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NEPI ROCKCASTLE PLC - Disposal of Romanian office portfolio

Release Date: 17/12/2019 07:05
Code(s): NRP     PDF:  
 
Wrap Text
Disposal of Romanian office portfolio

NEPI Rockcastle plc
Incorporated and registered in the Isle of Man
Registered number 014178V
Share code: NRP
ISIN: IM00BDD7WV31
(“NEPI Rockcastle” or “the company” or “the group”)


DISPOSAL OF ROMANIAN OFFICE PORTFOLIO


1.   INTRODUCTION

     Shareholders are referred to the previous announcements released on 24 May 2019, 16 July 2019 and
     20 November 2019, which indicated the intention of the company to dispose of its Romanian office
     portfolio. NEPI Rockcastle is pleased to announce that, through its wholly owned subsidiaries NE
     Property B.V., Ingen Europe B.V. and NEPI Bucharest Two SRL (“the sellers”), it has entered into an
     agreement (“the agreement”) to dispose of the Romanian office portfolio (“Portfolio”) to AFI Europe
     NV (“AFI Europe” or “the purchaser”), a wholly-owned subsidiary of Africa Israel Properties
     Limited.

2.   RATIONALE AND USE OF PROCEEDS

     As previously stated, the disposal of the Romanian office portfolio is in line with NEPI Rockcastle’s
     investment strategy focused on core dominant retail properties. The proceeds from the disposal will be
     used to fund the group’s pipeline of acquisitions and developments.

3.   DETAILS OF THE PROPERTIES AND FINANCIAL INFORMATION AS AT 30 JUNE 2019

     The Romanian office portfolio, with a fair value which is also the book value of €308 million, comprises
     the following properties:

     Name of property                   Location       Gross lettable area (m2)*        Average rental
                                                                                          €/m2/month
     Floreasca Business Park           Bucharest                           36 300                 18.0
     The Lakeview                      Bucharest                           25 600                 17.5
     Victoriei Office                  Bucharest                            7 800                 29.9
     City Business Centre              Timisoara                           47 800                 14.7

       *rounded to the nearest hundred square metres and excluding terraces and other seasonal GLA

     The above properties were fair valued by DTZ (Cushman & Wakefield Affiliate Partners), an external,
     independent professional valuer, with appropriate and recognised qualifications, and recent experience
     in the location and category of property being assessed.

     The aggregated net operating income attributable to the Romanian office portfolio amounted to €11.8
     million for the six months ended 30 June 2019. This information has been extracted from the reviewed
     consolidated interim results of the group for the first half of 2019.

     All the assets and liabilities related to the Romanian office portfolio were reclassified as assets and
     liabilities held for sale as at 30 June 2019, as summarised below:

      Romanian office portfolio                               € million
      Investment property                                           308
      Current assets                                                 11
      Current liabilities                                            (7)
      Non-current assets                                             10
      Non-current liabilities                                        (4)
      Deferred tax liabilities                                      (28)
      Total net asset                                               290

4.   TERMS OF THE DISPOSAL

     4.1. The disposal

     On 15 December 2019, NEPI Rockcastle entered into an agreement with AFI Europe to dispose of 100%
     of the shares in the subsidiaries holding the Romanian office portfolio for an estimated aggregated cash
     consideration of €290 million, payable at the completion date, based on the net asset value of these
     subsidiaries. The final cash consideration will be determined at the completion date, taking into
     consideration the subsidiaries’ financial statements as of that date.

     The effective date of the transaction is subject to the unconditional approval of the Romania Competition
     Council and the successful conclusion of formalities with Trade Registry. The long stop date for the
     completion of the transaction is 15 May 2020, with the possibility to extend it by a further month. The
     purchaser has put in place guarantees with regard to completion.

     4.2. Material terms

     The agreement is based on the English law and contains warranties, indemnities and undertakings which
     are typically associated with transactions of this nature and were given by the sellers under the
     transaction documents.

5.   CATEGORISATION OF THE TRANSACTION

     The disposal is classified as a category 2 transaction in terms of paragraph 9.5(a) of the JSE Listings
     Requirements and accordingly, is not subject to approval by shareholders.

For further information please contact:

NEPI Rockcastle plc
Mirela Covasa                                                  +40 21 232 1398

JSE sponsor
Java Capital                                                   +27 11 722 3050

Euronext Listing Agent
ING Bank                                                       +31 20 563 6685

Media Relations                                                +44 20 7404 5959
Brunswick Group                                                +27 11 502 73 00
                                                               nepirockcastle@brunswick.com

17 December 2019

Date: 17-12-2019 07:05:00
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