Netherlands-based Echo Polska Properties (EPP) has, through its subsidiary EPP Development 7, acquired the King Cross Marcelin shopping centre, in Poznan, Poland, for €91.1-million.
The acquisition is in line with the company’s strategy to expand its presence in Polish regional cities.
The 45 353 m2 shopping centre, the real estate investment company said, presents a unique opportunity to acquire a shopping centre, dominant in its catchment area, at a price with material discount compared with other regional markets.
The initial yield of the acquisition is 7.3%, compared with the current sub-7% yield in other regional cities.
"As Poznan is one of Poland's strongest regional markets, we are excited to find an asset that has strong key performance indicators (KPIs), adds to the scale of EPP and provides long-term growth potential with its asset management opportunities," said EPP CEO Hadley Dean.
He further added that the company is confident that the acquisition will strengthen its portfolio of properties in Poland's most lucrative markets, and that it will deliver value to all of EPP’s shareholders.
The acquisition will be funded through a combination of debt, existing cash resources and the balance by way of an equity capital raise of about €45-million, which will be effected through a bookbuild process.
Redefine Properties has committed to participate to the full value of capital to be raised pursuant to the bookbuild process at a price of not less than €1.235 a share without Redefine receiving any pre-commitment or other fees in consideration for its participation.
"While we had been looking at this asset for some time, we had not anticipated raising equity. However, given our share price, we believe this acquisition now makes economic sense and will further solidify our position as the leading retail landlord in Poland," Dean said.
The transaction is expected to close in July.
Meanwhile, EPP shareholders earlier this month approved the company’s proposed name change from Echo Polska Properties NV to EPP NV.
The name change has been registered by the trade register of the Dutch Chamber of Commerce, and accordingly, the name change will now be implemented.