Market Value of RTM-Controlled Properties Grew by 24% in 1H 2008
OREANDA-NEWS On 15 September was announced, that OJSC RTM (RTS: RTMC) released a report by independent appraisers Colliers International that puts the market value of OJSC RTM-controlled portfolio of properties at USD 983.4 million as of June 30, 2008 7, which is 24 per cent (or USD 193.2 million) higher than the previous appraisal completed as of December 31, 2007.
Properties held as investments are valued at USD 682.4 million (+16.1 per cent since December 31, 2007);
Properties in the course of development are valued at USD 245.9 million (+52.1 per cent since December 31, 2007);
Properties held for development are valued at USD 55.1 million (+34.7 per cent since December 31, 2007).
This substantial increase in the value of projects in the course of development and those held for development can be attributed to the high speed of construction and amount of work completed on the projects under development.
The gross area of the properties in the RTM Group's portfolio is 558,519 sq. m. of which 376,154 sq. m. are leasable.
In addition to its involvement in the development of commercial real estate, the company is implementing a residential complex construction project in Bryansk. The agreement between the Administration of the Bryansk Region and the RTM Group regarding the implementation of a complex territory development project on a plot of land in Bryansk was signed on October 25, 2007. The cap on the total area of residential space to be constructed on the allotted plot of land was set at 250,000 sq. m. The total area of the future shopping and entertainment center will be equal to 53,316 sq. m.
In the period between December 31, 2007 and June 30, 2008 the RTM Group closed a deal to acquire a 25 per cent stake in OOO "ReMa Immobilien", the owner of 53,623 sq. m. of retail real-estate in Moscow whose anchor tenant is European retail chain Billa. As a result, the RTM Group is now in control of 100 per cent of shares in a company that owns properties with the market value of USD 247.3 as of June 30, 2008. Also in the first half of the year, the Group was successful in replacing anchor tenants for more than 39,000 sq. m. worth of properties. New lease agreements with new tenants including chain operators Billa and Mosmart establish mutually agreeable and beneficial terms of cooperation.
In addition the company executed a deal to sell a 5,900 sq. m. property in Togliatti. The sale is part of the company's strategy of shedding assets with the least potential for subsequent growth of their market value. Such properties will be sold to set the favorable financial conditions for implementing new projects within the company.
Therefore, the RTM Group has under its control 56 commercial real estate properties at varying stages of development, of which 47 are held as investments, 6 are in the course of development and 3 are held for development.
"The value of the RTM Group's portfolio is greatly enhanced by the broad geographical and format-wise diversification of our projects as well as of consistent implementation of earlier announced projects", noted General Director of JSC RTM Development Vladimir Kireenko. "Ever since the IPO, the market value of the Group's portfolio has grown by nearly 80 per cent. This is evidence that we both chose the right strategy and that regional real estate markets hold a lot of promise. We intend to continue pursuing our activities in the regions. One of the company's key objectives now is to strengthen its positions on the regional markets including through entering new segments such as hotel, office and residential real estate".
The complete version of the Colliers International valuation report is available on the RTM Group's web-site.
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