Nepi Rockcastle, which owns premier shopping centres in Central and Eastern Europe (CEE), is to acquire Silesia City Centre, a shopping centre located in Katowice in southern Poland, for €405m.
The group said on Friday that its NE Property business had signed a binding agreement to acquire all the issued shares of the centre’s owner, Helios, from Allianz Finance VII Luxembourg, Kamsa Luxco 2 and Cura Beteiligungsgesellschaft International.
The purchase will be funded from Nepi’s existing cash resources, primarily derived from the equity raise completed in October.
Nepi Rockcastle has concurrently signed a binding agreement to acquire all issued shares of Elco Energy and Elco ICT from ECE Projektmanagement Polska for €1.5m. These companies provide communication infrastructure and energy services for the tenants at the property, it said in a statement on Friday.
In September and October, the company completed a €300m equity raise, a €500m green bond issue, the largest single asset acquisition of a retail property in CEE in recent years and disposal of its last remaining property in Serbia.
The Silesia City Centre acquisition comes just a few months after it purchased Magnolia Park in Wroclaw in southwest Poland for €353m.
“The acquisition further advances Nepi Rockcastle’s investment strategy to strengthen its portfolio by focusing on countries with an investment-grade rating and prioritising core, income-producing dominant properties,” it said.
Silesia City Centre consists of 88,400m2 of gross lettable area. Katowice is one of the strongest cities in Poland economically. Its average spending power exceeds the national average per capita by 35%.
The Katowice conurbation, consisting of 22 adjacent population centres, was one of Europe’s most industrialised and urbanised areas. While heavy industry continued to be a significant pillar of the region’s economy, Katowice had evolved into a dynamic business services hub, with a presence in professional outsourcing, innovation-driven research and advanced technology, Nepi said.
The property is well located in the city, with an immediate catchment area of more than 280,000 people within 15 minutes’ drive and a regional catchment of almost 2.2-million people within a 45-minute drive.
The shopping centre has an occupancy rate of 98.4% as of November, including anchor tenants such as Cinema City, Half Price, H&M, Kaufland, Media Markt, Primark, Reserved, TK Maxx and Zara.
The property not only exhibited a strong operational performance but also benefited from a dominant position in the region, Nepi said.
“This high-quality shopping centre has a commanding market position in Katowice, one of Poland’s largest and wealthiest cities, and we look forward bringing our asset management expertise to bear in the execution of long-term value growth initiatives in this latest investment,” said CEO Rüdiger Dany.
Nepi has projected a net operating income of €30.3m for Helios for the year to end-December, while the net operating income expected after the integration of the property into the Nepi group and implementing asset management initiatives is expected to stabilise at €32m.
The Elco companies were expected to generate an additional €300,000 from communication infrastructure and energy services provided to the tenants at the property, Nepi said.
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