19th Jul 2006 12:37
Raven Russia Limited19 July 2006 RAVEN RUSSIA LIMITED "The Board of Raven Russia Limited is pleased to announce a proposedco-operation with the Avalon Group, the intention of which is to provide aframework for the long term identification, pre-leasing and development oflogistics warehouses in 14 locations across Russia and the CIS. The proposed Joint Venture ("JV") has identified 14 cities where it believes itcan develop circa 1m sq mtrs (10.8m sq ft) in aggregate. Should all the projectscome to fruition it is anticipated that the potential end value will be in theorder of US $ 775 million. Avalon Logistics intends to pre-let at least 50% ofthe proposed space for a term of 10 years without break. The remaining spacewill be developed speculatively. It is anticipated the sites will be identifiedand built in phases over the next 6 years. Avalon Logistics are a leading pan Russian logistics operator offeringintegrated logistics solutions to its clients. Once built and then let the parties will either hold the properties long term inthe JV or Raven Russia Limited will buy them at a blended cap rate of 14%. If all 14 projects are realised, it is estimated that the total project costswould be $ 660 million including the cost of land, construction and finance.The projected yield on cost to the JV is 15.75%. Raven Russia Limited and the principals of the Avalon Group have already enteredinto one JV in St Petersburg, to develop 129,000m2 of logistics warehouse thatwas previously announced in March 2006. Adrian Collins, Chairman of Raven Russia Limited said: "The proposed roll out across Russia with 50% pre leased to Avalon Logisticsgives Raven Russia Limited a significant potential long term property pipeline,and the ability to earn development profit with an experienced local partner." Stephen Castelete, Chairman of Avalon Logistics said: "We have an established business in Russia and this expansion program willenable us to offer our clients an unrivalled distribution network". This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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