Tuesday, 25 September 2007

Quinn group splashes out €106m for Russian mall

Irish Independent

Jason Corcoran in Moscow

Tuesday September 25 2007

The property arm of Ireland's richest man, Sean Quinn, has splashed out an estimated $150m (€106m ) to buy its first shopping centre in Russia.

Quinn Property Management has acquired a shopping mall and entertainment complex in Ufa, a city of one million people situated in the south-west Urals some 730 miles east of Moscow.

The new 120,000 square metre Avrora Centre is scheduled to open later this year and features a cinema, bowling alley, swimming pool and climbing wall, as well as retail outlets.

A Quinn spokesman said: "This is a combined shopping and leisure centre project that has just started construction. It will take two years to build the project. The group is also in the process of developing a logistics park in the city and this project complements operations there. All the major Russian and international retailers who are active in Russia have expressed interest in Ufa and in this project in particular."

The group declined to disclose the cost and the seller but Moscow real estate analysts put the likely cost at about $150m (€106m) for the shopping mall on its own.

The anchor tenants in Russia's biggest shopping centre chain Mega Mall include Sweden's IKEA, French hypermarket Auchan and Finnish retailer Stockmann. Quinn will be looking to sign up similar big names.

Ufa, the capital of the Russian Republic of Bashkortostan, is an industrial hub involved in petrochemical and manufacturing. The site for the mall is in the centre of the city with an immediate catchment area of more than 300,000 people. Having secured the project earlier in the year, the group used a UK-based architectural firm to complete the design. A Quinn team in Ufa will now manage the construction directly.

The reclusive Fermanagh-born billionaire has about 40 people involved in scouring for property development opportunities in eastern Europe, Russia and India.

Sean Quinn is the most prominent Irish investor in Russia having spent some €100m on a chain of DIY hypermarkets as well as €75m on a logistics park.

The property business, which has earmarked a total of $5bn (€3.5m) to spend in the region, has already acquired shopping malls in Turkey and Ukraine and a string of office blocks, retail stores, logistics centres and hotels in the region.

It has completed office projects in Moscow and Kiev and is also constructing large-scale logistics projects in Moscow, Rostov-on-Don and Kazan. The Caspiy Centre, a six-story business block near Moscow's main airport, is due to open in the middle of next year.

Up and running assets in Moscow are currently selling for a 9-11pc yield while the regional cities are achieving an even higher price.


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