Evans Randall strikes first deal in Russia

The London banking and private equity firm is buying a prime city centre office in central Moscow as it gears up for an investment push in Europe

Evans Randall is to make a push across Europe starting with a prime office investment in Moscow, it has revealed.

The London-based bank and private equity firm said it had acquired the Silver City complex in central Moscow, marking a debut for the firm in Russia. But it also said it heralded the beginning of a new push across the Continent. In a statement, it called the push a “renewed programme of prime property acquisitions”.

The firm did not reveal the price paid for the complex, but city sources suggest it was around €190 million.

Evans Randall’s first European Property Fund acquired more than €690 million of prime properties in Munich, Amsterdam and Brussels between 2006 and 2008, and said it was again targeting prime office assets in major European cities. It owns the Königsbau Passagen shopping centre in Stuttgart, ING Bank’s landmark building at Haagse Poort, The Hague, De Brauw Blackstone Westbroek’s new headquarters building in South Axis, Amsterdam, and The Deutsche Telekom Headquarters in Munich.

Silver City is a 41,650 square metre building completed in 2007 on the Serebryannicheskaya embankment in Moscow’s Garden Ring East business district. It is let to a number of large institutional including Siberia Coal and Energy Company, Campbell’s Soup, SeverEnergia, Canon and Toyota Bank with average lease lengths approaching five years.

Evans Randall is going to approach mainly private investors in the second quarter of 2010 to offer an equity stake in the Russian asset.

Michael Evans, chairman of Evans Randall, said he believed the market for grade A office space in Moscow was stabilising, with an increase in tenant take-up and the prospect of renewed rental growth. 

Evans Randall is the second firm this month to announce a first acquisition in Moscow. Argo Capital Partners Fund, managed by emerging markets specialist Argo Capital Management, announced its debut on December 8. It has acquired 600,000 square metres of development land. The fund financed the deal entirely through debt financing by purchasing a Cypriot holding company called Thediki Limited.

Kyriakos Riales, chief executive, said the long term goal was to become a sizeable player in the sector. Argo was founded in 2000 and manages the Argo Real Estate Opportunities Fund, a closed ended vehicle. The company is listed in London on the Alternative Investment Market (AIM).