Milen Gentchev, Metro Properties

What has Metro Properties Russia been up to in the past 12 months? What are you focusing on at the moment?

Last year we were focused on developing a good pipeline of locations for the expansion of Metro Cash&Carry, while at the same time strengthening our cooperation with MediaMarkt and Real. I believe that the opportunity to work with several companies of the METRO GROUP within a country provides new opportunities for all of them and is a real way to maximize the value of real estate. We have initiated optimization measures on the property and facility management side, as it is a very important aspect for the operating stores.

How has your business changed along with the changes in the real estate markets?

The crisis has clearly challenged us to be more efficient. That applies in all directions, from asset purchases to asset creation and asset maintenance. Being fast is important, but nowadays you need to be fast and efficient at the same time. Everybody is more cautious and lucrative deals have become rare. Therefore we are thoroughly exploring the possibilities to offer attractive conditions and be more efficient.

What are your plans for growth, and where will your growth be directed in the coming years? Are you planning to expand into other markets?

First of all you need to understand what kind of opportunities you are looking for and what are the potential risks. Moscow and the Moscow region are always interesting and we will look for expansion in those markets. We have analyzed the regional markets very well and we see further development potential. Our successful formats and regional experience give us confidence in terms of expansion. In the future, we plan to be more flexible in terms of formats, locations and partnerships. Our priority is to grow more efficient and profitable – no matter in which region, city or format.

What differentiates you from your competitors?

We provide the full range of real estate services for the Metro Group real estate portfolio in Russia. Such a wide range of services is very rare on the market. We have built over 65 locations for Metro Cash&Carry. Metro Properties has a unique experience in building stand-alone stores. Our team of technicians, taking care of building and installations maintenance, is covering an area from Kaliningrad to Krasnoyarsk. Furthermore, we have unrivalled international experience in sustainability and energy management in the trade sector, which we are going to bring in Russia after the liberalization of Russian energy market.

In your opinion, what is the outlook for the retail real estate market in Russia over the next 12 months? How does this compare to what’s happening in the neighboring markets and beyond?

Clearly the Russian real estate market will mirror the economic developments. I do not see a rosy picture, however I believe that the Russian economy will do well in the mid-term, supported by high commodity prices and low private and government debt levels. As I said, finding lucrative deals is more challenging now, but it is possible to get good return for your investments. Under my responsibilities for CIS I have a view on the neighboring markets of Ukraine and Kazakhstan. The situation there will be more difficult due to the lack of scale or the factors supporting Russian economy. If you are very determined, despite the lower market transparency in Ukraine and Kazakhstan, you can still find good investments in specific cases.

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