Eurocommercial Properties N.V.announced that, following the recent decision to start the development of its shopping centre at Växjö in Sweden at an expected cost of 40 million, it has reached agreements to acquire two existing shopping centers; one in Emilia Romagna in Italy and the other in the greater Paris region in France.
The two centers fit well into the Company's existing portfolio of 30 prime retail properties situated in wealthy catchments in France, northern Italy and Sweden. The shopping centers are both hypermarket-anchored galleries of approximately 10,000 m² and 8,000 m² respectively. The total price for the two properties is expected to be approximately 100 million and the combined net initial yield about 6.5%. Eurocommercial has exclusivity on both properties and full details will be announced when the legal formalities and due diligence for the acquisitions have been completed, which is expected before the end of 2009.
Eurocommercial also announced that it is launching a non-pre-emptive accelerated equity offering of up to 3,593,000 new depositary receipts ("DRs"), representing 35,930,000 ordinary shares, which is approximately 9.9% of the outstanding ordinary share capital. The net proceeds of the Offering will be used to finance the acquisitions and the development of Växjö as it proceeds over the next 18 months.
Commenting on the announcements, Chief Executive Jeremy Lewis said, "Despite the economic difficulties of the last year, our markets of France, northern Italy and Sweden are now showing positive GDP growth and unemployment levels could well peak in 2010. We think that the resilience demonstrated by our shopping center rents and turnover during the recession provides a firm base for future growth as economies recover further."