Carpathian Plc signs preliminary sale agreement for Warsaw Promenada Shopping Center

Carpathian Plc has signed a preliminary sale agreement for the Promenada Shopping Centre in Warsaw with MD Poland I Sp z o.o, a subsidiary of Atrium European Real Estate Ltd. The sale is likely to be completed in March 2011.

 Promenada is located in Warsaw, Poland and comprises a shopping and leisure centre of 43, 528 sqm of lettable space. Additionally, it also has 12,058 sqm of office accommodation.

 The agreed sale is at a headline figure of EUR 169.5 million, with an additional EUR 1.5million payable upon successful recovery of VAT by Atrium. The headline price is subject to adjustments estimated at the time of signing of EUR 2.5million, comprising items that will either be deducted from the price or paid by Carpathian prior to closing.   

The property was acquired by Carpathian in two parts in 2006 and 2009 for EUR 144.5 million. The 2009 year end valuation stood at EUR 157.5m.

 The properties are subject to a loan and an interest rate hedging instrument from Deutsche Pfandbriefbank AG totalling EUR 104.3 million. The loan also has a limited commitment for debt reduction attached to DPB’s separate loan against the company’s non-core asset; Babilonas in Panevezys, which would require a further payment of EUR 1.2million assuming the prior sale of Carpathian’s Blue Knight portfolio.

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 Following the sale, the net operating income earned to the company will be reduced by approximately EUR 12.0 million.

Atrium European Real Estate is focused on shopping centre investment, management and development in Central and Eastern Europe.