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Mall Veliko Turnovo seeks buyer for 31.56 million euro

Friday, Dec 12, 2008

The investment fund European Convergence Property Company PLC (ECPC) continues to search for a buyer for its only remaining asset - Mall Veliko Turnovo - after several offers for a potential transaction were withdrawn “for varying reasons…including the economic crisis,” ECPC told the media in an official statement.

“There is some remaining interest from other potential buyers and the company is considering options and strategies,” ECPC has said, as quoted by Investor.bg

Recently an appraisal was made of the mall by SHM Smith Hodgkinson, according to which the mall's market value was reduced to 31.56 million euro, from 32.55 million euro, this being the last evaluation back in January 2007.

In September 2008, Mall Veliko Turnovo celebrated two years of business. Company spokespersons have said that different promotional campaigns have succeeded in increasing the quality and variety of company tenants.

Through careful management the operating cost of the mall for 2008 was marginally lower than in 2007. This was in spite of current energy prices and the rate of inflation. This condition, however, regardless of the quality of management is unlikely to continue in the future, the ECPC said.

In July 2008, the mall's spaces were nearly 100 per cent rented out. Then one key company left the mall, but it was quickly replaced by another. Negotiations are ongoing for renting out the area of the former restaurant, comprising five per cent of the mall’s total capacity but currently vacant.

Additionally, ECPC says that the area around the mall is gradually being transformed into a major business hub which will only contribute to the business environment and the value of the mall itself.

“There is a possibility for two more malls to be constructed in Veliko Turnovo. Both of these prospective malls are planned to be built fairly near to the Mall Veliko Turnovo, which will initially increase the local competition,” said the fund in a statement from the London Stock Exchange.

Apart from increasing regional competition the effect of the global financial crisis, the rise of prices for resources and others, will possibly lead to cheaper rental prices in the overall market.

Nick Iliev

Source: PropertyWise Bulgaria