The sale concerns the Group's shopping center, Galeria Tarnovia, in Tarnow and a new development project in Jelenia Gora.
Galeria Tarnovia comprises a 16,500 m² shopping center.
Heitman takes over 70% of the projects via investment in a holding company. Heitman, founded in 1966 and headquartered in Chicago, manages approximately 21 billion in assets invested directly and indirectly in real estate in North America, Europe and Asia-Pacific.
The firm's clients include institutions, pension plans, endowments and foundations, and individual investors. European private equity investments span 15 countries with approximately 4 billion currently under management. A leading investor in the region, Heitman has over 50 people across Europe in its offices in London, Warsaw, Luxembourg and Moscow.
Galeria Tarnovia, shopping center, Tarnow, Poland
The Galeria Tarnovia shopping center is one of TK Development's major completed projects. The project comprises a 16,500 m² shopping center, consisting of a supermarket of about 2,000 m² and specialty stores of about 14,500 m². The center opened in November 2009 and has basically been fully let since then, with satisfactory operations and customer influx.
The sales price is in the region of 40 million. The current external financing in the project is continued, and Heitman makes financing available for the company pro rata to their ownership interest. TK Development will realize a small profit on the project and will free up liquidity.
Shopping center, Jelenia Gora, Poland
TK Development has bought a plot of land in Jelenia Gora, Poland, and has an option on additional land for the development of a shopping center of approx. 24,000 m². The project will comprise a supermarket of about 3,500 m² and retail, restaurant and service premises of about 20,500 m². The local plan for the area is in place, and the letting of premises has started. Construction is expected to start in 2013 and opening is scheduled for 2015.
Heitman joins the project with a 70% ownership interest at the current development stage, and the future development of the project, including the construction of the project, will take place in partnership with Heitman. The total project value is expected to be around 55 million. The partnership will allow for a more optimal exploitation of the Group's resources, including equity allocation, as Heitman will make financing available pro rata to their ownership interest.
The agreement involves further maturing of Galeria Tarnovia, Tarnow, as well as startup and maturing of the shopping center in Jelenia Gora after the expected opening in 2015. After this, the projects are intended to be resold. It has been agreed that resale can be realized after a period of three years from the conclusion of the agreement.
The agreement provides a preference return for Heitman, while TK Development has access to a performance-related share of any additional proceeds from reselling the projects. In addition, TK Development will receive fees from the jointly owned company for development, letting and