REPORT: Hines Sells 2.2M SF Moscow Shopping Center In Continued Post-War Divestment
Hines, one of the property giants working to divest Russian assets, has reportedly sold a 2.2M SF shopping center in Moscow.
Hines, which previously was part of an ownership group that included Morgan Stanley and the California Public Employees' Retirement System, became the sole owner of the Metropolis shopping center earlier this year and has now sold it to hedge fund Balchug Capital, Moscow newspaper Vedomosti reported. The price was undisclosed, but a spokesperson for Balchug said it was "attractive."
Calls and emails to Hines seeking comment went unanswered Wednesday afternoon.
A Morgan Stanley fund paid $1.2B for the mall in 2013, and a few months later sold a stake — reportedly 50% — to the Hines CalPERS Russia Long Term Hold Fund. Bisnow first revealed in February Hines planned to exit Russia after the developer and owner began considering a move out of the country shortly following Russia’s February 2022 invasion of Ukraine.
“CalPERS no longer has an ownership stake in this property,” a spokesperson for the pension fund said in an emailed statement to Bisnow.
CalPERS held $345M in Russian real estate assets as of March 2, 2022, according to a letter from CalPERS Board of Administration President Theresa Taylor to Gov. Gavin Newsom. The pension fund said in a statement issued the same day that it was “reviewing all investments in Russia, including our real estate investments, to determine a path forward.”
A Metropolis consultant said Morgan Stanley had disposed of its share in Metropolis “relatively recently,” Vedomosti reported. Morgan Stanley declined Bisnow’s request for comment.
Bloomberg Law in September reported Morgan Stanley was in talks to sell its stake back to Metropolis’ original developer, Kazakh company Capital Partners. An Alto Real Estate Funds managing partner said Capital Partners had acquired a portion of the shopping center, Forbes reports, although the split with Balchug and how Capital Partners acquired its share wasn’t clear.
Balchug, which is registered in Armenia and was founded by brothers David and Vardan Amaryan, isn’t a stranger to buying Russian assets. David Amaryan lives and works in Moscow, where he went on a Russian-stock buying spree after the start of the Russia-Ukraine War, according to The Wall Street Journal. Balchug did the same after Russia’s 2014 invasion of Crimea, the WSJ reported.
Amaryan operated Copperstone Capital before changing the name to Balchug Capital following a $10M settlement with the Securities and Exchange Commission in 2016. The SEC accused Copperstone of hacking unpublished press releases from three newswire services and using the information in the stolen press releases to profit in stock market trades. Amaryan and his affiliated firms didn’t admit wrongdoing as part of the settlement.
