“NEPI has secured, via one of its wholly-owned subsidiaries, a series of adjoining land plots with a total area of approximately 4 hectares in Targu Jiu, Romania. A series of large industrial developments are anticipated to occur in the area, which could spur further economic growth. There are no major retail centers in Targu Jiu,” NEPI said in a statement submitted Thursday to the Bucharest Stock Exchange.
NEPI said it secured the land with the intention of developing a shopping center with strong international tenants. The development is subject to obtaining authorizations and approvals.
“NEPI has submitted a non-binding offer letter to Belrom Zece SRL (“Belrom”) to acquire the Severin Shopping Center and an adjoining land plot of approximately 2.3 hectares in Drobeta Turnu Severin. Belrom accepted NEPI’s offer which is subject to contract, due diligence and various approvals,” NEPI also said.
The shopping center has approximately 16,000 square meters and NEPI plans to extend it.
“NEPI has agreed to acquire the rights under the debt financing agreements for a portion of the distressed debt in relation to a major shopping centre in Sibiu, Romania (“the Sibiu debt acquisition”). The Sibiu debt acquisition is subject to contract, due diligence and various approvals. Following completion of the Sibiu debt acquisition NEPI intends entering into negotiations with the other providers of bank finance and the owners in order to recapitalize and restructure the property holding companies, so that the debt levels are reduced to sustainable levels and so that expertise and resources are available to perform refurbishments and reconfigurations of the centre to enhance its dominance as a regional shopping and entertainment centre,” the statement also reads.
NEPI also said it secured land plots adjacent to existing Kaufland supermarkets with the purpose of developing big box strip malls ranging between 2,300 and 2,800 square meters. The land plots are located in the cities of Sighisoara and Vaslui where competition is low or non -existent and the proposed developments are subject to obtaining authorizations and approvals.
“NEPI continues to explore a number of other investment and development opportunities in Romania and in other countries in the region. These include the acquisition of land for development in Timisoara and the acquisition of a shopping centre with expansion potential in Romania, as well as the acquisition of an interest in a Mall in Budapest, Hungary. As and when appropriate, further announcements will be made in this regard,” according to the statement.
NEPI recently said it will expand to Serbia, Hungary, Slovenia, and Bulgaria, but Romania remains its primary market in the region and investments here are planned to hit EUR500 million by 2016. Since its foundation in 2007, the fund has invested almost exclusively in real estate projects in Romania, where its current assets are valued at over EUR600 million. NEPI also has a small portfolio of real estate, office space and retail assets in Germany.
In 2012, the fund reported a 25% increase in its rental income to over EUR40 million. Net profit soared 76% to EUR33.1 million.
NEPI is the first property fund listed on the Bucharest Stock Exchange, on a dedicated segment for real estate investment trusts (REITs). The fund is also listed in Johannesburg and London.