SPECIALISED PROPERTY ASSETS IN RUSSIA LIMITED (SPAR) seeks special situations in commercial and residential real estate in Moscow and Moscow region. The fund was set up in 2015. The initial strategy was to buy small affordable flats from the developer at the construction stage, fit them out and resell. This strategy succeeded in generating a profit for the fund, despite an overall decline in the market. At this point we believe there are better returns to be achieved in commercial and office real estate in the region. Class B shares are launched to focus on one particular project - newly build commercial and office space in IQ Kvartal, a multifunctional top class complex in the Moscow City high rise development. This area has achieved critical mass as a desirable business center in Moscow. It includes 3 metro stations, 2 train stations, a helicopter pad and good road access. The Manager intends to buy the space from the developer, break it down into smaller blocks, fit out and resell. 

Why do we find it attractive?

  • 2008-2014 - boom in Class A Russian commercial / office real estate;
  • collapse when ruble fell and economy slowed;
  • slow, slow recovery;
  • office prices in Russia lowest for 10 years;
  • Russian economy stabilized => corporations and investors want quality commercial space in good location;
  • supply drying up; class A offices see the lowest vacancy level since 2013;
  • prices in Moscow City range from $7,000-$10,000 per square meters, as compared to $12,000-$15,000 in New York, $27,000-$30,000 in London, or $30,000-$33,000 in Tokyo.