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Raiffeisen and Strabag go on Russian building spree

Austrian investors have spent at least €3 billion ($4.22 billion) on the construction of offices and shopping complexes in Russia in the last two years.

Now Raiffeisen Evolution Emerges has joined their number. REE is a joint venture between Raiffeisen Bank and Strabag AG construction company, in which Oleg Deripaska owns a 30% share. It plans to invest more than €500 million in real estate in Moscow, St. Petersburg and other major Russian cities in the next three years. REE plans to build the San Cally Park Center on Ligovsky Prospekt in St. Petersburg by 2010. That complex will have a total area of 100,000 square meters, including 42,000 square meters of office space, 10,000 square meters of trading space, a 200-room hotel and the city’s largest entertainment center. In Moscow, the company plans to build the RDM Business Center on Leninsky Prospekt, 22,500 square meters in area, by 2009. Those projects will cost €200 million. The bank’s press service added that projects in Krasnodar and Ekaterinburg are also being considered.

REE was founded in 2003. It has €1.3 billion ($1.83 billion) invested in current projects in Austria and Eastern Europe. Sixty percent of the company belongs to Raiffeisen Bank, with 20% shares in the hands of Strabag and the Austrian insurance company Uniqua Versicherungen AG. The company’s financial indicators are not made public. Observers note that the company’s expansion in Russia will enable Strabag to increase its share of the Russian construction market significantly. According to Strabag director for Russia and the CIS Alexander Ortenberg, the company will act as general contractor and select its contractor by tender. Other Austrian companies active on the Russian real estate market are Strabag, Meinl Europen Land, Immoeast, TriGránit (a cofounder of Meinl Europen Land). (