» Update on Investments

Update on Investments

Posted on: 25 April 2013


As mentioned at the release of the 2012 annual results and in the prospects section of the Directors’ report forming part of the 2012 Annual Report, NEPI continues to explore and pursue further acquisition and development opportunities in Romania and the broader Central Eastern Europe (“CEE”) region.

The purpose of this announcement is to advise shareholders of progress made in relation to further investment opportunities, which is also the subject of a presentation to shareholders on 25 April 2013 in Johannesburg. The presentation is available on the Company’s website (www.nepinvest.com).

Potential Acquisition of Aupark Shopping Centre, Zilina, Slovakia

NEPI has submitted a non-binding offer letter to HB Reavis (“HBR”) to acquire HBR’s 100% interest in the Aupark Shopping Centre (“Aupark”) in Zilina, Slovakia (“the potential Aupark acquisition”). HBR accepted NEPI’s offer which is subject to contract, due diligence and various approvals, including the approval of the financing bank. Closing of the potential Aupark acquisition is expected by end of July 2013.

Slovakia, a European Union (“EU”) member, has a population of approximately 5.4 million residents with the second highest purchasing power per capita in the CEE region. Aupark is located in the historic centre of Zilina, the third largest city in the country, with a population of approximately 85,000 residents. Zilina is an important industrial centre and the seat of the region with a population of approximately 700,000 residents. The city is located around 200 kilometres from the capital Bratislava, close to the Czech and Polish borders.

The catchment area of Aupark within a 30 minute drive is estimated at 380,000 residents. Aupark has approximately 21,000 square metres of gross lettable area (“GLA”).

Major tenants include international brands such as Billa, C&A, Deichmann, H&M and New Yorker.

Proposed Development in Targu Jiu, Romania

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.

Targu Jiu is the capital of Gorj county in Romania and it is the county’s largest city with a population of approximately 78,000 residents and a further 20,000 residents in the surrounding smaller towns (15 minutes’ drive). Recent data suggests that Gorj county has one of the highest per capita income levels in the country. Employment levels and purchasing power is therefore relatively high. A series of large industrial developments are anticipated to occur in the area, which could spur further economic growth. There are no major retail centres in Targu Jiu.

NEPI has secured the land with the intention of developing a shopping centre with strong international anchor tenants (“the proposed Targu Jiu development”), subject to obtaining authorisations and approvals.

The site for the proposed Targu Jiu development is located in the most densely populated area of the city, near the existing Kaufland supermarket within a 30 minutes’ drive catchment area of approximately 150,000 residents.

Potential Acquisition and Proposed Redevelopment of Severin Shopping Center, Drobeta Turnu Severin, Romania

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, Romania (“the potential Severin acquisition”). Belrom accepted NEPI’s offer which is subject to contract, due diligence and various approvals.

Severin Shopping Center is located in Drobeta Turnu Severin, a port city on the Danube River, capital of Mehedinti county and its largest city with a population of approximately 86,000 residents. The city is located at the Romanian-Serbian border, 250 kilometres from Belgrade.

The catchment area of Severin Shopping Center within a 45 minute drive is estimated at 175,000 residents. The retail scheme has approximately 16,000 square metres GLA. NEPI intends to extend the centre, subject to obtaining proper authorizations and approvals, introducing additional international brands in order to exploit the centres potential for the centre to become regionally dominant.

Acquisition of a Portion of Debt in relation to a major shopping centre in Sibiu, Romania

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.

Sibiu is the capital of Sibiu county and its largest city with a population of approximately 137,000 residents. The catchment area of shopping centre within a 45 minute drive is estimated at 260,000 residents.

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 recapitalise 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 Sibiu debt acquisition is not categorisable in terms of the Listings Requirements of the JSE Limited. As and when appropriate, further announcements will be made in this regard.

Kaufland Value Extensions in Sighisoara and Vaslui, Romania

Further to the previously announced acquisitions in Alexandria and Sfantu Gheorghe, NEPI has, through one of its wholly owned subsidiaries, secured land plots adjacent to existing Kaufland supermarkets (“the Kaufland transactions”), with the purpose of developing big box strip malls ranging between 2,300 and 2,800 square metres of GLA. 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 authorisations and approvals.

The Kaufland transactions are not categorisable in terms of the Listings Requirements of the JSE Limited. As and when appropriate, further announcements will be made in this regard.

Other Opportunities

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.

This announcement is for information purposes only. To the extent required, announcements in compliance with the Listings Requirements of the JSE Limited, the rules of AIM and the rules of the Bucharest Stock Exchange will be made in due course.