SRV, Etera, Ilmarinen and Onvest Group have signed an agreement concerning a real estate investment company called Russia Invest. The company will invest in real estate development projects in Moscow and St Petersburg. SRV will be in charge of project development and acts as a general contractor of project management in company approved development projects.
“This joint venture will support SRV’s strategic goal to commercialize our project development expertise in the Russian market, which is one of the priority areas in our growth strategy. We will focus on developing different kinds of business premises and the investment company strengthens our financial reserves. Participation of Finnish institutional investors will naturally give us broad shoulders to lean on in big projects. Since the beginning of Pearl Plaza shopping center development project this is the biggest venture for SRV”, says Jukka Hienonen, CEO of SRV.
Pension insurance company Ilmarinen, real estate investment company Sponda and SRV have each approximately 27% share of the company, pension insurance company Etera has approximately 13% and Onvest Group approximately 5%. Partners are committed to total investment of EUR 95.5 million in the company. For Ilmarinen, Sponda and SRV this accounts for EUR 26 million each, EUR 12.5 million for Etera and EUR 5 million for Onvest Group. Equity will be committed only after investment targets have been identified and decisions have been made.
Development projects will be funded in other respects by project-specific bank loans, which means that the whole investments can equal up to EUR 300 million. Strategy of the investment company is to sell the completed properties after a three year period.
“Project development in Russia is a growing business sector for us. SRV has plenty of experience in executing demanding property development projects both in Finland and in Russia. Russian markets are growing fast and offer interesting investment opportunities for office, hotel and shopping center development. Newly established Russia Invest company will secure sufficient resources and help us speed up the implementation time in project developments. Faster execution is in the best interest of all partners”, Hienonen points out.
SRV Group Plc
Director, Communications and Marketing
Tel. +358 40 504 3321
Veli-Matti Kullas, Director, Project Development in Russia, tel +358 20145 5274
Hannu Linnoinen, Senior Executive Vice President, CFO, tel +358 20145 5990