Further to its previous announcement on January 11, 2012, Plaza Centers N.V., a leading emerging markets property developer, announces that certain indirect subsidiaries of EPN GP, LLC and EPN EDT Holdings II, LLC, Plaza's joint US subsidiaries, have successfully completed the sale of 47 US-based shopping centers to BRE DDR Retail Holdings LLC, a joint venture between Blackstone Real Estate and DDR Corp, for a purchase price of circa US $1.43 billion (approx. 1.1 billion).
Net of property level debt repaid or assumed and including cash and other net working capital items, the proceeds to EPN are approximately $530 million before taxes and transaction expenses.
The successful completion of the transaction generated a cash inflow for the company of $120 million (pre-tax and transaction costs), a significant return on its circa $82 million equity invested over a period of little over two years. This is in addition to a dividend received from EPN in September 2011 of $5.9 million.
During the investment period, Plaza and its joint venture partners were able to successfully restructure, reposition and improve the portfolio of 47 properties by taking EDT Retail Trust private and transferring key personnel and management from Australia to the US and undertaking a number of initiatives such as the refinancing of circa $500 million of portfolio debt, improving the cost structure, improving occupancy by 3% since EPN's initial acquisition of the properties and increasing the stabilized NOI of the properties via re-letting expiring lease agreements.
EPN continues to hold for sale two properties located in the United States which have a net value of approximately $30 million.
Ran Shtarkman, President and CEO of Plaza Centers N.V., said: "The successful completion of the sale of 47 US-based shopping centers marks the realization of a highly successful and profitable first investment in the US for Plaza.
"We continue to see excellent opportunities in the U.S. market to invest in attractive real estate assets which, through our expertise in active asset management, can create value through income generation and capital appreciation.
"We are currently considering further investment opportunities within the US market and the proceeds generated from our first venture provide us with significant firepower to do so."
Source: FTI Consulting