Dutch-based Plaza Centers agrees to sell shopping mall in Belgrade

The buyer, Israeli company BIG Shopping Centers Ltd, will pay 28 million euro ($29.9 million), to be followed by further payments which will be conditional on certain operational targets and milestones, Plaza Centers said in a statement on Thursday.

The final agreed value of Belgrade Plaza, which comprises some 32,300 sqm of gross leasable area (GLA), will be calculated based on a general cap rate of 8.25% as well as the sustainable net operating income (NOI) after 12 months of operation, which Plaza Centers estimates will be approximately up to 7.5 million euro annually.

Further instalments will be due to the Company during the first year of operation based on this 12-month figure. The NOI will be re-examined again after 24 months and 36 months of operation, which may lead to an upward adjustment of the final purchase price.

Belgrade Plaza, which is currently over 90% pre-let, is on schedule to open in April 2017 and Plaza Centers will remain responsible for the development and leasing of the asset until the opening.

Plaza Centers, a subsidiary of Israeli company Elbit Imaging, has a line of credit from a financing bank for the development of Belgrade Plaza to a maximum amount of 42.5 million euro. At least 75% of the net proceeds received from the disposal will be distributed to the company's bondholders by or before March 31.

On Thursday, Belgrade mayor Sinisa Mali said another Israeli real estate developer, AFI Europe, plans to invest 200 million euro in the construction of a residential and shopping complex in the Serbian capital.

($ = 0.935053 euro)