Plaza Centers agrees to sell Arena Plaza for about EUR 400 m

The company said the facility would be sold for around EUR 400 million. In September 2006, aAIM launched a GBP 2 billion acquisition programme for its European Symmetry Fund in partnership with Bank of Scotland.

“The purchase price will be finally determined on the completion of the transaction, which is expected to take place within a month of Arena Plaza's opening date, on the basis of the actual rent levels achieved being capitalized at an agreed yield," the company said in a statement on 7 August.

Plaza Centers will remain responsible for the letting of the centre's remaining units for a period of up to one year following the closing, and is anticipated to benefit from further price adjustments reflecting the signing of any additional leases during the two consecutive earn-out periods, which end three months and 12 months respectively following the completion.

Plaza Centers management estimates the final transaction price based on actual rent levels will be no less than about EUR 380 million, with an overall transaction price cap of EUR 400 million, as agreed with aAIM.

“The final expected transaction price represents a significant upside comparing to the project's estimated value upon completion at the time of the company's admission to trading in November 2006, which was circa EUR 333 m.

Designed and developed by Plaza Centers following the acquisition of this landmark site by the company in late 2005, Arena Plaza is Hungary's largest shopping and entertainment centre. It comprises 220 stores located throughout cc. 66,000 sqm of letable area and is serviced by over 2,800 parking spaces.

The centre is scheduled to open in the fourth quarter of 2007 (end-October, according to Portfolio.hu's information) whereupon, subject to the fulfilment of certain conditions, the transaction will be completed.


Amongst the international anchor tenants of the centre are Tesco, the Inditex Group and Peek & Cloppenburg, together with other major retailers such as H&M, Electro World, Hervis and C&A.

Additionally, Arena Plaza will accommodate a 23-screen Cinema City complex, which includes Hungary's first IMAX theatre. The centre is currently over 85% pre-let.

“The profit from the sale will be recognised mainly over 2007 with adjustments in 2008 and, in part, distributed in accordance with the Company's dividend policy, announced following its successful listing on the London Stock Exchange last November."

“Arena Plaza is one of the largest and most prestigious shopping and entertainment centres in Central and Eastern Europe [...]," said Ran Shtarkman, Chief Executive of Plaza Centers.

Upon completion, the project will represent Plaza Centers' 25th shopping and entertainment centre in the region and the company's 17th shopping and entertainment centre in Hungary. In addition, PC has fifteen other projects in its pipeline in different stages of development.

“The Arena Plaza confirms Budapest's position among the major and diverse cities in Europe and has been a significant example of Plaza's mega, strategic development projects, such as the large gambling and leisure resort on Dream Island in Budapest and the Casa Radio landmark scheme in the heart of Bucharest which comprises more than 500,000 sqm of build area, including one of the biggest shopping and entertainment centres in the region, residential and office space, a hotel, casino, hypermarket, convention and conference hall and parking facilities," Shtarkman added.

“The sale of Arena Plaza demonstrates our ability to act decisively both to create real value in the development of premier retail destinations with premier tenants and brands in our chosen markets, to create significant value for the Company and to generate strong returns for our shareholders," he noted.

Plaza Centers will also continue “to further diversify and enrich its portfolio through the development of other high-quality shopping and entertainment centres and mixed used projects both in the Central and Eastern European region and India," the CEO concluded."

Source: Portfolio Online Financial Journal