Dawnay, Day Carpathian PLC, the retail property investment company established to invest in Central and Eastern Europe, is pleased to announce that it has acquired a third multi-purpose development site for a value in excess of 6.5 mln. in Baia Mare, Romania, to be funded out of existing cash resources. This acquisition is the third of the four pipeline deals identified by the Company's property investment manager, Dawnay, Day PanTerra Limited at the time of the second fund raising completed in May 2007.
Baia Mare Development
Baia Mare is the administrative City of the county of Maramures, and one of the largest cities in Romania. It is significant in the region of the north-west in terms of commerce, trading, culture and in its proximity to the Hungarian border. The site is approximately 58,900 m² and the planned development is estimated at 34,000 m² gross lettable area and will comprise a retail and entertainment complex.
The plot is situated on the western edge of town between two major motorways. The site benefits from a large catchment area, good access and transport links from the important areas of the city. A preliminary planning consent (or PUD) is in place, and construction is expected to commence in September 2008. The estimated gross development value of the project is expected to be 68 mln., to be financed through a mixture of equity and debt in line with previous tranasctions. The project is expected to be completed within approximately 23 months. Based on a capitalisation yield of 7%, this puts the estimated project value upon completion at 89 mln.
This development is also to be undertaken in conjunction with a local partner described in the previous announcement dated 28 September 2007. The joint venture has been arranged by the Property Advisor to operate in the local market as Atrium Developments. It is also intended that Atrium joint venture will include the Cluj-Napoca and Arad transactions previously announced on 15 August 2007 and 28 September 2007 respectively.
The acquisition is a share purchase transaction from two holding companies in which members of the Dawnay, Day Group have a controlling interest and represents the Company's fourth investment in Romania and the seventeenth transaction overall. The leasing of the space, arranged through Cushman and Wakefield, is under way and progressing well.
Following the acquisition, members of the Dawnay, Day Group have agreed to subscribe for an estimated 1 million of new ordinary shares in DDC, representing profits from the Baia Mare Transaction.
Commenting on the acquisition, Rupert Cottrell, Chairman of Dawnay, Day Carpathian PLC said "DDC is confident in the development opportunities in the retail market in Romania and is pleased to announce its third such project. This investment will further underline our presence in the market and enable us to benefit from economies of scale with relation to the construction and development process."
Source: Dawnay,Day Carpathian