| 2007-02-16 |
Îïóáëèêîâàíî: RBC Daily |
It became known to RBC daily that ITERA is planning to start its first residential project at an area of 7.5 hectares in Rublevskoye shosse (property 68-70) within the boundary of the capital city. The company has acquired this investment project by purchasing Stroi Vest Ltd. that won a tender for housing development in this area in 2005. In the past, this plot of land belonged to the Ministry of Defense. ITERA shall construct 130 thousand square meters of business-class apartments and social facilities. The market players point out that despite serious encumbrances, the project is promising.
ITERA Oil and Gas Company is ranked third in gas production in Russia. IteraInvestStroy is its developer subdivision. ITERA Holdings Ltd. of Cyprus is the owner of the company. ITERA’s net profit was Rubles 960 million, and revenue was Rubles 12.3 billion in the first half of 2006.
IteraInvestStroy told the RBC daily they were in the process of completing the project and receiving permits, licenses and approvals. "Should the approvals be a success, the fulfillment of the projects would commence this year and be finished in two more years", — the company points out. The developer was not ready to site the exact size of investment required since the concept has not been approved yet and even the number of floors was not know, but the company hoped to fit in with US$ 200 million. Apart from the business class housing, the company shall construct a sport and recreation center with a fitness-center and a Spa, a nursery, a supermarket and, probably, a school in that territory. At that, IteraInvestStroy pointed out that the area had a number of encumbrances. The developer is to transfer 25.3 thousand square meters of apartments to military men, to construct social facilities and to relocate two high-pressure gas pipelines. It is possible that apartments for military men would be bought in the Moscow Region, rather than provided from those to be constructed in Moscow. This possibility is under negotiation, now. Given the encumbrances, the developer came out with a proposal to increase the quantity of apartments to 270 thousand meters. The City Council did not support the initiative, because in this case the houses would have been 50 floors high. Under the current variant, floors will be a half that number.
Market players point out that the location of the project has both strengths and weaknesses. "Among the strengths are the vicinity of MKAD (Moscow Circular Automobile Road) and Rublevskoye shosse, abundance of trees, while weaknesses include remoteness of metro stations and the lack of infrastructure", — explains Pavel Yepikhin, head of the marketing department of Kvartal company. He believes that construction of business-class housing in that area is well grounded and today one square meter of the apartment may sell at US$ 5.5 thousand or more. Oksana Kaarma, the managing partner of New Construction Department in Miel-Nedvizhimost (Miel-Real Estate) does not agree: "The land-plot is near MKAD and I am not sure housing needs to be constructed there. If it is residence, then it should be modern economy class".
Expenses of ITERA for the project may considerably exceed US$200 million, - market players say. According to calculations by Pavel Yepikhin of Kvartal, apartments for military men alone will cost no less than US$60 million. Moreover, re-laying the gas pipeline would cost a lot. "Excessive optimism is typical of beginner developers. I think the project will cost the company more than it expects, that is to say US$ 250—300 million, and take some three years", — Dmitry Lutsenko, board member of Mirax Group, believes. Nevertheless, he thinks the ITERA pilot residence project is going to be economic success. "Land-plots without encumbrances had not been available in the capital city for a long time", — he reminds.
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