Scandinavian investment fund BPT Arista is planning to create a Russian chain of kitchen furniture stores along with Expo Retail.
An 8,000-square-meter shopping center owned by the investment fund was leased to Expo Retail and two other companies specializing in kitchen retail, said Pavel Cherepanov, managing partner of Baltic Property Trust, which manages the fund. The shopping center, which formerly housed Kukhnistroi, the biggest kitchen furniture store in Russia, will operate under the Kukhnipark brand, he said.
Albert Kakhrimanov, general manager of Expo Retail, confirmed that the deal had been signed and said the store would open this summer. The companies have invested $1.5 million to $2 million in its opening, he said, adding that Expo Retail plans to open three similar centers in other large cities, most likely, St. Petersburg, Kazan and Yekaterinburg, investing in these projects $2.5 million to $3 million. BPT Arista will take part in the project, Cherpanov said. The fund is reviewing offers to buy shopping centers in those cities under the Kukhnipark brand.
BPT Arista, which manages 400 million euros ($530 million) of Scandinavian pension funds, has worked in Russian since 2005. Currently it owns the 16,000-square-meter Global City shopping center in Moscow and the 18,000-square-meter Kantri Park in Khimki.
The fund had initially planned to acquire 150,000 square meters of commercial real estate in St. Petersburg, Moscow and other large cities, but at the beginning of 2009 it said it would freeze investment. The reason was that Kukhnistroi had stopped paying its rent for the building it was leasing to BPT Arista's Arkadastroi. In December, Arkadastroi got a Moscow region court to declare the rental agreement void.
Kukhnistroi's total debt stood at $2.97 million, and BPT Arista is now looking to sell off the debt, Cherepanov said.
Players on the furniture market haven't heard of Expo Retail. Kakhrimanov said the company was founded by a group of private investors in the retail and real estate sectors. Kakhrimanov was formerly chief executive of Kukhnistroi.
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