JOHANNESBURG - Mas Real Estate, the commercial property investor, developer and operator listed on the main board of the JSE and the Euro-MTF market of the Luxembourg Stock Exchange, has agreed to acquire the Militari Shopping Centre in Bucharest in Romania for €95 million (R1.4 billion).
The company said on Monday the proposed acquisition was in line with its strategy of investing across the broader European market.
It confirmed that MAS, through a subsidiary of PKM Investments, entered into a sale and purchase agreement to acquire the entire issued share capital of MD CE Holdings and Atrium Turkey Samsun BV, two wholly owned subsidiaries of Atrium European Real Estate that owned the retail centre.
MAS said the acquisition had been undertaken in terms of the long-term co-investment agreement it had entered into with Prime Kapital.
In line with this agreement, MAS’s effective economic interest in the acquisition was the equivalent of an 80% direct participation in the performance of Militari and a 20% participation at the weighted average cost of external funding achieved by the joint venture with Prime Kapital, it said.
MAS said Prime Kapital had sourced and would manage this acquisition under the co-investment agreement.
The company added that a number of further investment opportunities were being pursued and the market would be further updated as those discussions were concluded.
Sustainable
MAS chief executive Morné Wilken said the Militari shopping centre would enhance the company’s income-generating portfolio and supported their strategic focus of delivering high-quality and growing distributions on a sustainable basis over time.
Wilken said the transaction was also testimony to their disciplined investment approach to make sustainable long-term investments.
“The centre is well positioned and provides stable underlying income. We believe we can unlock value through active asset management and some capital expenditure to enhance income levels.
“As a number of current and future residential developments are completed in close proximity to the centre, we expect demand to grow, allowing for a significant extension or redevelopment of the centre to further drive growth in income,” he said.
MAS said the purchase price of the shares reflected the fair value attributed to Militari as determined by its directors and would be settled in cash and become payable on the fulfilment of certain conditions precedent to the sale and purchase agreement.
The centre has 53 tenants spread across 56416m2 of gross lettable area, of which 53666m2 was retail and 2750m2 office space. It also has 2500 parking spaces.
MAS said Militari had an annual net operating income of 7.1m, opened in 2009 and was anchored by an Auchan hypermarket, Praktiker DIY outlet Decathlon sports goods store and various international fashion brands.
It said the tenant mix had a weighted average lease term of five years and the site was fully occupied.
MAS said the prospect of new competition was low, with nearby residential developments contributing to drive growth in footfall.
The acquisition was expected to be completed within the next three months.
MAS shares rose 2.09% to close at R23.48 on the JSE on Monday.