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08/04/2008
Investment banking giant Goldman Sachs said Friday that it had bought Pokrovsky Hills, an elite townhouse neighborhood in northwest Moscow, from U.S. insurance firm AIG and Deutsche Bank for an undisclosed sum.
Jones Lang LaSalle, adviser to AIG and Deutsche Bank, would not disclose the price, while real estate analysts put it at $350 million to $450 million.
Pokrovsky Hills has a reputation as a sound investment and strong fixed-income earner, but some real estate analysts said buying into a real estate developer could have been a better play.
"Goldman Sachs would have done better to buy stock in a developer. It is much easier to buy stock than to buy the underlying project itself," said Tigran Hovhannisyan, an analyst at Troika Dialog. "Real estate prices have jumped, but [publicly traded] developers' stock has gone down significantly. Goldman Sachs could have bought stock at a discount."
While real estate prices in Moscow have gone up 30 percent since the beginning of the year, some real estate developers' stocks have fallen by two-thirds over the same period, he said.
No one at Goldman Sachs, Jones Lang LaSalle, AIG or Deutsche Bank was available for comment Friday.
Pokrovsky Hills, a 9.2-hectare development of 260 townhouses near the Leningradsky and Volokolamskoye highways, has a total rentable area of 45,584 square meters, according to Hines, the developer and property manager of the site. Major tenants include several embassies and corporate clients. Houses average 220 square meters.
Another real estate analyst said Goldman Sachs had made a good investment. AIG and Deutsche Bank made good returns in the two years they owned the project, and its proximity to the Anglo-American School ensured its success, he said.
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