OREANDA-NEWS. On 24 April 2008 was announced, that OJSC RTM (RTS: RTMC) and Austrian  real estate investment company ImmoEast AG signed a Memorandum of Understanding with a view to establish a strategic partnership for investing in Russian real estate market. Construction of a shopping and entertainment center in St. Petersburg was announced as the two companies’ first joint project.

According to the Memorandum between OJSC RTM and ImmoEast AG, they are going to set up a joint venture for the purpose of implementing development projects and subsequent management of real estate properties. Under the partnership, OJSC RTM’ role will be to provide day-to-day project management whereas the role of ImmoEast AG will involve funding and the procurement of bank debt funding to finance the projects. The agreement sets the cap for the size of ImmoEast’s total investments at about \\$150 million. According to the plan, the timeframe for setting up the joint venture is the second quarter of 2008. OJSC RTM is considering acquiring ownership of the controlling (51%) stake in the new joint venture as one of possible prerequisites for its involvement in the cooperation.

The construction of the shopping and entertainment center in St. Petersburg will be OJSC RTM’s and ImmoEast’s first joint project. Constructed on a 6.1-hectare land plot, the shopping and entertainment center will have a total floor area of about 90,000 sq. m and feature a 1,200-car parking lot. The center’s commissioning is scheduled for 2009. Under the agreement, ImmoEast AG has provided OJSC RTM with a bridge credit facility in the amount of \\$15 million, prior to setting up the venture.

“We are now in talks about implementing a series of additional projects under our cooperation with ImmoEast AG“, noted Eduard Vyrypaev, General Director of OJSC RTM. We are also looking to get other co-investors on board while staying away from confining ourselves to the commercial real estate sector. It is noteworthy that we have already seen several Western investment funds express interest in this kind of cooperation".