The European investment fund Atrium European Real Estate may sell its assets in the Russian Federation – seven regional retail facilities. The candidate for the portfolio on the market is Ramo-M, the owner of the Red Square shopping center chain in southern Russia. According to other information, one of the possible terms of the deal is the transfer of these facilities to the management of a Russian company. Even before the crisis, the fund tried several times to sell its real estate and even negotiated with large buyers, but each time the parties could not agree on a price.

The structures of JSC Ramo-M, which own the chain of shopping centers Krasnaya Ploshchad in the Krasnodar Territory, can close a deal to buy seven Park House shopping facilities, a Kommersant source in the real estate market said. Two more interlocutors of “ Kommersant ” say that the owner of these objects – the European investment fund Atrium European Real Estate (AERE) – really found a buyer, without naming the counterparty. AERE and the Federal Antimonopoly Service did not respond to requests from Kommersant. CORE.XP (deal consultant) declined to comment. JSC Ramo-M did not answer Kommersant’s questions on the merits.

JSC “Ramo-M” owns five shopping centers “Red Square” with a total area of ​​405 thousand square meters. m in Krasnodar, Novorossiysk, Anapa, Armavir and Tuapse. According to Kartoteka.ru, in 2021, the revenue of JSC Ramo-M amounted to 2.6 billion rubles, net profit – 1.1 billion rubles. According to Forbes, in 2021, the company’s rental income amounted to $70 million. The owners are Valery Sagitov, Andrey and Svetlana Lipatov, Sergey Aitzhanov and Sergey Vinogradov.

AERE specializes in investments in commercial real estate in Eastern Europe, the value of assets in all countries of presence at the end of 2022 was estimated at €1.8 billion. In Russia, the fund’s portfolio consists of seven Park House shopping centers with a total area of ​​420 thousand square meters. m – two objects in Moscow and one each in St. Petersburg, Kazan, Yekaterinburg, Volgograd and Togliatti, as well as land for development in Essentuki.

The company was one of the first foreign investors in Russian real estate.

Even before the new crisis, AERE several times tried to sell part of its assets or the entire portfolio in the Russian Federation, among the applicants were local companies, including co-owners of the Granel Group of Companies, AFI Development Lev Leviev, Retail Park 1 LLC, created by top managers of O1 Properties Alexander Erdman and Pavel Barbashev. But every time the expectations of the seller of assets and potential buyers on the price of the transaction diverged, says Polina Zhilkina, managing partner of RETEX.

From AERE’s 2022 reporting, it follows that the company estimates the Russian Park Houses at €259 million (at the Central Bank exchange rate on March 27 – about 21 billion rubles), and the land in Essentuki – at €24.8 million (about 2 billion rub.). However, it is unlikely that it will be possible to bail out the full cost: the government commission for the control of foreign investment coordinates such transactions with a significant discount from the price declared by the sellers. Based on a discount of 50%, Nikolai Goryunov, Director of the Capital Markets and Investments Department at IBC Real Estate, estimates the deal at RUB 10–12 billion.

According to another interlocutor of Kommersant, the deal between AERE and Ramo-M is most likely cashless. This will be the transfer of objects to management until the geopolitical situation stabilizes, he adds.

Shopping centers “Park House” require reconception and redevelopment, these objects are morally and physically obsolete, says Polina Zhilkina. In the new realities, they will need transformations related to the actualization of the concept and the filling of vacant premises by tenants, Nikolay Goryunov agrees.

Nevertheless, compared to large shopping centers, AERE facilities suffered the least from the withdrawal of Western brands from the Russian market, since they accounted for a small part of the Park House tenants, Ms. Zhilkina notes. In those properties where the situation was the opposite, the share of vacant space, according to CORE.XP, reached a record 14% by the end of the first quarter of 2023.