Source: eKapija | Thursday, 11.02.2016.| 13:02
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Sale of shopping centers triggers investment cycle - Delta Holding to invest EUR 250 million in Delta Planet, InterContinental Hotel and new business building in Belgrade

Delta Holding has sold its Delta City shopping centers in Belgrade and Podgorica to the South African investment fund Hyprop and then announced the proceeds of that sale will be invested in further development of operations in the area of real estate, agriculture and distribution.

A total value of this acquisition is EUR 202.8 million. With this transaction, Delta's revenue from the sale of companies has reached EUR 1.8 billion. As announced by Delta Holding, the company is ready to invest EUR 250 million in new projects as soon as building permits are obtained.

The new projects in question are, actually, previously announced investments, such as the construction of Delta Planet Shopping Center at Autokomanda, InterContinental Hotel and the new business building in Belgrade. The sale of shopping malls should, therefore, trigger a new investment cycle of one of the largest domestic companies and, thus, provide a strong stimulus to Serbia's economy sector.

Delta has also announced it is going to pay all taxes in Serbia on the sale of shopping malls, remining they have paid EUR 2 million in taxes and contributions to the budget of Serbia over the past ten years.

The news about the sale of Delta City shopping centers is important for the retail market in Serbia as well, where main players are currently foreigners.

Investors from South Africa in the Balkans

South Africa's Hyprop is one more in a series of investors from that country doing acquisitions in the Balkans. As announced on the company's website, Hyprop Investments has acquired a 60-percent stake in Delta's shopping malls, while the rest is bought by the Homestead Group, a company associated with Louis Norval, one of the managers at Hyprop.

The South African company took over the retail empire of the local company MPS Properties shortly before acquiring Delta. December 2015 saw Atterbury Group buy a 30-percent stake in MPC, and the two companies then established a joint Balkan real estate development fund.

Aside from Serbia, investors from South Africa are interested in neighboring countries too, and Tower Property Fund has already announced the takeover of four Konsum facilities in Croatia, valued at EUR 66.4 million.

According to the web portal Seebiz, Delta Holding sold its shopping malls in Belgrade and Podgorica at nearly EUR 70 million higher price than their construction cost. Considering that Serbia still lags behind developed markets when it comes to retail space per capita, and given that tenants express great interest, a conclusion is that it pays off to invest in shopping centers. The number of foreign investors in Serbia is on a rise, and they're mainly coming from South Africa, Israel, Austria, Great Britain...

Development of Delta City shopping centers

Delta City in Belgrade opened in 2007, thus becoming the first modern shopping mall in Belgrade. This complex includes 29,876 square meters of retail space for rent and is situated in Jurija Gagarina Street in New Belgrade. From its opening until today, Delta City Belgrade has attracted numerous renowned tenants, such as H&M, Zara and Cineplexx.

Podgorica-based Delta City has 23,608 square meters of retail space and features 80 outlets. The primary target group of this shopping center is a population of over 210,000. An attractive mix of domestic and foreign tenants of this complex includes world-renowned brands like Zara, Guess, Bata, Tommy Hilfiger, Gant and Orsay. Delta City Podgorica opened 2008 as the first and only shopping mall in Montenegro.

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