Rus News Journal

The Nizhniy Novgorod region postpones Pjaterochki

X5 Retail Group has faced problems of development of a network Pjaterochka in Nizhni Novgorod. The regional government has rejected three demands for allocation of the ground areas under building of shops, explaining it is intentions to use the platforms chosen by group under quarter building. Experts do not exclude that refusal of officials in realisation of projects X5 Retail Group can be connected with intentions of other investors to realise on the disputable areas the ritejlovye projects. The investment council at the governor of the Nizhniy Novgorod region has rejected three of four demands X5 Retail Group about allocation of the ground areas by the area about 2 thousand in sq. m under building of shops Pjaterochka . The company planned to construct two trading objects in Leninsk and on one in the Moscow and Nizhniy Novgorod areas of Nizhni Novgorod. As have explained in the regional ministry of an investment policy, some factors became a reason for rejection: on some sites project parametres come for a red line (a line of restriction of building), and some sites are burdened by the rights of the third parties.

X5 Retail Group (were Pyaterochka Holding) it is created on May, 18th, 2006 as a result of merge of two retail networks - the Crossroads and Pjaterochki . In the summer of 2008 the holding has got a network the Roundabout . 48,4 % X5 belong the Alpha - groups free float - about 25,3 %. For August, 30th, 2008 the company included 1464 shops Pjaterochka a format soft diskaunter 213 supermarkets the Crossroads and also 23 Roundabouts in Russia and in Ukraine. Net avails in 2007 - $5,32 billion In the Nizhniy Novgorod region work 24 Pjaterochki 17 Crossroads and two Roundabouts .

Till now X5 Retail Group preferred to place in the Nizhniy Novgorod region own shops Pjaterochka only on the rented areas, and now it is going to be spent for building of new shopping centres. The first time with the demand about earth allocation in Nizhni Novgorod the group left on regional investment council in September, 2008. Then officials have approved allocation in rent of the ground areas about 2 thousand in sq. m under building of first four shops Pjaterochka . It is supposed that trading objects will be constructed in the Moscow, Kanavinsky and Autofactory areas Bottom. Investments into building of each shop by the average area of 530 sq. m will make about $2 million Terms of building group promises to define to the beginning of 2009.

According to representative X5 Retail Group of Anna Karevoj, refusal of the government of the Nizhniy Novgorod region in allocation of the ground areas under the next four shops has been given reason this time by intention of officials to use the chosen sites for housing building. The director of department of trading and commercial real estate of holding Penny Lane Realty Alexey Mogila believes that complex building of the ground areas can be favourable and most X5 Retail Group: the Company can occupy the ground floors of apartment houses, instead of build own objects. It will manage it much more cheaply: if on building it is required an order of $1,2 - $1,5 thousand for 1 sq. m rent will manage within $250 for 1 sq. m. .

Analyst IK Brokerkreditservis Tatyana Bobrovsky does not exclude that government refusal can mean presence of other applicants on chosen X5 Retail Group the ground areas. Now crisis has concerned many investors, and the building branch has suffered in a greater degree. Therefore realisation of projects of quarter building can be postponed or be stretched for uncertain time, accordingly intentions X5 Retail Group can not be realised at all - the madam Bobrovsky explains.

Elena YEVSEYEV