CEE-focused REIT Nepi Rockcastle has signed two major acquisitions worth over €500 mln in Bulgaria and Hungary.

arena plaza

Arena Plaza

In Hungary, the company has acquired the Arena Plaza shopping centre in Budapest for a price of €275 mln, or a 6.2% yield.

With a gross lettable area of 66,000 m2, Arena Plaza is the second largest retail centre in the Hungarian capital, centrally located in the eastern part of the city. It was opened in November 2007 and has since grown its annual footfall to more than 10 million people. The mall is fully let.

The transaction price represents a steep discount to the value the mall traded for shortly after opening nearly a decade ago. At the time, developer Plaza Centers received gross cash proceeds of €381 mln from UK-based Active Asset Investment Management (AAIM).

In Bulgaria, the company has just agreed to buy the owner of Paradise Center in Sofia for €253 mln, or a 7% yield. With a gross lettable area of 82,000 m2, Paradise Center is the largest retail centre in Sofia, located in the southern part of the city.

The property is believed to have been sold by a subsidiary of Russia's Bulfeld and local construction company Komfort.

Opened in 2013, the mall has an annual footfall in excess of 10 million visitors. The buyer said it is planning a number of asset management initiatives, including major improvements to the basement and the terrace level together with enhancements to the tenant mix, to further strengthen the asset's dominant market position.

The acquisitions have initially been funded by a combination of Nepi Rockcastle’s existing cash resources, debt facilities, vendor finance and the sale of various listed securities.

NEPI Rockcastle was created at the end of 2016 through the merger of CEE property firm NEPI and South African commercial property investor and developer Rockcastle. The merger created the largest listed real estate player in CEE, registered in the Isle of Man.

Earlier this year the company also bought the Serdika Center shopping centre in Sofia from S Immo for just over €207 mln.