UK's New Europe Property Investments (NEPI) investment fund isset to take over a retail park developed by BelRom Belgian companyin Braila, in a 63m-euro deal. The first deal involving a shoppingcentre this year is taking place in the city where the first mallever, Armonia Center, was closed.
NEPI plans to also buy the projects BelRom developed in Focsaniand Bacau, with total investments in the three projects due to gobeyond 160m euros, Martin Slabbert, managing director with NEPI,told ZF.
The British fund is now investing its money on a market that isdiving, in which investments have plummeted by more than 90%, andwhich has not witnessed any significant deal for more than ayear.
The project in Braila has a 53,000 square-metre lettable area,tenants such as Carrefour, Bricostore or Staer and would generaterevenues worth 5.88m euros from rents, namely an initial investmentreturn of 9.3%, in euros, per year.
BelRom announced it planned to sell the project as early asApril 2008, but talks with NEPI, the only interested buyer, startedthis January.
NEPI last week signed the agreement to take over European RetailPark of Braila from BelRom in a 63m-euro deal that includes thepayment of debts and shares in the British fund.
"We had to start somewhere. Nobody can ever know when there is agood time to buy. You look at the value and if it seems right toyou, you sign. Even Warren Buffett has made mistakes." This is howSlabbert accounts for the decision to take over the centre inBraila.
The acquisition of the three projects is partially financed byBelgian bank KBC through an 113m-euro financing line. The deal isalso financed through a stock issue, with BelRom shareholdersgetting 3.5 million shares worth 7.5-8m euros. The rest is the cashcontribution by NEPI.
BelRom sells the centre for 63m euros, after developmentinvestments amounted to 60m euros. Domestically, BelRom also soldEuropean Retail Park Sibiu in a 83m-euro deal in 2006, as well asEuropean Retail Park Targu Mures in a 92m-euro deal in 2007,projects in which investments had not topped 60m euros.
BelRom is also developing retail parks in Deva, Severin, RamnicuValcea, Botosani and Roman and the partnership with NEPI may haveanother form, as well. "We're in talks with BelRom to invest inanother two projects developed by them (...)," Slabbert said.
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