Amstelland MDC has acquired an interest of 50 per cent in the Czech property developer Retail Development Company A.S. (RDC). The interest was acquired from Ahold Real Estate BV, which is retaining the other 50 per cent. Amstelland MDC and Ahold Real Estate will be managing RDC jointly.
RDC is one of the largest developers of shopping centres, supermarkets and hypermarkets in the Czech Republic. The stores are developed on behalf of the Ahold subsidiaries Hypernova and the supermarket chain Albert. The shopping centres in the Czech Republic are branded â€˜Olympia Centerâ€™. RDC has already built shopping centres on this format in Brno (52,000 mÂ²), Teplice (30,000 mÂ²) and Mlada Boleslav (26,000 mÂ²).
Growth in European shopping centres
The acquisition of the interest is in line with Amstelland MDCâ€™s strategy of growing its European shopping centre development activities over the next few years. Amstelland MDC expects turnover on retail projects to increase by 26 per cent in the years ahead (2002 forecast) to 41 per cent of the total (2004). The emphasis will be on projects outside the Netherlands. In 2002, approximately 22 per cent of turnover will come from outside the country; this figure is expected to rise to 38 per cent by 2004. Amstelland MDC generally attains a higher gross margin on retail projects outside the Netherlands than it does on office projects at home.
Amstelland MDC operates in retail property development in nine European countries. This week, the Portuguese prime minister Barroso opened the Almada Forum shopping centre in Lisbon. MDC, the company taken over by Amstelland in August, has developed Europeâ€™s third largest retail project in the city, with a total area of 110,000 mÂ², including 35 restaurants, cinemas and an entertainment centre. The 260 shops have all been let. The centre, which involves a total investment of â‚¬250 million, has been sold on to Frankfurt-based Commerz Grundbesitz Investmentgesellschaft GmbH.
Strengthening of market position in the Czech Republic
RDC has a staff of 22. It has retail projects currently in preparation extending to around 200,000 m2 in Plzen, Prague and Olomouc. The Czech Republic is enjoying good economic growth. Demand on the part of Czech retailers and European store labels for prime-site retail premises in the countryâ€™s towns and cities is considerable. In Prague, there is particularly strong demand for quality shopping centres affording ready access. In the Chodov district of the capital, RDC is working in partnership with Rodamco Europe on a centre extending to 50,000 m2, including shops, leisure facilities and parking for 2,400 cars. Phase 2 of this project will create another 20,000 m2 of shop space plus new homes and amenities. Rodamco Europe has included this centre in its investment portfolio.
Amstelland MDC and Ahold together expect to acquire a stronger market position, thanks to the combination of Aholdâ€™s market leadership in supermarkets and hypermarkets in the Czech Republic and the knowledge and experience of European retail concepts possessed by Amstelland MDC.
Presentation of strategy and half-year figures
The Management Board will today be giving a presentation of Amstelland MDCâ€™s strategy as well as the half-year figures, which were published early, on 12 August, in connection with Amstellandâ€™s acquisition of MDC. Amstelland MDC confirms its earlier profit projection, with earnings per share before amortisation of goodwill for 2002 expected to increase by around 30 per cent to EUR 0.83 and, after amortisation of goodwill, by around 17 per cent to EUR 0.74, barring unforeseen circumstances. In 2003, earnings per share for the combined group of Amstelland MDC are expected to increase by around 25 per cent before amortisation of goodwill and by around 20 per cent after amortisation, barring unforeseen circumstances.
Amstelland MDC recently sold two fully leased-up office projects in the Netherlands to investors. The Eurogate II office building of approxim