U.S. Developer to Build a City Within a City in Moscow
U.S. Developer to Build a City Within a City
By Denis Maternovsky
Staff Writer
Mike Solovyanov / MT
Hines plans to convert the historic Badayevsky brewery, right, into a multipurpose facility with restaurants, stores and a cinema.
A developer from Texas plans to erect an entire city in central Moscow, right next to another city-within-a-city.
Houston-based construction giant Hines, which has $13 billion worth of projects under way worldwide, is working to develop Park-City, a largely residential complex of some two dozen buildings along the north bank of the Moscow River that is expected to cost more than $350 million.
Located just behind the Ukraina Hotel, the 14-hectare site is directly across the river from Moskva-City, the ambitious, multibillion-dollar project aimed at creating a financial district along the lines of the City of London.
The Park-City concept, designed by U.S. architects Kohn Pedersen Fox, envisages a total of 1,800 apartments in 20 buildings. Ten towers of up to 24 stories each will be located directly on the embankment, while 10 smaller, "European-style" buildings will be scattered throughout the complex, which will include several office buildings, a 3-hectare public park, boulevards and a new wharf.
The 400,000-square-meter development will also include some 90,000 square meters of office space and about 25,000 square meters of retail and leisure space, said Lee Timmins, senior vice president for Hines, which serves as the project's consultant and developer.
Timmins, who unveiled the project at a real estate conference last weekend in Cannes, France, said financing is still being worked out.
Construction on the project could start in early 2006 and the first stage could take two to three years, he said.
In line with City Hall plans to clear factory production out of central Moscow, the historic Badayevsky brewery and the Sacco & Vanzetti pencil factory, which now occupy the site intended for the development, will be relocated further out of town by 2006.
Demolition of the factory buildings, many of which are Soviet-era sheds, will start next year. But Timmins said that the Badayevsky brewery's 19th-century redbrick buildings would be completely preserved and converted to other uses.
"It will have restaurants, retail, a movie theater, loft-type offices or studios, and could also include residential," Timmins said.
Timmins said the first stage would most likely include office space in the western part of the site, closest to Moskva-City, but added that the exact phase breakdown will be determined by supply and demand.
He said Hines was "involved in the overall capital structure" of the project, but would not elaborate on its financing, saying only that the debt-to-equity ratio has yet to be determined.
Park-City construction will be financed by PIK Group, one of Moscow's largest construction conglomerates, which builds about 650,000 square meters of real estate annually, according to company information.
Hines, which opened its Moscow office in 1991, has over 300,000 square meters in residential and office real estate under management in Moscow, and was involved in the construction of the Pokrovsky Hills elite residential community and the Ducat office projects on Ulitsa Gasheka.
Neither PIK Group nor Hines cited any concrete investment figures for the project. Vedomosti reported last week that it could cost "a minimum of $350 million."
Alexei Blanin, project manager at Hines, called Vedomosti's estimate "modest," saying that construction costs would likely be about $1,500 to $2,500 per square meter of net space.
Blanin's figures suggest that the entire project could cost anywhere between $500 million and $800 million.
PIK Group spokesman Daromir Obukhanich said it was too early to cite exact investment figures, as a lot would depend on the construction schedule.
He declined to elaborate on the project's financing structure, saying only that besides PIK Group, Absolutbank is one of the key investors.
"We are currently finishing the project's concept development. Only after that will we be able to say how construction will be broken into stages and comment on its timeline," he said.
Much will depend on how quickly the factories can move out, as well as on the political situation and supply and demand considerations, he added.
"Park-City is one of the most ambitious residential projects in central Moscow," said Konstantin Kovalyov, managing partner at Blackwood, a real estate consulting firm. "It has a unique location that can easily compete with the Golden Island as far as opening views are concerned."
Golden Island is a $2.7 billion redevelopment of an island opposite the Kremlin, which involves construction of elite residential, retail and entertainment facilities.
Kovalyov predicted that apartments in Park-City would not be as exclusive as in smaller elite developments in the center, and could cost between $4,000 and $9,000 per square meter. Currently, Moscow's most expensive flats are on sale for as much a
