Sberbank and Rostelecom announce the creation of a sub-fund to invest in the redevelopment and management of Rostelecom PJSC’s real estate

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December 29, 2016, Moscow – As part of its corporate real estate fund project, Rostelecom PJSC in partnership with Sberbank announces the completion of the first transaction within its new commercial real estate sub-fund which has been set up in the form of a joint venture with registered capital of RUB 4 billion 1. The real estate fund comprises real estate assets from Rostelecom’s portfolio which have great potential for investment and development with the involvement of co-investors.

Sberbank, via Sberbank Investments LLC, and Rostelecom PJSC have contributed RUB 2 billion each to the joint venture and thus become 50% shareholders. The joint venture will purchase 16 commercial real estate properties from Rostelecom worth a total of more than RUB 4 billion. The properties are located in nine Russian cities, including six properties in Saint Petersburg and two in the Moscow Region with a total area of over 100,000 square metres. The properties have been selected based on their potential to appreciate in value following redevelopment.

James Corrigan, Managing Director, Merchant Banking and Advisory Department, Sberbank CIB, commented on the deal:
“Sberbank is a long-term strategic partner of Rostelecom. As an investor, we are interested in developing the investment and development potential of the properties managed by our joint venture. Leading corporate and investment banks in the real estate sector partnering with federal telecommunications companies to reach investment objectives has been successful in other countries. We are glad to pioneer the implementation of a similar strategy in Russia. We hope that the successful realisation of this pilot deal will strengthen our cooperation and act as a positive signal for the market, providing important impetus to further the development of partnerships between strategic and financial players to effectively manage commercial real estate funds.”

Mikhail Irzhevsky, Vice President of Legal Affairs, Rostelecom PJSC, commented:
“This deal is part of our strategic initiative to monetise the Company`s real estate portfolio, as agreed by the Board of Directors. This pilot joint project with Sberbank enables us to undertake the first practical step towards the development and execution of the corporate real-estate fund strategy.”

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Sberbank – the largest bank in Russia and one of the leading global financial institutions. Sberbank accounts for about a third of total assets of the Russian banking sector. Sberbank is a key lender to the national economy and has the largest market share in deposits. The founder and main shareholder of PJSC Sberbank is the Central Bank of the Russian Federation, which owns 50% of the share capital plus one voting share. The other 50% of the Bank's shares are owned by Russian and international investors. Sberbank provides services to more than 135 million individuals and more than 4 million enterprises in 20 countries. The Bank has the most extensive branch network in Russia: about 17 thousand branches and internal business divisions. International network of the Bank consists of subsidiary banks, branches and representative offices in the UK, the USA, the CIS, Central and Eastern Europe, India, China, Turkey and other countries.
General Bank of Russia license to conduct banking transactions 1481. Official website of the Bank - www.sberbank.com (site of the Group Savings Bank), www.sberbank.ru.

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Sberbank CIB – Corporate and Investment Banking Sberbank. The key areas of activity are corporate loans (including trade finance), documentary business, investment banking, trading in securities, own investments. Corporate and Investment Banking Savings Bank provides its clients, including major corporations, financial institutions, state, federal and sub-federal authorities and organizations, integrated financial solutions and services of a financial advisor.


1 The deal was organised by the Investment Department of Sberbank CIB, the corporate and investment banking business of Sberbank, via Sberbank Investments LLC (a 100% subsidiary of Sberbank).