Immoeast raises EUR 3 bn for south-eastern expansion

Immoeast has raised EUR 2.8 bn from a share issue to help finance a massive investment programme in southeastern Europe, and Romania in particular. The total volume of just under 278 million shares was fully placed at EUR 10.20 each during the offer period from 2-21 May. The offer was two times over-subscribed.

The Vienna-based property developer that focuses on Eastern Europe said in early May that the capital increase was the largest in Immoeast's history and the largest placement by an Austrian company ever. The funds raised will help finance Immoeast's EUR 6 bn investment programme for 2007-2008.

Bloomberg reported that the capital increase gives Immoeast a market value of about EUR 8.6 bn. The developer, which has invested EUR 5.3 b in central and eastern Europe, is shifting its focus to Bulgaria and Romania to tap these countries’ rapid economic growth. Immoeast plans to spend EUR 6 bn on shopping malls, offices and logistic parks in southeastern Europe where demand for real estate is stronger than in Central Europe. Inflows of foreign investments in Romania and Bulgaria have increased since the two countries joined the European Union in January.

The issued shares will start trading on the Vienna Stock Exchange on 24 May, and a day later in Warsaw.

Property advisor CBRE confirmed in March that investors are set to increase spending on European commercial property after pouring a record EUR 227 billion euros into sector in 2006. Last week, UK hotel owner Vector Hospitality, Russian apartment builder PIK and Spanish developer Realia Business announced plans to raise a total of EUR 8 bn in the three largest initial public offerings by European property companies, Bloomberg said.