Engel Europe Ltd. (TASE: ENGR1 ENGR5) sub-subsidiary Engel East Europe NV (AIM:EEE) announced last week that it won a Belgrade municipality tender for a 76,000-sq.m. construction lot on the banks of the Danube with a bid of NIS 118 million. Engel Europe indirectly owns 63% of Engel East Europe; Engel Europe’s share of the payment is therefore NIS 60 million.
The lot is zoned for 600 housing units, office space, commercial centers, restaurants and a luxury marina. Engel Europe estimates proceeds from the completed project will be NIS 900 million, and that the company’s share will be NIS 453 million.
Sources close to the company told “Globes” that the project would cost NIS 600 million to build, and that Engel Europe’s pretax profit was estimated at NIS 125 million. Engel Europe is financing the purchase of the land from equity, and construction of the project by a loan from a European Bank.
Engel Europe is entering Serbia under its policy to expand business in Eastern Europe. The company has investments in the Czech Republic and Bulgaria, and recently announced the purchase of a lot in Warsaw, Poland, for NIS 34 million. The Warsaw lot is zoned for 300 housing units, and proceeds are estimated at NIS 230 million.. The company is also mulling entry into other Eastern European countries, and mentioned Ukraine as a possible site of future investment.
In a separate development, Engel Construction and Development Group has bought a lot in Beit Shemesh, zoned for 77 housing units, for NIS 22.7 million. Proceeds are estimated at NIS 78 million.
Published by Globes [online], Israel business news - www.globes.co.il - on February 26, 2006