Israeli income-producing real estate group Big Shopping Centers (2004) Ltd. (TASE:BIG) is expanding its operations in Belgrade. The group, managed by Hay Galis, has signed an agreement to acquire a shopping center in Belgrade, Serbia at a price that could reach €32.5 million (NIS 125 million), minus a €14.5 bank loan that the shopping center took, which will remain after the acquisition. BIG is making the acquisition through a subsidiary in which it has a 78.5% holding.
BIG reported today that the commercial center had 23,000 square meters in rental space, including a 2,313-square meter new building "in the advanced construction stages scheduled to open to the general public before the deal is completed."
BIG says that the price for the deal includes €4 million to be paid to the sellers, subject to completion of occupancy for the new building. If the new building is not ready for occupancy within a year of the date on which the deal is completed, this amount will not be paid to the sellers. The occupancy rate in the shopping center is 100%.
As of now, there is no certainty that the deal will go through. In any case, BIG says that after occupancy of the new building is completed at the end of construction, annual net operating income (NOI) from the acquired shopping center will be €2.7 million.
BIG Shopping Centers, controlled by Yehuda and Rony Naftali, has a NIS 4.6 billion market cap. The company operates open-air commercial centers in Israel, the US, and Serbia. As of the end of the second quarter, the company held 56 commercial centers with 1.16 million square meters in total rental space. As of June 2019, the company held 97,000 square meters of rental space in Serbia, which generated €4.9 million in NOI in the first half of 2019.
In a presentation published by BIG Shopping Centers when its second quarter reports were issued, the company stated that it was in the process of building a 15,000-square meter commercial campus in Belgrade in which the main tenant was slated to be French sporting goods chain Decathlon. BIG added that this complex was scheduled to open by the end of 2019, and to generate €2 million in NOI when fully occupied.
BIG said that it was on a growth and expansion path "that would persist in the short and medium term."
Published by Globes, Israel business news - en.globes.co.il - on September 25, 2019
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