Monthly Archives: September 2011

Worth noting…

A few things caught our eye recently:

Viktor Orban (you know, Hungarian PM) has been humming the anti-bank tune recently, saying he’ll put an end to the “era of bankers”. This apparently involves banning forced evictions, and forcing banks to accept discounted repayments of foreign denominated mortgage loans. Sounds like after-the-fact regulation….“He said that while the affected banks had initially condemned the government’s announcement, they were likely to reconsider their position. He added that similar measures were expected to be introduced in several European countries.”  Realdeal.hu   

Of course, just when you thought it was safe to do some Orban-ranting, the EU comes up with a new Bank Tax proposal. The banks say it will kill the recovery because they’ll have to pass those costs on to the consumer.

For the sake of argument, why do they have to? Shouldn’t the question be whether or not they should?  Continue reading

Multi Corp sell two Czech malls

Multi Corporation has sold a pair of Czech shopping malls — Forum Usti nad Labem and Nova Karolina – for nearly €300m. The buyer was a joint venture between the RE investment manager Meyer Bergman (whose name started popping up in these parts a couple months ago) and one of its investors.

Forum Usti nad Labem is a 27,000 sqm center that opened in 2009, while the 58,000 sqm mall Nova Karolina is still being built in Ostrava. Completion is expected in March 2012. Salans along with Cushman & Wakefield acted for Meyer Bergman in the transaction. Interestingly, Multi’s sale of Forum Liberec in August was announced just last week, so this puts that deal into a bit clearer perspective.

Inditex takes Sibiu high street space

Zara will be opening a high-street store in the center of the Romanian town of Sibiu. The four-level outlet (a basement level, ground and 2 upper floors) spreads over 1,500 sqm in a building owned by a subsidiary of BCR. Reconstruction work will be required on the building.
“We strongly believe that other fashion retailers will target this kind of locations in the  medium and long-term, not only in Sibiu, but also in Bucharest as well as in other cities with potential for high street modern retail,” said Razvan Sin, head of retail for DTZ Echinox. DTZ Echninox mediated the lease.

Palac Flora goes to Atrium

The sale of Palac Flora has finally gone through, with Atrium European Real Estate agreeing to pay €191m for the property, which sits on top of the Flora metro station in Prague. The 37,600 sqm property (20,000 sqm of which is retail, the rest offices)  was sold by AFI Europe and Avestus. It’s interesting to note how the geography of debt is becoming an issue in these days of currency nervousness:

As a result of the acquisition the value of Atrium’s income producing portfolio increases to ca. €2.0 billion, of which 75% by value is situated in ‘A-‘ or above rated countries. Further, the Czech Republic, the highest rated country in Atrium’s markets, at A+ /Positive, now accounts for around 23% of the Company’s total portfolio by value; meaning it becomes Atrium’s second largest market after Poland at 46% (A- Stable). In addition, Atrium’s exposure to the Czech Republic’s largest two cities, Prague and Brno, has increased to 68% of the Czech portfolio.

Tesco 100% owner of Forum Liberec

One of the newsy bits at CEDEM this year was confirmation that Tesco has taken over the 50% share of Forum Liberec it didn’t yet own. The retailer signed a contract to that effect back in August with co-developer Multi Development, who one suspects has other projects to sink its equity into. Details of the deal haven’t been forthcoming yet, so we can’t tell you just how much it managed to pull out of the project. At CEDEM, Tesco’s Acquisition & Development Director CR/SR David Nekovar mentioned he was planning a dozen new hypermarkets. Keeping busy, we see.

CEDEM concludes on cautionary note

CEDEM CEE wrapped up early this afternoon, and it was interesting to see the difference of moods. For whatever reasons, when speaking about the specific markets yesterday, the mood was slightly upbeat, with practical solutions and strategies being put forward. Today, the mood was less optimistic, reflecting a realization that we’re not about to move out of this period of stress and volatility any time soon. Nor is credit for new developments likely to get any easier to come by. Right at the end, there were real concerns raised that we could be entering rather dangerous waters, and that the best strategy for some looks to be just to sit tight, spend no money. Back in the office, checking out the world’s stock markets, it’s not hard to figure out where that sentiment is coming from. It’s tough all over. What this will mean for CEE’s property markets in the short-term is really anyone’s guess.

Volksbank issues profit warning

Volksbank is warning that profits are going to be hard to come by for the next year, so shareholders shouldn’t hold their breath for dividends.

The management board of Österreichische Volksbanken AG (VBAG) announces that due to the increasingly difficult economic environment a payment on profit-related instruments (shares, participation capital, hybrid capital and supplementary capital) in 2012 for the 2011 business year is unlikely from today´s viewpoint. According to a current forecast the main reasons for the profit warning are an increasingly difficult economic environment which negatively affected the valuation of participations (VB Romania), the sale of participations as well as an earnings forecast impacted by potential additional financial burdens (e.g. measures by the Hungarian government with respect to foreign currency loans).

We won’t really go into those rumors swirling about about the state getting in the mood for some nationalization. But things do appear to happening quite rapidly now. Take the press release earlier this month? “Owners of VBI and Sberbank Signed Acquisition Agreement in Vienna”

Continue reading