TK Development sells two Polish projects for EUR 95m

Denmark's TK Development has signed a conditional agreement with Chicago-headquartered property firm Heitman to sell two Polish assets at a total project value of EUR 95 mln.

Under the agreement Heitman will take a 70% shareholding in the completed Galeria Tarnovia shopping centre in Tarnów, as well as in a new shopping centre project in Jelenia Góra. TK Development will realise a small profit upon completion of the transaction, while being able to free up cash resources and secure additional profit from future fees relating to development, letting and construction management services.

Galeria Tarnovia is one of TK Development's major completed projects, comprising a 16,500 m² shopping centre, including a supermarket of about 2,000 m² and specialty stores of about 14,500 m². The centre opened in November 2009 and has been fully let since then. The sales price is in the region of EUR 40 mln. The current external financing in the project will be maintained, with Heitman making financing available for the company pro rata to its ownership interest.

In Jelenia Góra, TK Development has bought a plot of land and has an option for additional land for the development of a shopping centre of around 24,000 m². The project, with an expected cost of EUR 55 mln, will comprise a supermarket of about 3,500 m² and retail, restaurant and service premises of about 20,500 m². The local plan for the area is in place, and the letting of premises has started. Construction is expected to start in 2013 and the opening is scheduled for 2015.

The transaction is expected to be completed in August 2012.