Raising money for Moscow

This week has seen a flurry of capital-raising announcements from an unlikely source - Russian property.

First, distribution warehouse landlord Raven Russia said it wanted to buy a particularly large shed for $215m (£133m), which it will fund partly by debt and partly by issuing $104m of new preference shares. Second, a Moscow high-end office landlord called O1 Properties, which last month announced its intention to float on the London market, gave a guide price valuing the company at $1bn. The company wants the funds to make acquisitions and pay down debt.

O1 Properties' scale is notable - with a portfolio of eight offices and two development sites worth $2.1bn in total, the company would vault straight into the FTSE 350. But this scale may be a problem. The company wants to raise $425m, a substantial sum in a tough market for fundraising.

It has no obvious peers apart from Raven Russia, whose shares trade on a 16 per cent discount to book value and a 5 per cent dividend yield. O1's management will have to convince investors that it is a higher-quality investment or else dilute existing shareholders by raising funds at a discount. Much will depend on what kind of income it offers. No details have been disclosed, but it could be high - prime office rental yields were 8.75 per cent in Moscow at the end of 2011, says broker CBRE.

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