Immoeast implements EUR 1.5 bn disposal plan

Immoeast said on Wednesday that it has begun implementing its EUR 1-1.5 bn sales programme in Central Europe. The first step involves the divestment of stakes in three properties in the Czech Republic and Estonia. Immoeast will sell another EUR 1 bn to EUR 1.5 bn of real estate acquired 'some time ago and for which no short-term appreciation in value is forecast.'

'For many institutional investors, especially funds, these properties are perfect investment opportunities, whilst we, in the scope of our active portfolio management, are increasingly shifting our focus towards South East Europe and the former Soviet Union,' CEO Karl Petrikovics said. Some 43% of the EUR 6 bn investment planned for the 2007/08 business year will be allotted to South East Europe; while 24% will go to Russia and Ukraine.

The largest sale is of the 60,000 m² Palladium shopping mall in the centre of Prague. Immoeast acquired a stake in the shopping and office centre in 2000 through its shareholding in the European Property Group. The property was largely pre-let to H&M, Marks & Spencers and Nike. A further stake in the Olympia shopping centre, in the Moravian city of Olomouc was also sold. The property, providing some 30,000 m² of floor space, has had vacancy rates of practically zero for years.

The company has also agreed to sell the Haabersti housing development project in Tallinn. The 800-apartment scheme has been sold to one of the largest Finnish construction and real estate development companies. Immofinanz held a 45% stake in the project company, founded in cooperation with British housing developer Grainger and a local developer.

The financial details for this deals have not been disclosed but Immoeast added that 'the proceeds from the sales are significantly above the market value determined by third-party experts'.