Adams Regulatory News (ADA)

28 Sep 2007 07:04

Dawnay, Day Carpathian PLC28 September 2007 Dawnay, Day Carpathian PLC ("DDC" or the "Company") Announces the Acquisition of multi-purpose development sites in Arad, Romania Dawnay, Day Carpathian PLC, the retail property investment company establishedto invest in Central and Eastern Europe, is pleased to announce that it hasacquired two land plots, together forming a multi-purpose development site forthe combined value of €11.8 million (£8.3 million) in Arad, Romania (the "Arad Development" or "Arad Transaction"). This acquisition follows on from the acquisition of the development site in Cluj-Napoca, Romania announced in August 2007 and is the second of the four pipeline deals identified by the Company's property investment manager, Dawnay, Day PanTerra Limited (the "Property Advisor") at the time of the second fund raising completed in May 2007. Arad Development Arad is one of the largest cities in Romania, situated in the west of thecountry on the River Mures, which is an important industrial centre andtransportation hub. The Arad Development site is located in close proximity tothe city center and covers a total area of approximately 24,500 sqm. The planneddevelopment will have a gross lettable area of approximately 29,000 sqmcomprising a state of the art retail and entertainment complex. The site is highly visible to passing traffic being located along 160 metres ofa main highway. It benefits from excellent transport links, given the closeproximity to local rail and bus stations as well as to the tram line, making iteasily accessible from all parts of the city. The potential catchment area issubstantial being situated between a densely populated residential area and thecity centre. A preliminary planning consent (or PUD) is in place, andconstruction is expected to commence before the end of the year. The estimatedtotal investment is €72 million and completion is being targeted for the end of2008. Based on a capitalisation yield of 7%, this puts the estimated projectvalue upon completion at €87 million. This development is to be undertaken in conjunction with a local partner, whohas been responsible for sourcing the transaction and securing planning consentand who has been involved in a number of shopping centre projects in the region.The joint venture has been arranged by the Property Advisor to operate in thelocal market as Atrium Developments. It is intended for DDC to become a party tothis joint venture under which the local partner will source and introduce allretail transactions exclusively to DDC in the region. The local partner will beentitled to a 25% interest in all joint venture projects once a rate of returnhas been achieved. It is also intended that the Atrium joint venture willinclude the Cluj-Napoca transaction previously announced on 15 August 2007,following its introduction to the Property Advisor through the same localpartner. Further details on the joint venture agreement will be announced oncethe legal arrangements are concluded. The acquisition is a share purchase transaction from a UK holding company inwhich members of the Dawnay, Day Group have a controlling interest andrepresents the Company's third investment in Romania and the fifteenthtransaction overall. The Arad Development has been purchased with financingarranged by the Property Advisor and this debt is intended to be refinanced witha construction loan when the project commences next year. The leasing of thespace, arranged through DTZ Echinox, is well under way. Following the acquisition, members of the Dawnay, Day Group have agreed tosubscribe for an estimated €3 million of new ordinary shares in DDC,representing profits from the Arad Transaction. Commenting on the acquisition, Rupert Cottrell, Chairman of Dawnay, DayCarpathian PLC said "DDC believes the two development opportunities we haveannounced in Romania together with our pipeline of further projects in thismarket represent a solid platform to generate excellent returns forshareholders. These investments will also result in us establishing a strongRomanian presence enabling us to benefit from economies of scale with relationto the construction and development process." Enquiries: Dawnay, Day PanTerra Peter Klimt 020 7834 8060 Paul Rogers Balazs CsepregiCardew Group Tim Robertson 020 7930 0777 Catherine Maitland Numis Securities Bruce Garrow 020 7260 1000 Anthony Richardson This information is provided by RNS The company news service from the London Stock Exchange