Head of the Board of Directors of Ilim Group Zakhar Smushkin is planning to invest 28 billion roubles into real estate development business

Moscow, Feb 12. /Lesprom Network/. Head of the Board of Directors of Ilim Group Zakhar Smushkin is planning to invest 28 billion roubles into real estate development business in Leningrad region (Russia), as Russian business paper Veodmosti reports referring to an authority in the regional government. Smushkin confirmed through his representative that investments will be made through Start Development company which is not related to Ilim Group. As the Economic Development Committee of Leningrad region reports, on February 10 the project of Start Development was approved by the inter-department committee. In 5.5 years the developer is going to spend about 28 billion roubles on preparation of installation of industrial enterprises on 435 hectares in Gatchina municipality of Leningrad region of Russia. Developer's General Director Andrei Nazarov precised that at the first stage 4 billion roubles of own and loaned funds will be invested into establishment of engineering infrastructure. Then it is planned to gather investor pool out of the companies which want to build their enterprises at th site. The project entails in particular construction of 1.2 million sq m of warehouses. Food enterprises will have preference, said Nazarov. According to Mr Nazarov, Start Development is developing 15 projects in total, mainly economy class residential property and industrial parks, but all of them are at their early stages. As Vedomosti notes, Smushkin does have money for all this: in the autumn of 2007, Russian shareholders of Ilim sold 50% of its shares to International Paper for $650 million. Names of sellers were not disclosed, but International Paper report for the Q3 of 2007 mentioned Mr Smushkin among people who guaranteed transfer of share in Ilim. Smushkin runs a risk starting such a project amid the crisis: demand for industrial sites will grow only in 2-3 years, says General Director of Espro Investments Vladimir Frolov (Maryino industrial park (Moscow) developer). This time should be added to usual pay-back period of such projects, 5-7 years, warns Frolov. Start Development OJSC was established in May 2007, 100% of shares belongs to Perspectiva Investments CJSC, 99.96% of which are owned by Aurora Equities (according to Russian YeGRYuL - Official Single Register of Legal Entities). Financial performance of the company is not liable to disclosure.