13 May 2008 06:23
NOT FOR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES, AUSTRALIA, CANADA OR JAPAN
For immediate release
LSR Group Consolidates its Presence in the Moscow Real Estate Market
Moscow, 13 May 2008 - LSR Group ("LSR" or the "Group"), one of the leading real estate developers and building materials producers in St Petersburg and the Leningrad region (LSE: LSRG, MICEX, RTS: LSRG), today announces that its subsidiary ZAO Mosstroirekonstruktsiya has entered into a contract to acquire two companies - OOO Triada Agency and OOO Centaur Management owning plots of land totalling 1.8 hectares at Leningradskoye Shosse in Moscow. According to the terms of the deal, the value of the transaction is not disclosed. The deal was approved by LSR's Board of Directors.
Mosstroirekonstruktsiya propose to use the site acquired for building a multi-purpose business centre with a total area of 115,000 sq.m including 50,000 sq.m of offices and apartments and14,000 sq.m of retail outlets . A parking lot for 1,200 slots is also to be constructed. The total estimated amount of investments is over US$ 280 million. The construction is planned to start in 2010.
The future business centre is conveniently located only 500 m from the Water Stadium metro station, 12 km from central Moscow and 15 km from Sheremetievo International Airport. The flyover currently under construction at Pulkovskaya Street will provide uninterrupted access to Leningradskoye Shosse (Leningrad Highway) in any direction. In addition, the Khimki Water Reservoir is situated in front of the proposed business complex providing the apartments in the upper portion of the complex with a picturesque view of the reservoir.
Commenting on the acquisitions Ivan Romanov, CEO of ZAO Mosstroirekonstruktsiya, said:
"Commercial property in the northern part of Moscow has high potential. Rapid development of retail and office space towards Leningradskoye Shosse ranks third after Moscow downtown and areas within 3rd Transportation Ring. A highly developed infrastructure and increasing transport accessibility make the area extremely promising for developing business complexes."
As of April 1, 2008 the market value of these plots in Moscow is US$ 105 million, according to DTZ independent appraisers. On that basis, the real estate development portfolio of LSR Group (including the acquisition of a plot of land in Yekaterinburg) has grown by at least 260,000 sq.m, increasing its value by US$ 127.1 million. DTZ previously valued the developments portfolio of 8.24 million sq.m at US$5.7 billion on 31st December 2007.
The feasibility of the business complex project is also confirmed by the results of expert research. According to research by Jones Lang LaSalle and S.A. Ricci/King Sturge into the demand for office and retail space near the Water Stadium metro station, the level of rental fees in the area at the end of 2007 were US$ 600-700 per sq.m/year for offices and US$ 1,000-1,200 per sq.m/year for retail space (EX VAT and maintenance fees).
NOTES TO EDITORS:
OJSC LSR Group is a diversified construction company founded in 1993 and operating in a number of complementary market segments. Its core business areas are building materials, construction and real estate development. The Group includes enterprises for extraction and processing of aggregates, production and transportation of building materials, and housing construction - from mass market large-panel housing to elite property built after designs made by leading domestic and foreign architects.
LSR Group has operations and offices in a number of cities in the Leningrad Oblast, in St. Petersburg, Moscow, Yekaterinburg, Lithuania, Latvia, Estonia, Ukraine and Germany. LSR Group employs over 15,000 people.
In 2005 and 2006, the revenues of LSR Group (according to IFRS statements) were US$ 463 million and US$ 777 million respectively. In 2007, the revenues amounted to US$ 1,403 million.
In November 2007, OJSC LSR Group implemented an IPO, and now its GDRs are listed on the London Stock Exchange, and the shares - on MICEX and RTS.
LSR Group has a B1 rating; outlook - stable assigned by Moody's Investors Service.
In 2007, LSR Group was bestowed a National Award in the field of business as 'The Company of the Year' in the 'Construction' category.
ZAO Mosstroirekonstruktsiya is an investment and construction company founded in 2001. Today Mosstroirekonstruktsiya is a leading Moscow market player in the business and premium class segments of real estate. In 2007, the company completed its first project, the Dom na Davydkovskoy business class residential development. Currently the company is implementing a unique project, the Grunvald elite residential project, to be completed at the end of this year. In addition, the New Balchug multi-purpose business complex is underway at Sadovnicheskaya Street just 500 m from the Kremlin.
For more details please contact:
Press Service, LSR Group
Tel.: +7(812) 314-1044
press@lsrgroup.ru
www.lsrgroup.ru
Legal disclaimer:
NOT FOR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES, AUSTRALIA, CANADA OR JAPAN
Some of the information in these materials may contain projections or other forward-looking statements regarding future events or the future financial performance of the Company. You can identify forward looking statements by terms such as "expect", "believe", "anticipate", "estimate", "intend", "will", "could," "may" or "might" the negative of such terms or other similar expressions. The Company wishes to caution you that these statements are only predictions and that actual events or results may differ materially. The Company does not intend to update these statements to reflect events and circumstances occurring after the date hereof or to reflect the occurrence of unanticipated events. Many factors could cause the actual results to differ materially from those contained in projections or forward-looking statements of the Company, including, among others, general economic conditions, the competitive environment, risks associated with operating in Russia, rapid technological and market change in the industries the Company operates in, as well as many other risks specifically related to the Company and its operations.
Neither these materials nor any copy of it may be taken or transmitted into the United States, Australia, Canada or Japan. These materials do not constitute or form part of any offer or invitation to sell, or any solicitation of any offer to purchase nor shall it (or any part of it) or the fact of its distribution, form the basis of, or be relied on in connection with, any contract therefor. The offer and the distribution of these materials and other information in connection with the listing and offer in certain jurisdictions may be restricted by law and persons into whose possession any document or other information referred to herein comes should inform themselves about and observe any such restriction. Any failure to comply with these restrictions may constitute a violation of the securities laws of any such jurisdiction.
These materials are not an offer for sale of any securities in the United States. Securities may not be offered or sold in the United States absent registration or an exemption from registration under the U.S. Securities Act of 1933. The Company has not registered and does not intend to register any portion of any offering in the United States or to conduct a public offering of any securities in the United States.
This communication is directed only at (i) persons who are outside the United Kingdom or (ii) persons who have professional experience in matters relating to investments falling within Article 19(1) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the "Order") and (iii) high net worth entities, and other persons to whom it may lawfully be communicated, falling within Article 49(2) of the Order (all such persons together being referred to as "relevant persons"). Any investment activity to which this communication relates will only be available to and will only be engaged with, relevant persons. Any person who is not a relevant person should not act or rely on this document or any of its contents.
This communication is distributed in any member state of the European Economic Area which applies Directive 2000/71/EC (this Directive together with any implementing measures in any member state, the "Prospectus Directive") only to those persons who are investment professionals for the purposes of the Prospectus Directive in such member state, and such other persons as this document may be addressed on legal grounds, and no person that is not a relevant person may act or rely on this document or any of its contents.