Brief review of hotel real estate market in Moscow

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1 Brief review of hotel real estate market in Moscow 2012 Prepared by GVA Sawyer

2 Hotel real estate market in Moscow The number of hotel rooms commissioned in Moscow in 2012 was the least as compared to the rates of the last five years. 3* hotels took the most part in the room stock structure. However, 2012 became the year of the biggest transactions on the hotel real estate market in Moscow. Transactions on selling such facilities as Natsional Hotel, Metropol Hotel, Radisson SAS Slavyanskaya Hotel, Intercontinental Moscow Tverskaya Hotel, and others, were made. Table 1. Main indicators of hotel real estate market in Moscow, 2012 Main indicators Highest quality (5*) High quality (4*) Medium quality (3*) Quantity of rooms at the end of Q Delivery of rooms in Quantity of certified hotels at the end of Average occupancy rate in % 68-71% 63-65% Average daily rate (ADR), rub./day According to the order of Ministry for Sport, Tourism and Youth Policy of the Russian Federation of January 25, 2011 No.35 on the Endorsement of the Procedure of Objects of the Tourist Industry, including hotels and Other Accommodations, Pistes, Beaches. 2 ADR average daily rate, that is calculated by dividing the average rental income per occupied rooms by the number of rooms sold. Prepared by GVA Sawyer

3 Supply At the end of Q volume of a quality room stock amounted to 21 thous. rooms. In Q the room stock didn t increase in Moscow. In 2012 the room stock increased by a total of 253 rooms in Moscow, that was less than the rate of the previous year. In 2012 an increase in supply for hotels was for 3-4* hotels. Table 2. Projects of Moscow hotel real estate, commissioned in 2012 Name Quality/ room stock Commissioning Mercure Arbat 4*/109 1Q2012 Azimut Moscow 3*/144 2Q2012 Tylskaya Total rooms Quality supply was currently geographically differentiated, the main room stock prevailed in CAD (46% from volume of supply). Chart 1. Distribution of room stock by districts, hotel rooms At the end of 2012 a share of 3* hotels amounted to 35%, 4* hotels 38%, and 5* hotels 27% of all quality room stock in the room stock structure (taking into account the certification which should be undergone by 3* hotels ( Mitino ), 4* hotels ( Alfa, Best Western Vega, Delta ) and 5* hotels ( Mamezon Pokrovka, Swissotel Krasnye Holmy )). In 2012 several big transactions of hotels purchase and sale were made: Natsional Hotel Ltd (Moscow) was purchased by Smart Finance Group CJSC. The transaction charge amounted to $156 million; Moscow authorities sold 30% of a total share of Hilton Moscow Leningradskaya Hotel to Sadko-Hotel Company. The transaction charge amounted to $36 million; Bin Group made a transaction on purchase of assets of Unikor Management Company (Sammit BC, including Intercontinental Moscow Tverskaya Hotel and Lux Hotel). The transaction charge amounted to $982 million; Ownership title to Moscow hotel Metropol was purchased by Investor Aleksandr Klyachin, who also owned the hotel chain AZIMUT Hotels. Purchase investments amounted to $296 million; Budapesht Hotel was bought by Novostroy+ company. Investments - $34,5 million; the winner of the auction on buying Radisson SAS Slavyanskaya Hotel became Hotel-Invest LLC. The transaction charge - $175 million. The change of the Moscow mayor determined the hotel market development for the next few years. The order of the industry scheme of hotels location in Moscow was signed at the end of According to this decision the room stock must increase by 80 thous. rooms (355 hotels). The implementation of the program will be divided into two stages. According to the scheme 65% of the city hotels will have become 2-3 star category hotels by Only the territory of Staraya Moskva was included into development plans. This year authorities have approved the construction of several hotels located at the following addresses: Sokolnichesky Val Street, vladenie 37. Room stock might amount to about rooms; Dosflota Proezd, vladenie 10, bldg. 1. Room stock about rooms; Prepared by GVA Sawyer

3d Parkovaya Street. Room stock about 150-200 rooms; Bagrationovsky Proezd, vladenie 1A. Room stock about 300-350 rooms; Oktyabrskaya Street, vladenie 98.

4 3d Parkovaya Street. Room stock about rooms; Bagrationovsky Proezd, vladenie 1A. Room stock about rooms; Oktyabrskaya Street, vladenie 98. An administrative building including a hotel complex, with a total area of 43,9 thous. sq m, are planned to be constructed there. An interest of international hotel operators in increasing a number of hotels was noted. So, the American hotel chain «Morgans Hotel Group» announced about expanding their hotel chain and about opening the first Delano brand s hotel in Russia which would be located on the territory of BC Moscow-City. The hotel room stock will consist of 160 rooms. Commissioning of the hotel is planned to be in In Q Mospromstroy announced that after reconstruction of Tsentralnaya Hotel, a hotel managed by the international operator Mandarin Oriental Hotel Group will have been opened by Experts of GVA Sawyer noted a tendency to an increase in an interest of hotel operators in exhibition area. The permission was given which allowed to build two hotels on the territory of Ekspotsentr. A room stock of the hotels will amount to 100 and 150 rooms. Terms of the project realization as well as a hotel operator have not been determined yet. In the project Crocus City Crocus Group Company plans to construct 22-storey hotel within the first phase of the multifunction complex construction. According to preliminary forecasts, Marriott International will run the hotel. The hotel room stock may amount to 250 rooms. More over, the hotel will include 200 apartments, a total area of the hotel will amount to 30 thousand sq m. Earlier, it was announced that Holiday Inn Hotel would be included in phase 1 of the construction. Hotels, planned to be commissioned in 2013, as well as postponed hotel projects are expected to be opened in Table 3. Projects of hotel real estate in Moscow, opening in 2013 Name Quality/ room stock Marriott Novy Arbat 5*/ Nikolskaya Kempinski 5*/ Moscow Moscow 5*/ Double Tree by Hilton 4*/ Moscow Vnukovo Airport Hotel Novotel 4*/ Moscow City DoubleTree by Hilton 4*/ Moscow Leningradsky Riverside Hilton Garden Inn 4*/ Moscow New Riga Boutique-hotel «Pushkin» 4*/ Hotel in MFC n/a 2013 «Akvamarin» Total rooms Commissioning So, a total room stock will have amounted to 23 thous. rooms by the end of In 2013 a shortage of any class hotel rooms will remain, and it may amount to 40-45% of a total room stock. The main tendencies of 2012: Decrease in delivery volumes of new hotel facilities; Growth in hotel real estate investment transactions. Chart 2. Changes in dynamics of quality room stock in , estimates of 2013 (including certified hotels at the end of 2012) Prepared by GVA Sawyer

5 Demand and financial terms According to the results of 2012 average occupancy rate increased slightly as compared to the same period of the last year. Average occupancy rate of 3* hotels amounted to 63-65%, 4* hotels %, 5* hotels %. According to the data of Rosstat a number of foreign people, arrived to the RF for 9 months of 2012, increased by 13% in comparison with the same period of 2011, and amounted to 21 million people. According to the preliminary results of 2012 a number of tourists arrived to Moscow amounted up to 5 million people, that might be considered to be a record rate. In Q there was still the tendency to a decrease in the accommodation cost for a standard quest room in quality 3* hotels as compared to the accommodation cost of the same periods of the last years. In Q an average accommodation cost for a standard quest room in 3* hotels decreased by 17% and amounted to rubles, in 4* hotels the accommodation cost amounted to rub. for a room, in 5* hotels rub. for a room. Prepared by GVA Sawyer

6 Аналитический документ по исследованию рынка недвижимости 2012 GVA Worldwide Contacts Australia Austria Belgium Bulgaria China Cyprus Denmark Estonia Finland Germany Great Britain Greece Hong Kong (PRC) Hungary India Ireland Italy Lithuania Netherlands New Zealand Poland Portugal Rumania Russia Sweden Switzerland USA Head office (Moscow) Bernikovskaya Embankment House , Russia, Moscow Nikoloyamskaya Ul., 13, str.17 Тel: +7 (495) Fax: +7 (495) Office in St. Petersburg BC Mir, Efimova Ul., 4a, office St. Petersburg, Russia Тel: +7 (812) Office in Krasnoyarsk Diktatura Proletariata Ul., 32 office Krasnoyarsk, Russia Тel: + 7 (391) info@gvasawyer.com Office in Krasnodar Krasnodar, Russia Zipovskaya 5, building 6, office 209 Тel: +7 (495) info@gvasawyer.com Подготовлено GVA Sawyer

Brief review of hotel real estate market in Krasnodar

Краткий обзор рынка гостиничной недвижимости Краснодара за 1 кв. 2011 г. Brief review of hotel real estate market in Krasnodar 2012 Подготовлено GVA Sawyer 2012 1 Hotel real estate market At the end of