Buyers drive up to Znamenka – Kommersant

The owner of the office complex on Znamenka Street near the Kremlin, where the headquarters of Nord Stream 2 was located, intends to sell it at a public auction for at least 9 billion rubles. At one time, the object was transferred to VEB.RF for debts, but now they claim that they have nothing to do with it. Market participants do not rule out that one of the state-owned companies can buy the asset. In this case, according to their forecasts, the deal will become one of the largest in the real estate market during the crisis.

Information about the sale of a complex of offices for 23 thousand square meters. m on Znamenka Street, 7 in the center of Moscow, next to the General Staff of the Armed Forces of the Russian Federation and 500 meters from the Kremlin, “Kommersant” found on the site “Sber A”, acting as the auction operator. The starting cost of the object is 10 billion rubles, the auction is planned according to the Dutch system – to reduce this amount with a cut-off price of 9 billion rubles.

The auction materials indicate that the seller is Molniya Management Company, where Kommersant confirmed the information about the auction. The ultimate beneficiaries of the management company, registered a year ago, are unknown: there is no information about them either in SPARK-Interfax or in Kartoteka.ru. At the same time, Molniya is listed as a co-owner of a number of structures involved in the construction project of the former Slava watch factory near the Belorussky railway station. Earlier on the market, VEB.RF was called the investor of this project.

VEB.RF told Kommersant that the state corporation is not a party to the deal to sell the complex on Znamenka.

In 2018, Forbes, citing its sources, reported that this complex was transferred to VEB.RF as part of the restructuring of the debts of the owner of the facility, Instroy. The publication called the ultimate owner of the company Mikhail Moskalev, who until 2006 was the vice president of AvtoVAZ, and in 2011-2014 – the general director of the Olimpiysky sports complex in Moscow.

Judging by the documents of the Moscow City Hall, Instroy received from the city authorities in 2004 an object on Znamenka, built in the 19th century as an apartment building, for further restoration and expansion of the area. In exchange, the company financed the construction of the neighboring gallery of People’s Artist of the USSR Alexander Shilov.

Until the spring of 2022, the areas in the complex were occupied by large Western companies that stopped their work in Russia after the outbreak of hostilities in Ukraine. For example, the headquarters of the Russian division of Nord Stream 2 was located there. It has always been difficult for companies not associated with the commodity sector or state capital to rent an office at 7 Znamenka Street, say real estate market consultants interviewed by Kommersant. According to them, if the transaction for the sale of the complex passes even at the bottom mark of 9 billion rubles, then it will become one of the largest in the crisis.

Aleksey Novikov, managing partner of NF Group, believes that state-owned companies that need a headquarters near the Kremlin may be among the interested in the facility. Today, there are very few business centers in the center of Moscow, where 1.1 thousand employees can be accommodated at once, so the share of vacant office space in such areas does not exceed 8.8%, says the director of the CORE.XP office real estate department (acting as a consultant for the transaction on sale of the building on Znamenka, 7) Elina Stepnaya. For comparison: in Moscow as a whole, the volume of vacant space in class A offices in the first quarter of 2023, according to NF Group, reached 13.3%.

In addition, Ms. Stepnaya continues, in the center of Moscow, due to existing restrictions on new construction, a low increase in new office space is expected in 2023-2025. Only 44,000 sq. m. are planned for commissioning. m is 1% of the existing volume of supply, the expert says.

The complex at Znamenka 7, commissioned in the mid-2000s, needs reconstruction, which will require additional costs from the buyer of the facility, warns partner Ricci | Consulting and evaluation” Yana Kuzina. With this in mind, and the indicated sale price, she said, office developers “may be deterred by the high price of entry into the facility.” Therefore, the expert does not rule out that real contenders for the asset may appear at a discount of 30-40% from the value of real estate named by the seller.

Khalil Aminov, Daria Andrianova