Moscow firm UFG makes 71% IRR from Russian site

UFG, a Moscow-based real estate investment firm, says it has made aggregate net IRRs of 71 percent from exiting four plots of a large-scale development project near St. Petersburg.

UFG Real Estate Fund has sold four assets in Russia, handing the Moscow firm an aggregate net internal rate of return of 71 percent.

UFG, which launched its first real estate vehicle with $130 million (€90 million) in July 2007 and which is currently raising a second fund, said it had sold four investments at its industrial land development project Fyodorovskoe Industrial Park south of St. Petersburg. The 121-hectare site is located near the St. Petersburg-Moscow highway, as well as near the planned toll road to Moscow.

It invested in Fyodorovskoe by acquiring a plot of raw agricultural land in July 2007. Since then, the plot has been rezoned into industrial land and divided into thirty smaller parcels for individual users. UFG used German engineers WTM to develop the masterplan for the project.

Holger Mueller, managing director of UFG Real Estate, said in a statement that UFG was seeing strong interest in pre-developed plots for industrial use, particularly from domestic and international car suppliers, adding that St. Petersburg had attracted companies such as GM, Nissan, Suzuki and Toyota. 

“We are confident that we will sell the remaining lots within the next 18 months,” he added.

UFG Real Estate is part of UFG Asset Management, an independent provider of alternative investment management strategies focusing on Russia and the CIS with total assets under management of more than $2.3 billion.

Its second fund has a target of $300 million. A first closing took place in June 2008 with commitments of more than $140 million.