Investor for Nagatino i-Land

13 October 2008

Developing company Moscow Business Incubator and Knight Frank Russia and CIS are glad to announce the big deal with the state bank of Baden-Württemberg LBBW (Germany) who will invest to the project Nagatino i-Land.

The government of the German state of Baden-Württemberg has invested several tens of million of euros in the construction of the Nagatino-ZIL Moscow city techno park (Nagatino i-Land).

By agreement between the governments of Moscow and Baden-Württemberg, the technopark facility will accommodate the German House, which is to lodge the representative offices of small- and medium-size companies from Germany. Moscow Business Incubator, a Nagatino i-Land project developer, and the real estate division of Landesbank Baden-Württemberg (LBBW), the state bank of Baden-Württemberg, recently signed an investment agreement for the project.

In compliance with the terms of this agreement, LBBW is to act as a co-investor in the construction of an office building with a total area of nearly 23,000 sq. m., which will become operational in Q1 2009. According to the representatives of Moscow Business Incubator, the total cost of the project is several tens of million of euros. The guarantees of the large financial state corporations – Vnesheconombank (The Bank for Development and Foreign Economic Affairs) and the Russian Bank for Development (RBD) - providing financing for the project is a distinctive feature of the deal. The majority of risks associated with construction are insured by the company Ingosstrakh.

According to Andrey Astakhov, the general director of Moscow Business Incubator, the participation of such serious investors is a testimony to the techno park’s investing attractiveness and holds a special significance amid the current uneasy conditions on the Russian market.

Last year the governments of Moscow and Baden-Württemberg came to a joint agreement on the construction of a business facility in Moscow that would help German companies do business efficiently. As a result, Nagatino i-Land will provide companies from Russia and Germany with the opportunity for mutually beneficial economic cooperation. The up-to-date infrastructure of the techno park and its favorable proximity to leading Russian companies will enable German entrepreneurs to feel comfortable and effectively develop their business in Russia.

Andrey Petrov, a partner at Knight Frank Russia and CIS, said, “The agreements reached by the Russian and German parties may be considered a landmark on the Russian market. The German state bank’s participation in the financing of the project shows that it has a high degree of trust in its Russian partners and in the Nagatino i-Land project, in spite of an uneasy economic situation. It is important to note that the deal was closed during the early stage of construction (six month prior to the State Committee) and is secured by two Russian state banks, Vnesheconombank and the Russian Bank for Development. The LBBW deal promotes the strengthening of economic relations between the two countries, despite western financial institutions’ lack of trust in Russia.

LBBW’s participation in the financing of a city-forming project like Nagatino i-Land can be considered positive. It reflects the strong investment potential of the Russian real estate market. In terms of investments, this project is fairly attractive for the German party. Two factors ensure the appeal of Nagatino i-Land: a strong demand for Class A and Class B offices in Moscow and an unmet need for quality facilities with developed business and transport infrastructure. Nagatino i-Land is intended to address these needs, which will ensure its success and popularity on the market.”

Company profile

The Moscow city techno park Nagatino i-Land is a high tech business district in which buildings totaling one million sq. m. will be located in a 32-hectare area. Construction on the land once used as a site for production facilities is handled by one developer according to a single concept, and the future techno park will become the center of a new business district. It will offer favorable conditions for business development and will boast optimal infrastructure. Apart from Class В and В+ office facilities, the new techno park will include multi-level parking, training and laboratory facilities, recreation complexes, hotels, an exhibition and conference center, and service and shopping facilities.

The Nagatino i-Land techno park will boast the latest engineering infrastructure elements. The “smart building” concept will enable the computerization of the bulk of the operating functions, from the regulation of the parking lot entrance to the programming of the climate control and safety in the buildings.

The first phase of the Nagatino i-Land techno park anticipates the construction of over 216,000 sq. m. of offices and parking lots by the end of Q1 2009. The general scope of work will be completed by 2011.

Nagatino i-Land is conveniently located only 8 km from the Kremlin, close to major traffic routes and metro stations. The project aimed at the enhancement of this business district's infrastructure anticipates the construction of new roads and junctions, bridges over the Moskva River, mooring berths for river transport and the new metro station Technopark.

International property consultancy Knight Frank is the general partner of JSC Moscow Business Incubator and participates in the project development as the marketing and lease agent.