OREANDA-NEWS. CJSC Sberbank Asset Management is announcing the launch of a new closed-end real estate mutual fund called “Sberbank – Residential Real Estate” for non-qualified investors. The rules of fund custodial management were registered by the FSFM of Russia on March 12, 2013 (notification was published on the website of the FSFM). Plans are for the fund to begin being formed on March 26.

The fund will employ a strategy of investing in the acquisition of the contractual rights for equity participation in the construction of residential buildings at the stage following receipt of approval for construction in accordance with Federal Law №214-FZ. The plan entails the completed living space being sold upon construction of the infrastructure and when the completed buildings are put into service or after receipt of the certificate of ownership. As a result, the value and liquidity of the properties will increase on account of the availability of making mortgage-assisted purchases.

The life cycle of the fund will be three years. The traditional risks of investing in unfinished real estate are significantly reduced due to Federal Law №214-FZ, which protects the rights of investors who purchase not-yet constructed apartments. Investment will primarily be directed towards those properties which are financed and accredited by Sberbank.

The investment time frame for any given development project is between one and two and a half years, which allows for return on the investment to be maximized. Investment will focus on Moscow and adjoining suburbs. The base asset of the fund will be so-called “economy class” apartments which represent a more liquid segment of the residential real estate market. The end buyers of this category of real estate are quite price sensitive, which means that, if necessary, the investment can be exited quickly by lowering prices.