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Degi postpones Bulgarian shopping centre deal

The German fund manager says it is reviewing its planned purchase of the Mall of Sofia shopping centre from GE Real Estate and Quinlan Private, in light of the deteriorating financial crisis. Degi says it is vital to recheck all the financial details again.

German fund manager Degi has postponed its planned acquisition of the Mall of Sofia shopping centre in Bulgaria warning it needs to “recheck” the financial aspects of the deal in light of the credit crunch.

In October it was reported that Degi, part of Aberdeen Property Investors, planned to buy the centre from Dublin-based private equity real estate firm Quinlan Private and GE Real Estate.

However a Degi spokesman told PERE the fund manager was delaying the purchase to “recheck” all the financial aspects of the acquisition, including the overall costs and future outlook for the sector and country. “There has been an impact on the local property market,” he said.

“We are in the biggest financial crisis for the past 80 years so we need to check once more our facts and our figures with this knowledge,” the spokesman added.

The spokesman said a final decision would be made about the deal once the review had concluded. Talks with Quinlan and GE are, though, expected to resume in the first quarter of 2009, according to other media reports.

The Mall of Sofia, located in Bulgaria’s capital Sofia, was built by Israeli companies Ocif and Aviv and opened in June 2006. It comprises around 70,000 square metres, including 10,000 square metres of office space and around 35,000 square metres of commercial and entertainment space.

It was bought by Quinlan and GE for $210.3 million, or $279 per square foot, in June 2006, according to sales data from Real Capital Analytics.