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MAS invests €95 million in Romanian mall

Acquisition forms part of a previously announced co-investment agreement with Prime Kapital.
MAS chief executive Morne Wilken says the Militari Shopping Centre is well positioned and will provide stable underlying income. Picture: Moneyweb

MAS Real Estate has entered into a sale and purchase agreement to acquire a Romanian shopping centre for €95 million.

The acquisition of the Militari Shopping Centre in Bucharest, Romania’s capital city, is in line with the group’s strategy of investing across the broader European market, it said in a Sens statement.

Militari’s net operating income stands at €1.7 million per year at a weighted average rental of €10.60 per square metre per month – it currently has 53 tenants spread across 56 416 square metres of gross lettable area.   

According to MAS, Militari benefits from an aggregate catchment of almost 300 000 people within a 45-minute drive, with a further 4 000 apartments under development in close proximity expected to lead to growth in footfall.

“The centre is well positioned and provides stable underlying income. We believe we can unlock value through active asset management and some capital expenditure to enhance income levels. As a number of current and future residential developments are completed in close proximity to the centre, we expect demand to grow, allowing for a significant extension or redevelopment of the centre to further drive growth in income,” said MAS chief executive, Morné Wilken.

The acquisition is to be completed and settled in cash within three months, provided certain pre-conditions – including approval from local authorities – are met. It is not subject to shareholder approval as it classified as a Category 2 transaction in terms of JSE Listing Requirements.

It forms part of a long-term co-investment agreement with Prime Kapital, which will manage the acquisition.

MAS’ effective economic interest in the acquisition is the equivalent of an 80% direct
participation in the performance of Militari and a 20% participation at the weighted average cost of external funding achieved by the joint venture with Prime Kapital, it said.

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