The real estate sector in the Russian Federation stands to get a shot in the arm from Qatari Barwa Real Estate and Gazprombank according to the news. The two companies announced the formation of the Barwa Gazprombank Russia Real Estate Fund, with equal initial contributions of $75 million a peace.
According to the news several projects have already been agreed upon, but Gazprombank’s spokesperson, Executive Vice President Anatoly Milyukov failed to give details. He did suggest the fund would engage in investing in housing and commercial real estate development projects in Moscow and other parts of Russia.
The Barwa financial statements include a description of a 16,000 square meter shopping center in Astrakhan, and the partners intend to seek credit for ongoing projects in excess of $500 million. With so many investors having left Russia since the financial crisis hit, a huge gap between previous growth estimates and current projections exists.
Several huge deals fell through when the recession forced even massive funds to contract. Russian projects lost billions in investment including: the Rutley Russia Property Fund ($1 billion), Aberdeen Property Investors ($1.99 billion) and Developers Diversified Realty ($1.33 billion).
So this new movement by Barwa/Gazprombank will likely spur further confidence in Russian real estate ventures. Neither Barwa nor Gazprombank has a reputation for failure in real estate. Where Barwa is concerned in particular, neither Co – Chairmen Ghanim Bin
Saad Al Saad and Hitmi Ali Al Hitmi, nor Group CEO Yousif R. Al-Khater are accustomed to failure. As the rest of the world shook beneath the weight of the economic crisis, this group actually continued to provide value for their shareholders. The chart below from their 2009 report to investors reveals this.
Barwa Real Estate has managed to make money (and a lot of it) in each year since the economy went South. Barwa has liquid assets in excess of $9.5 billion US dollars as of the 2009 report. From Istanbul (the Ottomare project in Istanbul) to Qatar, Northward to Russia and into Germany and Central Europe, there is at least one company out there making money in real estate. The union of Barwa with one of Russia’s Gazprombank is actually a business deal of monumental proportions, particularly if the venture is successful.