New Europe Property seals deal for Czech mall

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New Europe Property Investments finalises its buyout of the Forum Ústí nad Labem shopping center in the Czech Republic for EUR83m, from existing cash resources.

This latest acquisition further entrenches its position in eastern European property markets.

The town of Ústí nad Labem has a population of about 93,000. It is the capital of the Ústecký region in the north of the country, which is home to about 820,000 people.

The mall is the dominant retail centre in the region, and has good footfall.

The centre has about 27,800m² of gross leasable area and opened for trading in late 2009.

The acquisition was completed last week.

"They understand the East European market," said Ma’alot Investments head Maurice Shapiro.

He said Nepi’s acquisitions were usually accretive and positive, although there was some "political risk" in eastern Europe.

Such political risk had been most evident in Poland, where a new government had replaced executives at state-owned companies with party loyalists.

The Forum Ústí nad Labem mall is anchored by a supermarket, and has numerous international brands including Adidas, H&M, KFC, and Tommy Hilfiger, as well as a cinema.

Ústí nad Labem is on a railway and a soon-to-be-completed highway linking it to the capital Prague and Dresden in Germany.

Grindrod Asset Management chief investment officer Ian Anderson said on Wednesday the acquisition was quite small for Nepi. He also said that, given the "influx of foreign investors throughout eastern Europe", property companies needed to look for new destinations that were not "saturated by cheap, foreign capital".

"Maybe the Czech Republic fits that bill. Redefine’s acquisition in Poland, where they had to outbid more than 10 other interested parties including investors with strong ties to SA, shows just how much money is chasing investment opportunities in eastern Europe," he said.

"But each one of these countries comes with its own specific risks, none more so than the ‘new’ Poland," Mr Anderson added.


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