IMMOEAST has begun implementing its announced sales program involving the sale of parts of its portfolio in Central Europe. The first step involves the sale of stakes in three properties in the Czech Republic and Estonia.
The largest transaction concerns the Palladium shopping center in the Czech capital of Prague. IMMOEAST acquired a stake in the 60,000-m² shopping and office center in 2000 through its stake in the European Property Group. The property, situated in the city center, was largely pre-let prior to completion, attracting numerous prestigious anchor tenants such as H&M, Marks & Spencers and Nike.
A further stake in the Moravian city of Olomouc was also sold. The Olympia shopping center, providing somewhat more than 30,000 m² of floor space, has had vacancy rates of practically zero for years, and is the most important shopping center in the region.
Sales negotiations concerning the Haabersti housing development project in Tallinn were also recently concluded. The project, which involves the development of around 800 apartments, has been sold to one of the largest Finnish construction and real estate development companies. IMMOFINANZ held a 45% stake in the project company, founded in cooperation with British housing developer Grainger and a local developer.
All three sales have not only resulted in large profits, the proceeds from the sales are also significantly above the market value determined by third party experts. In all three deals, agreement was reached with the buyers not to disclose the sales price. "In any case, it has clearly been demonstrated that the valuations quoted by the real estate enterprises charged with the appraisal (DTZ, Colliers) are not only realistic, but in fact even rather conservative," explains CEO Karl Petrikovics. "Our Central European investments have resulted in excellent appreciation in value, which we are now cashing in on."
Further properties with a total value of €1 to 1.5 billion are to be sold, especially those acquired some time ago and for which no short-term appreciation in value is forecast. "For many institutional investors, especially funds, these properties are perfect investment opportunities, whilst we, in the scope of our active portfolio management, are increasingly shifting our focus towards South East Europe and the former Soviet Union," says Petrikovics. As such, 43.4% of the €6 billion in investments planned for the 2007/08 business year will be allotted to South East Europe; 23.9% to Russia and Ukraine.