The Yunost Hotel in Luzhniki was bought by an agricultural complex from Karachay-Cherkessia

Businessmen from various industries, limited in foreign investments under sanctions, began to look for other instruments for preserving capital within the country. Thus, JSC Agrokombinat Yuzhny from Karachay-Cherkessia bought the iconic Yunost Hotel from the Luzhniki sports complex in the center of Moscow for an estimated 2 billion rubles. It could be redeveloped into apartments, but it could be difficult to compete with luxury projects under construction in the area, experts warn.

JSC “Agricultural Plant “Yuzhny”” in October became the owner of the “Yunost” hotel with an area of ​​8.5 thousand square meters. m in Khamovniki in the center of Moscow, follows from an extract from the Unified State Register of Real Estate, which Kommersant has. Previously, this asset was leased by ETK-Invest LLC, part of the ETK Group, having concluded a ten-year agreement with Transfin-M in 2015, after which the object becomes the property of the lessee.

Two Kommersant sources in the real estate market believe that the agricultural complex acquired the hotel from the Luzhniki sports complex in the interests of Arsen Kanokov’s Sindika group. The group declined to comment. ETK and Agricultural Plant Yuzhny did not respond to Kommersant’s request.

The Yunost Hotel with 183 rooms was built in 1961 according to the design of the architect Yuri Arndt and is included in the list of Moscow cultural heritage sites. Sergei Korolev, Yuri Gagarin, Boris Yeltsin, Andrei Sakharov stayed here at different times.

JSC “Agrokombinat “Yuzhny”” from Karachay-Cherkessia was owned by AFK “Sistema” until 2020, and later the asset was transferred to Aslan Karakotov, whom Kommersant’s interlocutors called the president of the Stavropol GC “Vozrozhdenie” (see “Kommersant” dated May 20, 2020). The total area of ​​Yuzhny’s greenhouses is 132 hectares, the production volume is about 45 thousand tons of tomatoes and cucumbers per year. According to SPARK, in 2022, the agricultural complex’s revenue increased by 7.5% year-on-year, to 3.9 billion rubles, and net profit by 7.8%, to 366.1 million rubles.

The agricultural complex, which had not previously been seen as interested in the real estate market, could buy the hotel for 1.6–2 billion rubles, says Denis Platov, director of the Nikoliers capital markets department. But the deal was unlikely to go through at this price, since the hotel still has a plot of land that was planned to be developed with apartments, notes CMWP partner Marina Smirnova.

Director of the Capital Markets and Investment Department at IBC Real Estate Nikolai Goryunov believes that the new owner may try to coordinate the construction of 15-20 thousand square meters. m of housing or apartments. In this case, the volume of investment, according to his calculations, will be 4–5 billion rubles.

“Yunost” is a good asset in terms of the quality of the building and location, notes managing partner of Ivashkevich Hospitality Stanislav Ivashkevich. But, he continues, if the hotel is reformatted into an apartment complex, it is unlikely that it will be possible to compete with the elite properties being built in the area. Due to the fact that Yunost has outdated planning solutions, it is unlikely that it will be possible to create premium apartments in place of the hotel, he explains.

This year, many non-core investors have appeared on the hotel market who want, in the words of Mr. Ivashkevich, to “park funds.” According to him, now, under the conditions of sanctions, Russian companies are limited in foreign investments, which is why they are looking for other instruments for preserving capital. Since the beginning of 2023, investors have invested 2.7 times more year-on-year in hotel complexes – 48 billion rubles, IBC Real Estate calculated. The largest transaction was the sale of ten hotels to Cosmos Hotel Group, a member of AFK Sistema, to the Norwegian Wenaas Hotel Russia.

At the same time, the Moscow hotel market began to recover after a series of crises. According to CMWP estimates, in January-September 2023, the occupancy of hotels in the capital amounted to 72.9%, although a year earlier it was at 61.9%. Against this background, the profitability per room exceeded the pre-crisis 2019 value by 13.3%, reaching 5.9 thousand rubles.

Daria Andrianova