Plaza Regulatory News (PLAZ)

7 Aug 2007 11:00

Plaza Centers N.V.07 August 2007 7 August 2007 PLAZA EXECUTES AGREEMENT FOR SALE OF THE ARENA PLAZA, BUDAPEST, FOR CIRCA €400 MILLION Plaza Centers N.V. ("Plaza Centers" or "the Company"), a leading emergingmarkets property developer, today announces that it has executed a bindingagreement for the sale of its Arena Plaza shopping and entertainment centre inBudapest to UK based Active Asset Investment Management ('aAIM'), one of theUK's fastest growing commercial property investment groups. In September 2006,aAIM launched a £2 billion acquisition programme for its European Symmetry Fundin partnership with Bank of Scotland. The estimated consideration for the acquisition of the Arena Plaza shopping andentertainment centre is approximately €400 million. The purchase price will be finally determined on the completion of thetransaction, which is expected to take place within a month of Arena Plaza'sopening date, on the basis of the actual rent levels achieved being capitalizedat an agreed yield. Plaza Centers will remain responsible for the letting ofthe centre's remaining units for a period of up to one year following theclosing, and is anticipated to benefit from further price adjustments reflectingthe signing of any additional leases during the two consecutive earn-outperiods, which end three months and 12 months respectively following thecompletion. The Company's management estimates the final transaction price based on actualrent levels will be no less than circa €380 million, with an overall transactionprice cap of €400 million, as agreed with aAIM. The final expected transactionprice represents a significant upside comparing to the project's estimated valueupon completion at the time of the Company's Admission to trading in November2006, which was circa €333 million. Designed and developed by Plaza Centers following the acquisition of thislandmark site by the Company in late 2005, Arena Plaza is Hungary's largestshopping and entertainment centre. It comprises 220 stores located throughoutapproximately 66,000 sqm of lettable area and is serviced by over 2,800 parkingspaces. The centre is scheduled to open in the fourth quarter of 2007 whereupon,subject to the fulfilment of certain conditions, the transaction will becompleted. Amongst the international anchor tenants of the centre are Tesco,the Inditex Group and Peek & Cloppenburg, together with other major retailerssuch as H&M, Electro World, Hervis and C&A. Additionally, Arena Plaza willaccommodate a 23-screen Cinema City complex, which includes Hungary's first IMAXtheatre. The centre is currently over 85% pre-let. The profit from the sale will be recognised mainly over 2007 with adjustments in2008 and, in part, distributed in accordance with the Company's dividend policy,announced following its successful listing on the London Stock Exchange lastNovember. Commenting on the sale, Ran Shtarkman, Chief Executive of Plaza Centers, said: "Arena Plaza is one of the largest and most prestigious shopping andentertainment centres in Central and Eastern Europe, the design and ambition ofwhich has set new standards for the region ever since we first acquired the sitein late 2005. In developing Hungary's largest shopping centre, we have providedan exciting new commercial centre for Budapest and a compelling destination fornational and international tenants and visitors. Upon completion, the projectwill represent our 25th shopping and entertainment centre in the region and our17th shopping and entertainment centre in Hungary. In addition, we have fifteenother projects in our pipeline in different stages of development. "The Arena Plaza confirms Budapest's position among the major and diverse citiesin Europe and has been a significant example of Plaza's mega, strategicdevelopment projects, such as the large gambling and leisure resort on DreamIsland in Budapest and the Casa Radio landmark scheme in the heart of Bucharestwhich comprises more than 500,000 sq m of build area, including one of thebiggest shopping and entertainment centres in the region, residential and officespace, a hotel, casino, hypermarket, convention and conference hall and parkingfacilities. "The sale of Arena Plaza demonstrates our ability to act decisively both tocreate real value in the development of premier retail destinations with premiertenants and brands in our chosen markets, to create significant value for theCompany and to generate strong returns for our shareholders. It also clearlyillustrates the ability of the management team to develop major, high valueassets and then sell them to third parties in order to recycle the Company'scapital. "We look forward to fulfilling our management role on behalf of aAIM over thecoming months to fully complete and lease up the project. We will also continueto further diversify and enrich the Company's portfolio through the developmentof other high quality shopping and entertainment centres and mixed used projectsboth in the Central and Eastern European region and India." For further details, please contact: Plaza Centers Mordechay Zisser, Chairman +972 3 608 6000 Ran Shtarkman, President and CEO +36 1 462 7221 Roy Linden, CFO +36 1 462 7105 Financial Dynamics +44 20 7831 3113 Stephanie Highett / Lauren Mills Notes to Editors Plaza Centers N.V. (www.plazacenters.com) is a leading emerging marketsdeveloper of shopping and entertainment centers, focusing on constructing newcenters and, where there is significant redevelopment potential, redevelopingexisting centers, in both capital cities and important regional centers. TheCompany is an indirect subsidiary of Elbit Medical Imaging Ltd. ("EMIL"), anIsraeli public company whose shares are traded on both the Tel Aviv StockExchange in Israel and the NASDAQ Global Market in the United States. Plaza Centers is a member of the Europe Israel Group of companies which iscontrolled by its founder, Mr Mordechay Zisser. It has been present in realestate development in emerging markets for over 11 years. This information is provided by RNS The company news service from the London Stock Exchange