Plaza Centers, the emerging markets property developer, has acquired a controlling stake in a 75,000 m[sup]2[/sup] office and retail project in Sofia, Bulgaria. Plaza is paying for the 51% stake with just under EUR 2.8 mln in cash and the assumption of EUR 4.4 mln of debt, representing 51% of the project's liability.
Plaza Centers, the emerging markets property developer, has acquired a controlling stake in a 75,000 m2 office and retail project in Sofia, Bulgaria. Plaza is paying for the 51% stake with just under EUR 2.8 mln in cash and the assumption of EUR 4.4 mln of debt, representing 51% of the project's liability.
Plaza also retains the right to acquire a further 24% stake in the project for six months following the start of construction, based on the current value of the project. A local developer will retain the remaining stake as joint venture partner in the project, with Plaza managing the construction.
The design phase of the project is already underway for the planned 75,000 m2 gross built area, inclusive of parking spaces, with zoning approval for the construction of retail and office space as well as extensive parking. The site is located at a main junction 2.7 km from the centre of Sofia. The gross development budget for the project is expected to be EUR 75 mln with construction anticipated to commence in 2010.
Commenting on the acquisition, Ran Shtarkman, president and CEO of Plaza Centers, said: 'The transaction required limited immediate funding from both partners, due to the level of bank financing provided for the land acquisition, which was achievable due to the experience and reputation of Plaza.'
The retail project in Sofia is Plaza's second in Bulgaria, following the acquisition in November 2007 of a 20,000 m2 gross lettable area shopping centre development project in Shumen.
