TK Development puts Prague retail outlet up for sale

Danish listed property company TK Development and UK-based LMS Outlets have put their Fashion Arena Outlet Center near Prague on the market. Fashion Arena is the only outlet centre in the Prague area and the largest retail asset on sale in Prague at the moment.

The vendors have mandated UK property adviser and outlet specialist GVA to find a buyer for the 109-unit outlet scheme. The guide price of EUR 75.6 mln represents a premium to the development costs.

Fashion Arena comprises a lettable area of 25,125 m2, generating a projected total rental income for the 2012 calendar year of about EUR 6.22 mln.

The asset offers a net initial yield on the guide price of 8% within 12 months with potential for a further increase from the growing tourist visitor numbers. The site is located 25 minutes east of central Prague and hosts a range of international brands including Nike, Adidas, Tommy Hilfiger, Gant, Levi's, Next and Mango.

Rob Bould of GVA said he hoped to have a shortlist of three to four 'runners and riders' with the capacity and experience to buy the asset by early April, with completion of the deal by mid-June. He noted that the asset was 'pretty unique' in the Prague market and would likely attract the attention of a range of international investors, including opportunity funds, institutional investors who hold assets for the long term and established outlet centre operators. Domestic investors have also shown interest.

The centre opened in November 2007, with a second phase completed in October 2010. The addition has been leased up, Bould said.

TK Development developed the centre and owns the majority stake. LMS holds a passive minority interest in Fashion Arena Outlet Center.

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