Yandex N.V. (YNDX - Free Report) recently announced that it has entered into agreements to acquire four hectares of land plot for its new headquarters in Moscow. The deal is valued at a total cost of approximately $145 million (exclusive of 18% VAT).
The land, known as the Kosygina Site, is situated at 15 Kosygina Street, Moscow, Russia. The deal is subject to further approvals by the Moscow City Government.
The complex includes seven buildings with around 80,000 square meters of Class A and B office space. Currently, 65% of the Kosygina Site is occupied by the Korston Hotel.
In connection with the above acquisition, Yandex has entered into other deals with Orlenok Hotel Compex OJSC and a number of additional owners of smaller adjacent facilities.
The deal will allow Yandex to improve its competitive position with expansion in Moscow. In addition, the deal will add efficiency to its production and operations by bringing more talent and expertise to the company.
After evaluating various aspects such as talent, long-term costs, employee experience and global connectivity, among others, Kosygina Site was chosen as the site for its new headquarters. On receiving the required approvals, the company plans to provide more updates on the anticipated timing and expenses related to the project development.
From a financial perspective, the one-time impact of the deal will be immediately reflected in the group’s financials at the closure of the deal.
Russia Holds Promise
Yandex’s strengthening footprint in Russia will continue to aid its market position in the country.
According to a latest report from Statista, revenues in the Russian e-commerce market are expected to reach $23.6 billion by 2022 at a CAGR of 8.2% between 2018 and 2022. Additionally, the number of e-commerce users is projected at 61.5 million for 2022.
We believe that Yandex is well poised to cater to this rapidly growing market, courtesy of the increasing penetration of internet and smartphone users in the country.
Arkady Volozh, Chief Executive Officer of Yandex, said, “We are very excited with the opportunity to create our own campus in the heart of Moscow, in close proximity to the science and educational cluster of Russia. We believe it will allow us to continue attracting new talent, help us grow, scale and invent new products and services for our users".
Zacks Rank & Stocks to Consider
Yandex currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the broader technology sector include AMETEK, Inc. (AME - Free Report) , QuinStreet, Inc. (QNST - Free Report) and Stamps.com Inc. (STMP - Free Report) , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Long-term earnings growth rate for AMETEK, QuinStreet and Stamps.com is currently pegged at 11.18%, 25% and 15%, respectively.
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