IGD in EUR 182m Romanian shopping spree

Immobiliare Grande Distribuzione (IGD) has acquired 100% of Romania's shopping centre owner Winmarkt Magazine from Ivington Enterprises and Broadhurst Investment, two subsidiaries of US private equity group NCH Capital Group. The transaction volume comes to more than EUR 182mln. The deal was carried out via a 90/10 joint venture with Inpartner, a real estate advisor that has long been active in Romania.

In a statement, the Bologna-based listed property group said it has signed a preliminary agreement for the purchase of Winmarkt's entire portfolio consisting of 15 Winmarkt shopping centres and a commercial building entirely let to a unnamed bank. Based on the existing leases, total income from the 147,000 m² portfolio amounts to EUR19mln, IGD said. The transaction reflects a net initial yield of 10.48%.

The Italian retail group said that the deal is in line with its expansion plans in Europe, mostly Romania and Bulgaria, recently announced in the 2008-2012 business plan. 'We have taken this first step in a country, Romania, which has one of the most compelling growth rates in the European Union of which it is an integral part as of 2007. This dynamic, which reflects the consolidated presence of important foreign investors, will obviously have an impact on current and future trends in the real estate sector', said CEO Filippo Carbonari.

The shopping centres have an average GLA (Gross Leasable Area) of 9,000 m² and are positioned in central locations in 14 large Romanian cities (Plojesti, Buzau, Cluj, Bistrata, Galati, Braila, Alexandria, Piatraneamt, Ramnicu Valcea, Slatina, Tulcea, Turda, Vaslui). IGD is also buying 100% of the asset management firm, Winmarkt Management, for EUR258,000. The company will seek to boost the value of the portfolio via EUR 23mln worth of investment. The retail property group said it expects the asset value to increase by up to 10% via active management.

The deal is forecast to result in 'important' synergies with IGD's Italian business in light of possible interest by Italian brands to expand in the Romanian market, IGD said. The company is using its own financial resources via credit lines already available to finance the acquisition, which is expected to be completed in April.

The Italian retail property group said it has also signed a preliminary agreement for the purchase of another retail asset in Carpati Sinaia for EUR 16mln. The deal is conditional on the achievement of target rent income of approximately EUR1.35mln, or a net initial yield of 8.3%.