now that construction is commencing, we are focused on the lease-up process. The project is generating strong levels of interest from good-quality tenants. Currently, almost 60% of the GLA is under negotiation, so we are comfortable that the Tver market and our retail park format have been positively accepted by the community of leading gallery retailers."