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euro adhoc: Meinl European Land Limited
Increase in the Company¬ís history propels Meinl European Land alongside the
largest European real estate companies EUR 1,48 billion for new real estate
development projects Urba
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Jersey, 22 January 2007. Meinl European Land looks back at a very successful year 2006 and starts 2007 with another burst of growth. Since year end 2006 real estate projects with a total investment volume of approx. EUR 900 million have been contractually agreed. Further projects totalling EUR 1 billion are expected to be signed in the very near future.
Capital increase will generate EUR 1.48 billion for new acquired projects To fund its extensive investment program, Meinl European Land is intiating a capital increase: Between 22 January and 9 February 2007, Austrian and international investors are being given the opportunity to acquire 75 million new shares at a subscription price of EUR 19.70 per share. This 1 for 5 rights issue is the largest capital increase in the Company¬ís history. Trading of subscription rights will take place on 1, 2 and 5 February 2007. At current market price, this will bring Meinl European Land¬ís market capitalisation to almost EUR 6 billion. Through the share issue the Company will have become one of Europe¬ís largest real estate companies in terms of market capitalization. The capital increase, which will generate gross proceeds of EUR 1.48 billion, in line with Meinl European Land¬ís principles to secure financing for new projects very close to the outset, while never holding more liquidity than needed for specific, planned projects.
Portfolio expanded to EUR 4.5 billion - steadily increasing deal flow Following the latest acquisitions Meinl European Land¬ís property portfolio has risen to EUR 4.5 billion as of today. This consists of 153 completed properties with a total value in excess of EUR 1.4 billion and 36 contracted development projects with a total investment value of EUR 3.1 billion scheduled for completion between 2007 and 2009. Annual rental income for the total portfolio is estimated at EUR 450-500 billion once all development projects are completed, corresponding to a yield of approx. 11%.
The addition of some EUR 1 billion worth of further projects - currently at an advanced stage of the due diligence process and planned to be signed very soon - will swell the real estate portfolio to EUR 5.5 billion.
First projects signed in Bulgaria and Ukraine Meinl European Land has recently begun work on its first development project in Bulgaria. The EUR 185 million project is a 80,000 sqm shopping centre on an 18 hectare site on the southern edge of Sofia with a direct link to the southbound freeway. Completion is scheduled for year end 2009.
The Company has also acquired its first project in Ukraine: a 60,000 sqm shopping centre will be built in Odessa, a city of over a million inhabitants, at a total cost of around EUR 150 million. The forecasted yield for the shopping centre, scheduled for completion by the end of 2008, is slightly over 12%.
Second shopping centre in Rostov-on-Don In the southern Russian city of Rostov-on-Don Meinl European Land has just recently signed agreements for its second shopping centre. The 60,000 sqm shopping centre will be built slightly outside the city centre. Investment costs are estimated at approx. EUR 80 million. Expected anchor tenants are the German Metro Group with a Real hypermarket and OBI with a DIY centre. The shopping centre is scheduled to open in 2009 with an estimated yield of 15%. The strategy to secure a market position in a specific region on a long term basis by developing two complementary shopping centres in the same city has been successfully adopted in other cities already.
60,000 sqm shopping centre in Ryazan yielding 16% In Russia, the Company is constructing a further shopping centre in Ryazan, a city of 500,000 people in the Moscow region. The development costs for this project are forecasted at approx. EUR 70 million with a rental yield of 16%. The centre is scheduled to open in 2009.
Huge shopping centre near Moscow In Pushkino, a northern suburb of Moscow, Meinl European Land will develop a huge shopping centre including a retail park. The multi-phase project will ultimately comprise a total lettable area of up to 250,000 sqm. Preliminary agreements were signed a few days ago. The total cost of the project - which has similarities with Europe¬ís largest shopping centre, SCS in Vienna, both in terms of scale and structure - will amount to around EUR 300 million. The yield is estimated at 15%. Metro Group, with whom Meinl European Land has close ties particularly in Russia, is again expected to be the anchor tenant.
Continued growth in Poland ¬ó shopping centres in Kalisz and Gdansk Expansion is also the order of the day in Poland: Meinl European Land is developing a shopping centre on a land plot of 11 hectare in Kalisz. The city lies 250 km west of Warsaw and has a catchment area of 450,000 people. The shopping centre will be one of the largest in the region with a total investment cost of EUR 45 million. Anchor tenant will be the British retailer Tesco.
At the end of 2006 Meinl European Land acquired a shopping centre project in Gdansk, near the former Lenin shipyard, which became famous during the strikes of the 1980s. The total investment for the 50,000 sqm shopping centre scheduled to open towards the end of 2009 amounts to roughly EUR 100 million.
Urban redevelopment projects being assessed In the medium term, the Gdansk development project is not confined to the mentioned shopping centre alone. The city of Gdansk is planning to breathe new life into this once thriving district. In addition to the shopping centre, plans call for construction and refurbishment of hotel, office and residential buildings together with various leisure facilities, so as to create an attractive new city centre for business and leisure activities.
Revitalising an entire district is extremely appealing, but also challenging. It calls for extensive know-how and a many years of experience in real estate development projects. On the other hand, such projects offer developers opportunities for extremely attractive yields.
Meinl European Land is currently engaged in negotiations with representatives of two major Russian cities on similar urban development projects. Apart from a major shopping centre, such urban development projects may also include office and residential buildings as well as hotels. The yield for such projects with an investment value of up to EUR 700 million per project is estimated at over 20%. Developing such a large area may well take 4 - 6 years. After an assessment and preparation of an appropriate concept, first urban developments could begin within a relatively short period of time.
Focus will remain on retail properties Such urban redevelopments enables Meinl European Land to secure prime locations for shopping centres. Furthermore, it is an excellent chance to increase its earnings significantly. Meinl European Land¬ís long-term investment focus will continue to be on retail properties, however. Although involvement in urban development projects is highly likely to form part of the Company¬ís future activities, in the long term Meinl European Land intends to retain in its portfolio only the retail properties within such projects. Any residential, office and hotel properties will be disposed of.
A further EUR 1.9 billion in the project pipeline The large number of contracted new projects mentioned above does not by any means signal the end of Meinl European Land¬ís expansion drive. Within its pipeline the Company currently is reviewing specific projects with a total investment value of approx. EUR 1.9 billion. Hence, Meinl European Land¬ís continuing growth is assured.
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ots Originaltext: Meinl European Land Limited
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