Meyer Bergman, the European real estate investment management firm, has teamed with the Healthcare of Ontario Pension Plan (HOOPP) to buy two shopping centres in the Czech Republic for almost €300 million.
London-based Meyer Bergman and the Canadian plan have bought the Forum Nova Karolina in Ostrava and the Forum Usti nad Labem, located in its namesake city north of Prague, from Multi Corporation, they said.
Adding the Czech Republic was one of Europe’s “most resilient economies”, they explained the deal had been structured as a 50:50 joint venture between Meyer Bergman’s European Retail Partners I fund (MBERP) and HOOP, which is also an investor in MBERP.
Nova Karolina is a 58,000 square metre regional shopping centre in Ostrava scheduled to open in March 2012. It is located in the heart of Ostrava, which is the Czech Republic’s third largest city with a catchment area of over 1.2 million people. It is more than 85 percent pre-let to international tenants such as Albert, H&M, and C&A. Debt financing was secured through a consortium led by Ceska Sporitelna.
Forum Usti is a smaller centre at 27,000 square metres, and opened in November 2009 in the heart of the city on the town’s main square. It is the main shopping destination in a region which has a catchment of 500,000 people. Financing for that centre was supplied by Unicredit.
Both shopping centres will continue to be managed by Multi.
The new investors highlighted Czech GDP as a major factor behind the deal, saying it was estimated to grow by 2.5 percent this year and 3.4 percent next year. Retail rents have remained stable over the last two years.
They also said recent evidence suggested that a number of major international retailers were looking to expand their presence in the region, particularly in well-located, prime shopping centres.
Markus Meijer, chief executive and founder of Meyer Bergman, said: “We believe in the strength of the Czech economy and its retail environment and are confident that that these prime shopping centres are well placed to deliver strong value creation for our investors.”
John Crocker, president and chief executive of The Healthcare of Ontario Pension Plan, said it was HOOPP’s first real estate investment in the Czech Republic. “Real estate investments closely match the needs of our members, since the investment provides a steady stream of income. It’s also an excellent hedge against inflation,” he added.
HOOPP has more than $5 billion of real estate investments.