Trigranit has cut its EUR 8 bn development pipeline in Central and Eastern Europe by half due to the worsening financial crisis, the company's spokesperson, Tábori György, confirmed on Monday. Aside from scrapping EUR 4 bn worth of projects, investments in the remaining schemes may be postponed by up to five years, chairman Sandor Demjan told the Financial Times newspaper on Chairman Sandor Demjan told the Financial Times newspaper on Monday.
Trigranit has cut its EUR 8 bn development pipeline in Central and Eastern Europe by half due to the worsening financial crisis, the company's spokesperson, Tábori György, confirmed on Monday. Aside from scrapping EUR 4 bn worth of projects, investments in the remaining schemes may be postponed by up to five years, chairman Sandor Demjan told the Financial Times newspaper on Chairman Sandor Demjan told the Financial Times newspaper on Monday.
The cutbacks graphically illustrate the severe impact the liquidity squeeze is having the on the ambitious plans of European real estate developers, and firms in Central and Eastern Europe in particular. Trigranit's EUR 8 bn pipeline put it in third place in PropertyEU's ranking of the Top 100 developers published in February 2008. At the time Trigranit had completed projects with a total value of EUR 1.5 bn and was working on some 30 developments across 12 countries. After having successfully completed projects in Hungary, Poland, Slovakia and the Czech Republic, the company had widened its focus to include Romania, Serbia, Croatia, Slovenia, Montenegro, Bulgaria, Russia and Ukraine.
'Eighteen months ago you could finance 85% with credit; today, because of the crunch, there's been a deleveraging - it's back to 60-65% now,' chief investment officer Zsolt Szabo told the Financial Times. The projects Trigranit intends to continue developing are large mixed-use schemes, involving office, retail and hotel space, in Zagreb, Ljubliana, St Petersburg and other secondary cities in Poland and Romania.
Austrian-based Immofinanz/Immoeast, a major shareholder in Trigranit, has cut its development pipeline from EUR 4.2 bn to about EUR 2 bn, sold more assets and replaced its CEO Karl Petrikovics as the company battles to avoid a liquidity squeeze.
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.' Russian developers such as LSR and Russian Land have recently announced they are postponing some projects due to the crisis.
