Plaza Centers, the emerging markets shopping centre developer, said it could freeze up to 26 of its 32 projects, or over 81% of its development pipeline, in light of the ‘extraordinary market conditions.’ In a management statement for the three months ended September 30, Plaza Centers said that it has taken the strategic decision to ‘scale back on projects starts and acquisitions.’
Plaza Centers, the emerging markets shopping centre developer, said it could freeze up to 26 of its 32 projects, or over 81% of its development pipeline, in light of the ‘extraordinary market conditions.’ In a management statement for the three months ended September 30, Plaza Centers said that it has taken the strategic decision to ‘scale back on projects starts and acquisitions.’
The company said that the last few months have seen extraordinary turbulence in economic and financial markets worldwide, which has impacted considerably on real estate investment transactions. As a result, the company has decided to go ahead with six projects that are already at the construction stage but that the start of construction for the other 26 projects that are either in the design phase, or waiting for permission, will depend on availability of external financing.
Plaza has a development portfolio consisting of 32 projects, of which seven are located in Romania, six in Poland, six in India, four in the Czech Republic, three in Hungary, three in Serbia, one in Bulgaria, one in Latvia and one in Greece.
Ran Shtarkman, President and CEO of Plaza Centers, said: ‘We are mindful of the impact of these extraordinary markets on investor demand in the regions in which we operate. We are therefore taking a cautious view on the projects on which we have not yet started construction and will keep the timing of the commencement of these under regular scrutiny in order to identify the optimal time to deliver these projects into a recovering market.’ This does not mean that Plaza will have to execute forced sales of projects, he added.
In the third quarter ending September 30, the company said it sold Plzen Plaza to Klépierre for a total of EUR 61.4 mln. The mall, which was 100% let on opening in December 2007, was marketed by Jones Lang LaSalle. The company has invested a total of EUR 190 mln so far this year in the acquisition of four new projects, the ongoing development of existing assets, the purchase of an additional 50% stake in Koregaon Park and the formation of an Indian joint venture with Elbit Imaging. It added that its level of gearing is 40%.
The company also announced it has initiated a share buyback programme, under which it has bought back a total of six million shares at an average price of 46.6 pence.
