Dawnay Day Carpathian (DDC) has agreed to purchase a 55% interest on completion of the Galleria Patollo shopping centre development in the Latvian capital of Riga. The development partner and vendor is Titan Invest, a Danish real estate company with over seven years experience working in Latvia.

Dawnay Day Carpathian (DDC) has agreed to purchase a 55% interest on completion of the Galleria Patollo shopping centre development in the Latvian capital of Riga. The development partner and vendor is Titan Invest, a Danish real estate company with over seven years experience working in Latvia.

DDC said it will provide 'staged, conditional payments' of EUR 32 mln of equity to partially fund the project, and expects to invest a further EUR 10 mln during the project period. 'All of the investment will earn attractive priority interest accruing against the completion price. DDC's equity investment and accrued interest will be secured against the seller's substantial site value', the company said. On completion, DDC will have secured a 55% stake in the centre at an agreed initial yield of 8%, based on net operating income (NOI).

Construction of the shopping centre is to commence in June 2007, with completion scheduled for the third quarter of 2009. The scheme will provide 220 shops and restaurants over 41,000 m2 of retail space and 175 underground parking spaces.

DDC listed on the Alternative Investment Market (AIM) in London in July 2005 and raised gross proceeds of £140 mln (EUR 206 mln). The Galleria Patollo deal means the company has reached its investment target of 90% of its funds invested or committed. DCC was created by London-based finance and property group Dawnay Day in 2005 as a retail property investor focused on Central and Eastern Europe.