The value of domestic shopping centres has plummeted, so thatmany projects are worth less than debts to banks.
The value decline is also reflected by the latest deal throughwhich East Balkan Properties (EBP) investment fund sold 51% inVitantis Bucureşti and Moldova Mall Iaşi for the symbolic sum of 5euros to George Teleman, the manager of five years of theLondon-listed fund's operations in the region.
EBP in 2006 paid 34.5m euros for Moldova Mall of downtown Iaşiand invested around 60m euros in Vitantis project located nearAutovit car fair, properties that are now worth around 57m euros,while the debt to UniCredit stands at 58.4m euros.
"The plan is to further manage the shopping centres and wait forthe market to pick up in four or five years' time. Management costswill be born by us, so that for East Balkan this deal will lead tofalling expenses. This has been the idea," George Teleman told ZF.Annual project management charges revolved around 350,000 euros,according to EBP.
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