Corporate | 16 October 2007 08:30
MAGNAT Real Estate Opportunities GmbH & Co. KGaA / Miscellaneous/Miscellaneous
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MAGNAT Real Estate Opportunities GmbH & Co. KGaA expands its activities in
Russia with an investment in Russian Land AG. With a seed investment of EUR
2.5 million, MAGNAT is one of the founding shareholders of the company that
specializes in land banking in the Moscow Region.
Prevailing macro-data are compelling for investments in this segment:
Annual GDP growth of approximately 6 per cent in Russia creates a continued
strong demand for all classes of real estate, in particular in urban
centres. Despite the continued process of closing the wealth gap, Russian
GDP per capita in 2006 was only at close to USD 7,000 which is still only
20 percent of the comparable rate for Germany. Migration from all Russian
regions into Moscow – which is already the biggest European capital city,
the Greater Moscow region has 14 million inhabitants – creates a continued
dynamic population growth and, as a consequence, high demand for
residential property.
Russian Land will take advantage of the favourable external environment as
follows: In the Greater Moscow region, land plots in certain regions can be
purchased for prices between 1 and 3 USD per square meter. With such
attractive investment opportunities, it is possible in strategically good
locations – if supported by certain active measures, such as making the
land ready for development and achieving the zoning for the intended use –
to create high value in a relatively short period of time. Russian Land
intends to commercialize an investment – and by that realize the value
added – within approximately three years from acquisition of the land plot.
The participation of MAGNAT currently represents 50 per cent of the nominal
capital of Russian Land AG. Subsequent to the first investments, Russian
Land plans to raise additional capital; it is intended to attract primarily
new investors. The supervisory board of MAGNAT already approved a potential
increase of the investment in Russian Land of an additional up to EUR 2.5
million (hence up to EUR 5 million total investment).
CEO Jan Oliver Ruester explains the investment of MAGNAT in Russian Land:
'This investment offers a high yield potential for MAGNAT in the segment of
land banking, and at the same time secures an appropriate diversification
of the portfolio. The strategy is being implemented by an experienced
management team present in Moscow. One 40 hectares land plot is ready for
signing, further properties are in due diligence now. So our shareholders
are able to benefit from the above-average growth-rates in this region. '
+++ About MAGNAT:
MAGNAT is a real estate company with a focus on real estate development in
Eastern European countries.
With its opportunistic strategy, MAGNAT capitalizes on inefficiencies
in real estate markets. In contrast to traditional investment strategies,
MAGNAT not only benefits from rental income, but also and primarily
from attractive development yields and the comparable short time of
capital employed in its projects. All projects must meet an above-average
yield requirement.
Management focuses on real estate markets with interesting development
cycles, i.e. undervalued markets ('anti-cyclical investing') and markets
with high economic growth rates ('growth markets'). The regional focus is
currently on Central, Eastern and South-Eastern Europe, supplemented by
opportunistic, special situations in the German home market.
MAGNAT Real Estate Opportunities GmbH & Co. KGaA
Grueneburgweg 18
60322 Frankfurt am Main
Investor Relations
Eva Moertenhuber
phone: +49 (0) 69 719 189 79 0
E-Mail: eva.moertenhuber@magnat-reop.com
Press Relations
edicto GmbH
Axel Muehlhaus / Werner Rueppel
phone: +49 (0) 69 905 50 55 2
E-Mail: amuehlhaus@edicto.de
16.10.2007 Financial News transmitted by DGAP
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