Narrative
Full Description
Project narrative
On December 20, 2004, Shanghai Overseas United Investment Company (SHOIC) and the local authorities in the city of St. Petersburg signed an agreement regarding the Baltic Pearl Project. Then, in March 2006, China Eximbank issued a $500 million loan (with an 8-year maturity) to Shanghai Overseas United Investment Company (SHOIC) for the project, which involved the construction of housing units, commercial buildings, roads, bridges, schools, clinics, police departments in a district [Krasnoselsky District or Красносе́льский райо́н in Russian] located in the southwestern part of the city of St. Petersburg. Construction activities included 1 million square meters of housing, 320,000 square meters of commercial real estate, transport infrastructure, 4 schools, 7 kindergartens, adult and children's clinics, and police departments. CJSC Baltic Pearl [ЗАО «Балтийская жемчужина»], a project company and subsidiary of the Shanghai Overseas United Investment Company (SHOIC), was responsible for implementation. A foundation stone-laying ceremony took place on June 9, 2005. However, construction did not begin until March 23, 2006. Then, on September 25, 2008, residential and commercial real estate sales began. On August 24, 2013, the Pearl Plaza Shopping and Leisure Center opened to the public. The 96,000 square-meter shopping center contains supermarket, cinema and a range of other services. It can accommodate 25,000 guests a day. As of 2019, the company completed 7 residential real estate developments: Peal Premiere, Pearl Symphony, 2 phases of the Duderhof Club, 3 phases of Pearl Frigate, Baltic Pearl and Pearl Plaza. Pearl Coast, Pearl Cascade, and Pearl Harbor were expected to reach completion in late 2020-early 2021.
Staff comments
1. This project is also known as the St Petersburg Strategic Investment Project. The Chinese project title is “波罗的海明珠”项目 or 波罗的海珍珠项目. The Russian project title is «Балти́йская жемчу́жина». 2. In 2007, Shimao International Holdings Limited and Perfect Zone International Limited disclosed in a public filing that their participation in the Baltic Pearl Project had "been suspended due to the fact that certain terms on project development were not fulfilled or waived within the extended period." In the same filing, Shimao International Holdings Limited and Perfect Zone International Limited explain that "various measures were imposed by the Russian Government in 2006 and 2007 including, among others, the reduction of the weight of goods which can be carried cross-border by Russians from the PRC to Russia free of tariff and the introduction of the 'Ban on Commerce' which has restricted foreigners to conduct retail business within Russia. All these measures affected not only the Sino-Russian cross-border trade but also the leasing of the Group’s shopping malls and hotels." Shanghai Overseas United Investment Company Limited (上海海外聯合投資股份有限公司) is apparently owned in part or in whole by Shimao International Holdings Limited and Perfect Zone International Limited. It is not clear if China Eximbank suspended its loan for the project. Nor is it clear if another Chinese company was selected to support the implementation of the project. These issues merit further investigation.