Transactions - MAY 29, 2013

CalPERS buys stake in Russian mall

by Andrea Waitrovich

The $260.4billion California Public Employees' Retirement System (CalPERS) is reportedly buying a minority stake in Moscow’s Metropolis mall from Morgan Stanley, which acquired Metropolis for approximately $1.2 billion from Kazakhstan Capital Partners. The sale was recognized as the largest in the history of the Russian market of commercial real estate. According to Artem Tsogoeva, managing partner of the Moscow Central real estate exchange, the value of the property is now approximately $1.1 billion.

An application to the Federal Antimonopoly service of Russia was filed through the investment vehicle Hines CalPERS Russia Long-Term Hold Venture (HCR), which focuses on long-term investments in Russia.

CalPERS declined to comment on the transaction. Hines was unable to be reached for further comment. CalPERS committed $250 million to HCR in March.

Metropolis is one of the largest shopping centers in Russia, with 258 stores, part of an office and retail complex totaling 3.2 million square feet.

The investment is part of CalPERS’ 2011 strategic plan, under which the pension plan intends to allocate a small portion of its real estate portfolio to the acquisition of stabilized or core-like assets in the major cities of certain higher-growth emerging markets.

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