Investment case. A Swedish invest fund with a 15-year long track record realizes an investment project in the Chekhov district of the Moscow region to develop on a land plot of 200 ha a gated community of:

• 48 cottages
• 122 townhouses
• sports and leisure facilities (gym)
• 2 shops
• administrative buildings

According to the project, the cottages are 500-3,000 sqm big. They are built on land plots of 15-50 ares with gas, electricity, water and sewer system hooked up. Round-the-clock guard is available. There is a forest and a rivier in the vicinity with a paved approach road leading to it from the settlement.

Finance. Under the pessimistic scenario, the poject’s value upon completion is estimated at $250 mln, while its costs stand at  $180 mln. The costs breakdown is 10% for land pre-development, further 15% for the preparation of necessary documentation including the master plan and approvals and the rest for the construction. Residential spaces will be available for sale at the moment the project is launched and delivered to customers within 18 months from the start date. Since the unit price will be $0.6-1.8 mln, we focus on the upper-end middle class Muscovites with an annual income of over $100,000 per family.

Project progress. Currently, the project is at an early stage of implementation. The company is in the process of getting necessary approvals, attracting investors and negotiating with contractors. So far, the concept has been formed, the business plan and preliminary calculation have been performed. We expect the dwellings to be sold out before their delivery, making thus the payback period limited by 2 years.