Plaza Centers seeks opportunities beyond traditional borders

Retail specialist Plaza Centres is is looking beyond its traditional development business model and markets by seeking to acquire high-yielding mature assets in new regions, such as the US, the company said on Tuesday in an interim statement. Commenting on the plans, Ran Shtarkman, President and CEO of Plaza Centers, said 'exceptional opportunities' may arise in these markets to enhance capital and income. He added that the company is also examining development opportunities across new territories in CEE and India.

'We continue to monitor closely market conditions in our countries of operation. Although there has been a slight easing in debt market conditions, the repercussions of the global recession are still very strong and will continue to have an impact on current and potential tenants for some time. Plaza is able to mitigate this by ensuring it maintains its strong, lasting relationships with its high quality tenant base, across the company's geographically diverse portfolio of western style, well located centres.

In the first three months of the year, Plaza Centers opened two shopping and entertainment centres. Riga Plaza, in which Plaza owns a 50% stake, was opened on 31 March and comprises approximately 49,000 m² of gross lettable area in Riga, Latvia. The centre represents Plaza's first development in the Baltic States and its second largest completed project, following Arena Plaza in Budapest which was opened in November 2007.

Earlier in the month, the company opened Liberec Plaza shopping and entertainment centre in the Czech Republic, which comprises approximately 17,000 m² of GLA.

During the three-month period, Plaza Centers also acquired a 51% stake (with an option to increase this up to 75%) from a local developer in a new 75,000 m² gross built area development of retail and office space in Sofia, Bulgaria, for a total sum of EUR 7.14 mln, incorporating EUR 2.78 mln in cash and the rest by debt assumption .

In March 2009, Plaza and Hungarian bank MKB purchased an additional 27% interest in the Dream Island scheme from CP Holding, a company controlled by Sir Bernard Schreier, for EUR 21.4 mln, incorporating a cash payment of EUR 12 mln and the rest by assumption of debt. Plaza and MKB, as a 50:50 joint venture, now hold an 87% interest in the project.

Plaza ALSO commenced the construction of two developments in Suwalki and Zgorzelec, in Poland with completion of both schemes slated for 2010. The developments will comprise 20,000 m² and 13,000 m² of GLA respectively. In addition, the company is working on the development of four further projects (Casa Radio and Miercurea Ciuc in Romania, Dream Island in Hungary and Koregaon Park in Pune, India). The remainder of Plaza's development pipeline projects are either in the design phase or awaiting permitting procedures. Commencement of these projects will depend, amongst other things, on the availability of external financing, the company said.

Plaza Centers is a leading emerging markets developer of shopping and entertainment centres, focusing on constructing new centres and, where there is significant redevelopment potential, redeveloping existing centres, in both capital cities and important regional centres. The company is an indirect subsidiary of Elbit Imaging, an Israeli public company whose shares are traded on both the Tel Aviv Stock Exchange in Israel and the NASDAQ Global Market in the US.