Rostelecom announces preliminary results of its Real Estate Portfolio Optimisation Programme for 2017
December 26, 2017, Moscow - Rostelecom PJSC (MOEX: RTKM, RTKMP; OTCQX: ROSYY), Russia’s national telecommunications operator, today announces the preliminary results of its Real Estate Portfolio Optimisation Programme for 2017. The Company has pursued several principal work streams as part of its initiative to monetise its real estate portfolio, achieving tangible results.
As part of the Companyís drive to improve internal efficiency, Rostelecom phased out 1,084 properties which required significant maintenance expense, had no investment potential and were not of commercial interest to the business.
As part of the sale of surplus space in 2017, Rostelecom sold properties for the total of RUB 4.4 billion. The sold properties are located across Russia, including large regional centres with commercial value, as well as those with limited demand for real estate.
The Company also leases approximately 717,000 sq. m. Rostelecom and X5 Retail Group, a leading retail company, have a lease agreement for more than 48,000 sq. m. in 73 cities across Russia. This is a vivid example of how commercial deals can be mutually beneficial.
Furthermore, Rostelecom and Sberbank have expanded joint cooperation in the development of the commercial real estate sub-fund joint venture, increasing its authorized capital to RUB 8.8 billion. The main objective of the capital increase is to purchase 22 additional real estate properties for RUB 4.8 billion with a total area of 139,000 sq. m. in Moscow, the Moscow Region, and Saint Petersburg.
According to the preliminary results of the real estate portfolio optimisation programme, the total area in Rostelecomís real estate portfolio was reduced by 3.3% in 2017. 665,000 sq. m. of additional space has been evaluated and currently listed for sale for approximately RUB 6.8 billion.
"We continue actively optimising our real estate portfolio, as we see great potential for creating additional value for our stakeholders. We have already achieved tangible results, and we are set for a feasible plan to monetise this portfolio further. In addition to the contribution to the growth of our proceeds, the programme also allows us to reduce operating costs, which, in turn, will help to improve the OIBDA and provide opportunities to increase our cash flow, while ensuring appropriate returns to our shareholders.”†