Plaza Centers, the emerging markets property developer, reported a net loss of EUR 28.4 mln in the first half of this year mainly reflecting fair value changes of issued bonds. In the year-earlier period, the Amsterdam-listed company booked a profit of EUR 44.5 mln.
Plaza Centers, the emerging markets property developer, reported a net loss of EUR 28.4 mln in the first half of this year mainly reflecting fair value changes of issued bonds. In the year-earlier period, the Amsterdam-listed company booked a profit of EUR 44.5 mln.
Gross revenues plunged to EUR 7.7 mln from EUR 80 mln a year ago. The company pointed out that no disposals were made during the reporting period.
The company said its gearing position remains stable with minor debt comprising 58% of total equity compared to 47% at end-2008, with most debt maturing between 2011 and 2017. Its working capital rose to EUR 711 mln from EUR 698 mln at end-2008. Tel Aviv-listed Elbit Imaging has increased its stake in the company to 73.69% following the buyback of 14.5 mln shares.
In the first half, Plaza Centers acquired a 51% stake from a local developer in a new 75,000 m2 retail and office development in Sofia, Bulgaria, for EUR 7.14 mln. Together with joint venture partner MKB Bank it also bought an additional 27% stake in the Dream Island project in Budapest from CP Holdings for EUR 21.4 mln. Plaza and MKB, as a 50:50 joint venture, now hold an 87% interest in the project.
The company completed two new malls in the Czech Republic and Latvia in the first half and commenced construction on two developments in Poland with the completion of both schemes anticipated to occur in H1 2010. The company has four other projects under construction in Romania, Hungary and India.
The company also said it was in advanced discussions with potential co-investment partners to create a vehicle to acquire yielding shopping and entertainment centres in the US. Under the plan, Plaza and Elbit will together take substantial stakes in this vehicle, which - post-leverage - could target an asset base of up to $1 bn.
Commenting on the results, Ran Shtarkman, President and CEO of Plaza Centers, said he remained 'cautiously optimistic about the future prospects' of the company. 'Despite the ongoing challenging market conditions, we have continued to make good operational progress, especially on the construction of our six active development projects, as well as opening two shopping centres over the period.
'Whilst we anticipate that there may be some stabilisation in outward yield shift over the coming months, we believe that retailers will continue to be cautious in their approach until consumer confidence is fully restored. As a result of this, we will continue to position our development pipeline depending on our assessment of the most likely retail tenant requirements in each particular region. We strongly believe that our depth of experience, our specialist knowledge of the retail sector and the strength of the relationships that we maintain with both local and international retailers means that Plaza’s assets will remain the destination of choice for retailers.
'We continue to examine opportunities to acquire projects across our target regions as well as examining other future acquisitions, including operational shopping centres that are generating income and which we believe will offer the opportunity for us to enhance both their capital value and future income streams.'
