Merrill Lynch Capital Markets Bank and Germany's Aareal Bank have signed the EUR160 mln (US$205 mln) re-financing of The Ritz-Carlton Hotel in Moscow. The new credit facility for the five star hotel is the biggest re-financing transaction in Moscow's hospitality and commercial real estate history. Jones Lang LaSalle Hotels and Jones Lang LaSalle Capital Markets advised Capital Partners, an international private equity group which developed the project.
Erkan Erkek, CEO of Capital Partners, said: "This is the largest financing transaction by Western banks in the Russian property market."
The Ritz Carlton hotel is due to be completed in the fourth quarter of 2006, replacing the Intourist Hotel, a legacy from the Soviet era, and is situated 200 metres from the Kremlin and close to Red Square. The luxury hotel will comprise 334 rooms, including 23 suites, and will feature the largest rooms in Moscow, ranging from 42 sq m to 237 sq m. There will also be a 650 sq m ballroom, conference facilities, and a health club with spa, a roof-top bar and shops.
Mark Wynne-Smith, European CEO at Jones Lang LaSalle Hotels commented: "This is a landmark transaction. The successful financing of this first 5-star hotel project to be financed by Western financial institutions demonstrates the strong prospects for the Russian market."
Law firm White & Case acted as legal counsel to the borrower, while CMS Cameron McKenna acted in the same capacity for Merrill Lynch and Aareal Bank.
Capital Partners is a privately-owned real estate company engaged in investment, development and management of landmark projects in Kazakhstan, Russia and Turkey. Capital Partners' rapid expansion in Russia is a direct result of the experience that it has gained as Kazakhstan's leading commercial real estate developer. Capital Partners' other Moscow projects include the 650,000 sq m Domodedovo Logistics Park, the 211,000 sq m Pushkino Logistics Park in the Moscow region and the 335,000 sq m Metropolis, a mixed-use office and retail development in north-west Moscow, scheduled for completion in Q1 2008. Today, Capital Partners manages investments with a projected end value, upon completion, of some US $3.5 bln. Capital Partners has offices in Almaty, Moscow and Istanbul.
Wiesbaden-based Aareal Bank AG is one of the leading international property banks. Its three core business divisions are Structured Property Financing, Consulting / Services and Property Asset Management. The company is represented in 14 European countries plus Singapore and the US and has clients in more than 25 different countries.
Jones Lang LaSalle Hotels, the world's leading hotel investment services firm, is uniquely positioned to provide both the depth and breadth of advice required by leading hotel companies and hotel investors globally. In 2005, Jones Lang LaSalle Hotels sold 32,049 hotel rooms to the value of US$7.9 bln in 72 cities, which represents an increase of 52% on the value of transactions in 2004. In addition advisory and valuation expertise was provided on 139,498 rooms to the value of US$31.8 bln across 265 cities. Jones Lang LaSalle Hotels adds value for clients through in depth market knowledge both in established and emerging markets, technical expertise and unrivalled experience. Their services include investment sales, mergers and acquisitions, capital raising, valuation and appraisal, asset management, strategic planning, operator assessment and selection, hotel consulting, industry research and project development services. Recently recognized by Forbes Magazine, on the prestigious Platinum 400 list, Jones Lang LaSalle (NYSE: JLL) the world's leading real estate services and investment management firm, has more than 100 offices worldwide and operates in more than 430 cities in 50 countries, the company said.