AREOF to buy two shopping parks in Romania

Argo Real Estate Opportunities Fund (AREOF) plans to acquire two Era shopping parks in the Romanian cities of Oradea and Iasi. The closed-ended investment company said the properties will be purchased from funds managed by Argo Capital Management Cyprus, an associate of AREOF's investment manager.

The acquisition will be financed by the issue of 298 million shares, representing 49% of the company's share capital. Although financial details were not disclosed, the deal will involve a volume of EUR 120 mln based on AREOF's current share price of EUR 0.04 per share.

Closing is conditional on shareholders' approval.

On completion, AREOF claims it will be the largest listed retail property company operating in Romania, with a portfolio including five shopping centres encompassing 400,000 m² of gross build area. 'The board believes that AREOF may become of increased interest to institutional investors looking for exposure to the region, due to the increased company scale,' it said.

'We expect the Romanian property market to catch up with that of Western Europe, benefiting both the business and shareholder value in the long term,' added David Clark, chairman of AREOF.

The two assets generated operating profits of over EUR 5 mln last year.

AREOF is a closed-ended investment company which is incorporated in Guernsey. The company began trading on London's junior market AIM in 2006 after raising EUR 100 mln. The fund invests primarily in the commercial property markets of Central and Eastern Europe. Its primary target markets include Romania, Ukraine and Moldova.