Platzer Fastigheter Annual Report 2013

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FY2013 Annual Report · Platzer Fastigheter

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This annual report is not intended for Dutch

statutory ﬁ ling purposes.

The Company is required to ﬁ le an annual

report containing consolidated and Company

ﬁ nancial statements prepared in accordance

with the Netherlands Civil Code – such a report

will be submitted in due course to the Dutch

authorities and will be available for

shareholders’ inspection at the Company’s

ofﬁ ces in Amsterdam.

Contents

Overview
1 Who we are

2 2013 highlights

4 Our strategy

6 Feature developments

8 Debt restructuring plan

9 Competitive strengths

12 Our markets

13 Our portfolio at a glance

14 Development focus

16 Current portfolio

Business review
30 President and Chief Executive Ofﬁ cer’s statement

33 Operational review

40 Financial review

42 Valuation summary by Cushman and Wakeﬁ eld

Management and governance
43 Management structure

44 Board of Directors and Senior management

46 Directors’ report

50 Corporate governance

57 Risk management

66 Remuneration report

68 Statement of the directors

Financial statements
70 Independent auditors’ report

71 Consolidated statement of ﬁ nancial position

72 Consolidated statement of proﬁ t or loss

73 Consolidated statement of comprehensive income

74 Consolidated statement of changes in equity

75 Consolidated statement of cash ﬂ ows

77 Notes to the consolidated ﬁ nancial statements

Additional information
154 Company’s ofﬁ ces

155 Advisors

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Who we are

We are a leading Central and Eastern
European property developer focusing on
western-style shopping and entertainment
centers, with a diversiﬁ ed platform of
operations in India.

Latvia

the Tel Aviv Stock Exchange in Israel and on the NASDAQ Global

Select Market in the United States. (For more information visit

www.elbitimaging.com.)

The Plaza Centers Group is a leading emerging markets developer

The Group has been present in real estate development in emerging

of shopping and entertainment centers, focusing on developing new

markets for more than 18 years, initially pursuing shopping

centers and, where there is signiﬁ cant redevelopment potential,

and entertainment center development projects in Hungary and

redeveloping existing centers, in both capital cities and important

subsequently expanding into Poland, the Czech Republic, Romania,

regional centers. The Group has been present in the Central and

Latvia, Greece, Serbia, Bulgaria and India. To date, the Group has

Eastern Europe region (“CEE”) since 1996 and was the ﬁ rst to

developed and let 33 shopping and entertainment centers in the CEE

develop western-style shopping and entertainment centers in

region and India, of which 26 were sold with an aggregate gross

Hungary. The Group has pioneered this concept throughout the

value of circa €1.16 billion. 21 of these centers were acquired by

CEE whilst building a strong track record of successfully developing,

Klépierre, a leading player in the continental European shopping

letting and selling shopping and entertainment centers. Since 2006,

center property market, which owns circa 250 shopping centers and

the Group has extended its area of operations beyond the CEE into

manages circa 320 shopping centers in 13 countries in continental

India. In 2012, Plaza identiﬁ ed, with its joint venture partners, a

Europe. Four additional shopping and entertainment centers were

window of opportunity for investment in the US as result of the

sold to the Dawnay Day Group, one of the UK’s leading institutional

dislocation of the property market, speciﬁ cally within the retail

property investors at that time. One shopping center was sold

sector. In 2010, taking advantage of its qualities and experience

in 2007 to Active Asset Investment Management (“aAIM”), a UK

in identifying opportunities, managing and exiting assets, gained

commercial property investment group. The transaction had a

over the years, the Group completed another signiﬁ cant sale of

completion value totaling approximately €387 million, representing

49 US-based assets, mainly to a joint venture between Blackstone

circa 20% of all real estate transactions completed in Hungary

Real Estate and DDR Corp. in a transaction valued at

in 2007.

USD 1.47 billion, which reﬂ ects an ROE for the Group of

nearly 50% in a period of little over 18 months.

Since 1 November 2006, Plaza Centers N.V.’s shares have been

traded on the main board of the London Stock Exchange under the

Throughout 2013, Plaza made considerable operational

ticker “PLAZ”. From 19 October 2007, Plaza Centers N.V.’s shares

improvements across its portfolio. These are clearly reﬂ ected in the

are also traded on the main list of the Warsaw Stock Exchange under

increase in occupancy levels from 89% at the end of 2012 to 93%

the ticker “PLZ”, making it the ﬁ rst property company to achieve this

as at the reporting date. At the same time, Plaza continued to make

dual listing.

good progress in the ongoing process of repositioning its business

model, ensuring its continued focus on deleveraging the balance

Due to the ongoing challenging market conditions and the

sheet and reallocating capital, primarily through the disposal of

upcoming debt maturities, on 18 November 2013 Plaza announced

completed or non-core assets and reinvestment into its core yielding

a debt restructuring plan in order to better structure its debts.

assets. This was best illustrated by the €61 million raised during

Throughout the restructuring process, the Company intends to

the year through the sale of ﬁ ve assets, the remaining proceeds

continue its business activities as normal. The original date of the

from the dissolution of the US holding entity and successful asset

creditors’ voting, scheduled for 17 April 2014, has been postponed

management initiatives at Torun´ Plaza, Suwałki Plaza, Kragujevac

to 26 June 2014 due to technicalities involved in formally completing

Plaza and Riga Plaza.

the arrangement. Despite this, Plaza remains conﬁ dent that it should

be able to conclude its restructuring process successfully in Q3

The Company is an indirect subsidiary of Elbit Imaging Ltd. (“EI”),

2014. For more details on the restructuring process, please refer to

an Israeli public company whose shares are registered for trade on

the Company’s website under Investor relations / Debt restructuring.

PLAZA CENTERS N.V. ANNUAL REPORT 2013

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2013 highlights

Continued improvement of operations,
disposal of non-core assets and
good progress with the restructuring
process.

Total assets
2013: €586 million

2012: €886 million restated

2007

2008

2009

2010

2011

2012

2013

Net Asset Value (NAV)
2013: €274 million

2012: €459 million

2007

2008

2009

2010

2011

2012

2013

1500

1200

900

600

300

1200

1000

800

600

400

200

Consolidated cash position*
2013: €33.7 million

2012: €66.6 million

2007

2008

2009

2010

2011

2012

2013

Proﬁ t (loss) after tax:
2013: €(218) million

2012: €(86) million

2007

2008

2010

2011

2009

2012

300

270

240

210

180

150

120

250

200

150

100

* Including short-term and long-term liquid ﬁ nancial instruments.

2013

PLAZA CENTERS N.V. ANNUAL REPORT 2013

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Asset and operational highlights

Financial highlights

• In May, Plaza sold its 50% stake in a vehicle which primarily

• Reduction in total assets to €586 million (31 December 2012:

holds interest in an ofﬁ ce complex located in Pune, Maharashtra.

€886 million restated – as a result of changes in the accounting

The successful transaction valued assets owned by the vehicle

presentation of joint venture Special Purpose Vehicles (‘SPVs’) (due

collectively at €33.4 million and, as a result, Plaza received gross

to changes in IFRS)), and primarily due to impairment of trading

proceeds of circa €16.7 million.

properties and equity accounted investees as well as debt repayments.

- Book value of the Company’s trading properties reduced

• In July, Plaza successfully completed the sale of 100% of its

by 19% over the year, or by €117 million, primarily due to

stake in a vehicle which owns the interest in the Prague 3 project

impairments recorded.

(“Prague 3”), a logistics and commercial center in the third

district of Prague. The transaction valued the asset at circa €11.1

• Rental income slightly increased to €23.7 million (31 December

million and, as a result, further to related bank ﬁ nancing and other

2012: €23.1 million), due to the improvement in the performance

balance sheet adjustments, Plaza received net proceeds of circa

of the CEE shopping centers. The rental income performance

€7.6 million in cash.

would have been even stronger, had there not been a loss of

income caused by a ﬁ re incident in India.

• On 31 October 2013, a consortium of shareholders of Dream

Island, in which Plaza holds a 43.5% stake, completed the sale

• Net Asset Value decreased by 40% to €274 million (31 December

of its Dream Island project land holding to the Hungarian State

2012: €459 million) primarily as a result of impairment of assets,

for circa €16.5 million (HUF 5 billion). The proceeds of the

mainly in Serbia, Romania and India.

transaction were used by the Consortium to repay a proportion

- Net Asset Value per share of £0.79 (31 December 2012: £1.26),

of the securitised related bank debt held against the asset. As

a decline of 37%, attributable mainly to the abovementioned

a result of a previous non-cash, market driven write-down, no

impairments.

accounting loss was incurred.

• Loss for the year of €218 million (31 December 2012: Loss of

• On 8 November 2013, the Company’s Latvian 50% subsidiary

€86 million), stemming from a non-cash €186 million impairment

signed a new €59.3 million investment loan with a consortium

of trading properties, equity accounted investees, investment

comprising two banks for its shopping and entertainment

property and pre-payments (31 December 2012: €83.7 million

center in Riga, Latvia. The new facility has duration of four

of impairments), and an overall net ﬁ nance cost of €39 million

years and therefore substantially lengthens the duration of the

compared to a net ﬁ nance cost of €17 million in 2012. Impairment

debt compared to the previous loan facility, which was due for

of real estate assets in the fourth quarter of 2013 totalled circa

repayment on 30 June 2014.

€43 million.

- Basic and diluted loss per share of €0.73 (31 December 2012:

• On 14 November 2013, Plaza announced that it had reached an

loss per share of €0.29).

agreement to sell Koregaon Park Plaza, a retail, entertainment and

ofﬁ ce scheme located in Pune, India, subject to the satisfaction

• Consolidated cash position at year end (including restricted

of certain closing conditions. The transaction valued the asset at

bank deposits, short-term deposits and held for trading ﬁ nancial

circa €40 million, the asset’s current book value. Following the

assets) of €33.7 million (31 December 2012: €65.8 million) and

repayment of the outstanding related bank loan, Plaza expects to

current cash position of circa €36 million (€7 million restricted).

generate aggregate cash proceeds from the purchaser totalling

circa €18 million, before taxes and transaction costs, which

• Gearing increased to 64% (31 December 2012: 50%) as a result

should be paid in instalments over the coming two years.

of impairment losses and ﬁ nance costs incurred during the year.

• Plaza’s 70% subsidiary reached an agreement in December 2013

Key highlights since the period end

to sell its 50% equity stake (together with the other 50% joint

venture partner) in the Új Udvar shopping mall in Budapest,

Hungary. As a result of the transaction, proceeds of €2.35 million

in cash were received by Plaza for its share in the asset.

• Improved occupancy levels achieved across the Company’s

existing shopping and entertainment centers in the CEE, with the

overall portfolio occupancy rate increasing from 89% in 2012 to

93% as at the reporting date.

Following the announcement of the Company’s restructuring

programme made on 18 November 2013, Plaza has made good

progress towards resolving its liquidity situation. The market

prices of the Company’s traded debt have reacted positively to the

restructuring plan and negotiations with the Company’s creditors are

moving forward.

The original date of the creditors’ voting, scheduled for 17 April

2014, has been postponed to 26 June 2014 due to technicalities

involved in formally completing the arrangement. For more details

on the court decision, please refer to the Company’s website under

Investor relations / Debt restructuring. Despite this, Plaza remains

conﬁ dent that it should be able to conclude its restructuring process

successfully in Q3 2014.

PLAZA CENTERS N.V. ANNUAL REPORT 2013

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Our
strategy

Plaza will continue in its efforts
to best position the Company against
the ongoing economic and market
uncertainty by striving to ﬁ nd the
optimal blend of progressing with
limited and targeted development
programme into the strongest
economies of the CEE whilst reducing
its levels of gearing. Plaza’s cautious
but opportunistic approach is set to
unlock signiﬁ cant value on behalf of
its shareholders.

PLAZA CENTERS N.V. ANNUAL REPORT 2013

plaza centers/overview

our strategy

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Develop

Develop modern, western-style shopping and entertainment centers

in capital and regional cities, primarily in CEE and India.

Acquire

5 Continue to reallocate capital to pay debts following the sale of a

number of completed and non-core assets and invest in the core

yielding assets in our portfolio.

Development criteria

Selection of target countries

Acquire operating shopping centers that show signiﬁ cant

Our primary focus is on countries in emerging markets and we

redevelopment or growth potential.

Flexibility

Depending on market yields, we either pre-sell or hold and manage

our assets until the exit yields are sufﬁ ciently attractive.

are currently present in CEE and India. In order to determine a

favorable investment climate, we take into account country risk,

GDP per capita and economic growth, ratio of retail sales per capita,

political stability, sophistication of banking systems, land ownership

restrictions, ease of obtaining building and operating permits, busi-

ness risks, existing competition and market saturation levels.

Maintain liquidity and debt management

Site evaluation

In order to resolve its liquidity situation, the Company has ﬁ led

We look to develop our ﬁ rst project in the capital city of a new country,

with the Dutch Court a restructuring plan proposed to its creditors.

and thereafter in regional cities with a minimum catchment area of

The restructuring plan proposes a deferral of the obligations of the

50,000 residents. Site evaluation includes site area, catchment area,

Company for a period of three to four years, or shorter if cash ﬂ ow

local zoning and town planning schemes, proximity to transportation

permits, without requiring the bondholders to take a loss on the

and vehicular routes and legal issues. A carefully structured,

par value of their investments. During the restructuring process

internally developed evaluation process is in place involving each of

creditors are subject to a moratorium.

the relevant disciplines (economics, engineering, marketing, etc.).

Plaza continues to focus on deleveraging its balance sheet during

the period but, as a result of impairment losses recorded in the

period and ﬁ nance costs incurred, the gearing level increased to

64% in 2013.

Project development

Once we have approved a site, we manage its development from

inception to completion, incorporating engineering, marketing,

ﬁ nancial and legal stages, designs, architects, market forecasts and

Successful efforts to sign reﬁ nancing agreements for constructing

feasibility studies.

and/or investment loans and to extend loan duration were made in 2013.

Emerging markets

Objectives

1 Concentrate on existing projects and target new development

opportunities in the strongest countries in CEE, as well as in

India, that have the potential to generate returns of 40% to 60%

on equity invested.

Plaza Centers has a strong track record in developing real estate

projects such as shopping and entertainment centers in emerging

markets. The Group has been present in the CEE region since 1996,

and was a pioneer in bringing western-style shopping malls to

Hungary. The concept was continued throughout the CEE and is now

being exported to India, whilst other development and investment

2 Fund 60% to 75% of total project construction costs through

opportunities in additional countries are being explored further.

competitively priced bank ﬁ nance.

3 Limited commencement of construction for projects meeting the

two major criteria as follows:

- intensive demand from tenants

- backed by external bank ﬁ nancing to ensure minimal equity

investment.

The Company has had considerable success in capitalizing on the

fantastic opportunities that emerging markets have offered.

We carefully investigate the beneﬁ ts and challenges inherent in

every proposed project, adhering to our development criteria.

The Company is currently focusing its development efforts on

4 Deliver considerable progress at the operational level of the

Poland, Serbia, Romania and India. Plaza will continue to advance

business through intensive asset management initiatives, such

remaining projects within its land bank, through obtaining planning

as attracting signiﬁ cant anchor tenants to our assets.

consents and construction permits.

PLAZA CENTERS N.V. ANNUAL REPORT 2013

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Feature
developments

Since foundation, the Group has
developed and let 32 shopping and
entertainment centers in the CEE
region and one in India of which 26
were sold with an aggregate gross
value of €1.16 billion, resulting in a
gain of €360 million.

Plaza has averaged nearly two new shopping centers per

year in the last 18 years and currently owns and manages

seven shopping and entertainment centers. Improved

occupancy levels achieved across the Company’s existing

shopping and entertainment centers, with the overall

portfolio occupancy rate increasing from 89% in 2012

to more than 93% as at the reporting date.

Liberec Plaza
(Czech Republic)

Opened March 2009

Plaza share 100%

17,000m2

GLA

Plaza continues to own and manage Liberec Plaza shopping and entertainment
center. During 2013, the turnover of the mall improved by 10%, whilst occupancy
increased from 80% in 2012 to 86%, including tenants such as Billa, Sephora,
Dracik and Dinopark. Additionally, a lease agreement was recently signed with
Sports Direct, which has opened the store in April 2014.

Riga Plaza
(Latvia)

Opened March 2009

Plaza share 50%

Zgorzelec Plaza
(Poland)

Opened March 2010

Plaza share 100%

49,000m2

GLA

13,000m2

GLA

Riga Plaza shopping and entertainment center is located on the western bank
of the Daugava river by the Sala Bridge. The two-ﬂ oor mall includes an eight-
screen multiplex cinema and 2,000m2 of Fantasy Park. The center continues to
deliver signiﬁ cant operational improvements, seeing occupancy levels increase
to 97% following the lease agreement signed wiht H&M for a 2,700m2 store
which was opened in April 2014. There are ongoing discussions with a
number of potential occupiers for the remaining space, therefore it is expected
that the mall will be fully let by the end of 2014. Also footfall and turnover
improved throughout the year by 7% and 14% respectively.

Zgorzelec Plaza, which has the only cinema in the area, achieved a signiﬁ cant
operational improvement throughout the year and continues to perform in
line with expectations. The occupancy rate of the shopping and entertainment
center was improved from 89% in 2012 to 91% as at the reporting date. In
addition, footfall in the mall increased by 29% compared to 2012 and the
center achieved a 58% growth in turnover on a year-to-year basis.

PLAZA CENTERS N.V. ANNUAL REPORT 2013

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Suwałki Plaza
(Poland)

Opened May 2010

Plaza share 100%

Torun´ Plaza
(Poland)

Opened November 2011

Plaza share 100%

20,000m2

GLA

40,000m2

GLA

Suwałki Plaza, the three-ﬂ oor shopping and entertainment center which
includes a three-screen cinema and a bowling center as well, is 91% let to
international and local tenants such as H&M, Rossmann, New Yorker, KappAhl
and Cinema Lumière, and continues to perform well. Turnover of the center
increased by 10% compared to 2012.

Torun´ Plaza represents Plaza’s tenth completed center in Poland. The center is
89% let to premium international and local brands such as Cinema City, H&M,
C&A, KappAhl, Zara, Bershka, Stradivarius, Pull & Bear and Massimo Dutti,
in addition TK Maxx, an anchor retailer, which opened a 2,700m2 store in
March 2014.

Kragujevac Plaza
(Serbia)

Opened March 2012

Plaza share 100%

Koregaon Park Plaza
(India)

Opened March 2012

Plaza share 100%

22,000m2

GLA

41,000m2

GLA

Plaza opened its ﬁ rst Serbian shopping and entertainment center in
Kragujevac, which is the ﬁ rst western-style mall to be built outside the capital,
Belgrade. As at the reporting date, the center is fully let to remarkable tenants,
including Nike, Adidas, Aldo, New Yorker, Deichmann, TerraNova, Fashion
and Friends, H&O, Oviesse, Fox, Chicco and Home Center. The center shows
signiﬁ cant improvements both in terms of footfall, which increased by 15%,
and turnover, which increased by 17% compared to 2012, demonstrating
Plaza’s ability to capitalize on opportunities in new markets.

In November 2013, the Group reached an agreement to sell Koregaon Park
Plaza, the Company’s ﬁ rst completed entertainment and shopping center in
India, subject to the fulﬁ lment of certain closing conditions.

PLAZA CENTERS N.V. ANNUAL REPORT 2013

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Debt
restructuring
plan

Suspension of payment procedure

On 18 November 2013, the Company applied for suspension of
payments proceedings under Dutch law and simultaneously ﬁ led a
draft restructuring plan (the “restructuring plan” or “plan”) with the
district court of Amsterdam, the Netherlands.

On 18 November 2013, the Court granted the Company a provisional
suspension of payments, appointing an administrator and a
supervisory judge. The Court determined that no hearing should
take place for deciding on the granting of deﬁ nitive suspension of
payments, order that, instead, a creditors meeting will take place to
vote on the restructuring plan on 26 June 2014 and determined that
the Company’s creditors can ﬁ le their claims for voting purposes
before 12 June 2014.

Background

The Company has been faced with challenging market conditions
for some years. Adverse market conditions have primarily been
caused by the underlying economic situation in many of the
countries in which the Company operates, combined with the lack
of transactional liquidity in the investment markets for assets such
as those owned by the Company and the ongoing lack of traditional
bank ﬁ nancing available to real estate developers and investors.

Although Board and senior management team have made
considerable progress in repositioning the Company’s business
model to ensure that it is focused on the deleveraging of its balance
sheet and the recycling of capital, primarily through the disposal
of its non-core assets, the Company has not been able to complete
these transactions within a timeframe that would enable it to meet
its short-term obligations towards the holders of Series A Notes,
the holders of Series B Notes, the Polish bondholders and other
unsecured creditors. As a result, by the end of 2013, the Company
was faced with signiﬁ cant liquidity problems. Notwithstanding the
liquidity issues, the Company continues to have a strong balance
sheet, with a signiﬁ cant positive current net asset value, and owns
assets and development opportunities that offer signiﬁ cant potential
to deliver returns over the medium to long-term. Accordingly, the
Board believes that, on a going concern basis, the Company will
retain substantial value for its stakeholders and will be able to repay
its creditors in full, while the Board is certain that a forced liquidation
would cause creditors and shareholders to incur signiﬁ cant losses.

Purpose and summary

The plan is addressed to all ordinary unsecured creditors of the
Company. The purpose of the restructuring plan is to provide the
Company with the ability to preserve value for its creditors by giving it
time to resolve its liquidity situation and thereby avoiding a liquidation

scenario. This will primarily be achieved through a deferral of payment
obligations. Apart from the proposed payment deferral, the terms of the
restructuring plan do not require bondholders to take a loss on the par
value of their outstanding exposures.

A general, high-level and non-exhaustive brief summary of the
material agreed commercial terms are listed below:

• The plan shall be contingent upon the injection of a fresh €20

million into the Company (“Equity Contribution”), and will become
effective only once the placing of the Equity Contribution shall
have been occurred.

• The Company shall issue to holders of unsecured debt (i.e.,

outstanding debt under the Israeli Series A and B Notes and the
Polish Notes) (“Unsecured Debt”) 13.5% of the Company’s shares
(post the Equity Contribution) for no consideration. Such issuance
of shares will be distributed among the holders of Unsecured
Debt pro rata to the relative share of each relevant creditor in the
Deferred Debt (“Deferred Debt Ratio”).

• All principal payments due during the years 2013-2015 of any
Unsecured Debt (“Deferred Debt”) shall be deferred for three
years from the date of approval of the plan by the court in the
Netherlands (“Approval Date”). If within two years from the
Approval Date the Company manages to repay over 50% of the
Deferred Debt, then the remaining principal payments of the
Deferred Debt shall be deferred for an additional one year.

• Interest payments for the Unsecured Debt that were due during

the suspension of payments period, will be added to the principal
and paid together with it. Following the removal of the suspension
of payments order (“Effective Date”), interest payments will be
paid on their due dates.

• As of 1 January 2014, the annual interest rate of the Unsecured

Debt shall be increased by 1.5%.

• Following the Effective Date, the Company shall pay to the holders
of the Unsecured Debt an amount of €10.5 million on account of
2014 interest payments.

• The Company, its directors and ofﬁ cers and its controlling

shareholder shall be fully released from claims.

• Following the Effective Date, the Company will have to assign

75% of the net proceeds received from the sale or reﬁ nancing of
any of its assets to early repayment of the Unsecured Debt, to be
allocated among the holders of Unsecured Debt in accordance
with the Deferred Debt Ratio.

• The Company will be allowed to execute actual investments

only if the Company’s cash reserves contain an amount equal
to general and administrative expenses and interest payments
for the Unsecured Debt for a six-month period (for this purpose
also receivables with a high probability of being collected in the
subsequent six-month period will be taken in account for the
required minimal cash reserve).

• The plan shall also include, inter alia: (i) certain limitations on

distribution of dividends and incurring of new indebtedness; (ii)
negative pledge on direct and indirect holdings of the Company
on real estate assets; (iii) ﬁ nancial covenants and undertakings
of the Company with respect to the sale and ﬁ nancing of certain
projects and investment in new projects; and (iv) commitment to
publish quarterly ﬁ nancial statements as long as the Unsecured
Debt is outstanding.

Please note that the plan is yet to be ﬁ nalised, therefore the above
only provides a summary of the key material points without going
into speciﬁ c details. Full details of the plan, once submitted to the
Dutch Court, will be provided on the Company’s website under
Investor relations / Debt restructuring.

PLAZA CENTERS N.V. ANNUAL REPORT 2013

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Competitive
strengths

Plaza’s clear priority is to conclude its restructuring process

successfully whilst continuing to leverage the ability and expertise of

its management team and the quality of its income generating assets

across all key parameters such as occupancy levels, footfall and

turnover to achieve success in its day-to-day operations.

Following the announcement of the Company’s restructuring

programme on 18 November 2013, Plaza has made good progress

towards resolving its liquidity situation to safeguard the continuity

of the business and thereby protect the long-term interest of its

investors, creditors and shareholders. The market prices of the

Company’s traded debt have reacted positively to the restructuring

plan and negotiations with the Company’s creditors are moving

forward.

Whilst Plaza have witnessed some conﬁ dence returning for

prospects in Europe’s central and eastern regions, conditions in

many of its markets remained challenging in 2013 as the persistent

uncertainty created by the crisis continued to be felt. Against this

backdrop, throughout 2013, Plaza made considerable operational

improvements across its portfolio. These are clearly reﬂ ected in the

increase in occupancy levels from 89% at the end of 2012 to 93%

as at the reporting date. At the same time, the Company continued

to make good progress in the ongoing process of repositioning

its business model, ensuring its continued focus on deleveraging

the balance sheet and reallocating capital, primarily through

the disposal of completed or non-core assets and reinvestment

into its core yielding assets. This is best illustrated by the €61

million raised during the year through the sale of ﬁ ve assets, the

remaining proceeds from the dissolution of the US holding entity

and successful asset management initiatives at Torun´ Plaza, Suwałki

Plaza, Kragujevac Plaza and Riga Plaza.

These improvements have been possible by leveraging of the deep

relationships that Plaza has created with retailers over a number of

years, many of whom the Company has helped introduce into new

geographies.

Despite its challenged liquidity position and restructuring process,

Plaza’s belief in the strength of the underlying fundamentals of its

assets and land reserves remains intact. By utilizing the extensive

skills of its experienced management team, the deep relationships

Plaza has with its tenants and ﬁ nance providers, and maintaining

its cautious but opportunistic approach, the Company is positioning

itself, on completion of the restructuring, to be able to return

the rewards of capital appreciation and income growth to its

shareholders.

Proven track record

Plaza continues to beneﬁ t from its unrivaled track record across

CEE, having been active in the region for more than 18 years. Central

and Eastern Europe economies are experiencing signs of a change

in sentiment, with Poland and the Czech Republic both reporting

increased investment activity in 2013. However, Plaza has seen

marked differences between the countries north of the region, which

have proved more resilient, and the struggling southern economies,

including Romania and Bulgaria. Despite the challanging market

conditions, several major milestones were achieved in 2013 and

the period to date. On 14 November 2013, Plaza announced that

it had reached an agreement to sell Koregaon Park Plaza, a retail,

entertainment and ofﬁ ce scheme located in Pune, India, subject to

the satisfaction of certain closing conditions.

In addition, a number of signiﬁ cant disposals of non-core assets

during the year were achieved, as follows:

• In May, Plaza sold its 50% stake in a vehicle which primarily holds

interest in an ofﬁ ce complex located in Pune, Maharashtra.

• In July, Plaza successfully completed the sale of 100% of its

stake in a vehicle which owns the interest in the Prague 3 project

(“Prague 3”), a logistics and commercial center in the third

district of Prague.

• In October, a consortium of shareholders in Dream Island,

in which Plaza holds a 43.5% stake, completed the sale of the

Dream Island project land holding to the Hungarian State for circa

€16.5 million (HUF 5 billion).

• In January 2014, in December, Plaza’s 70% subsidiary reached

an agreement to sell its 50% equity stake (together with the

other 50% joint venture partner) in the Új Udvar shopping mall in

Budapest, Hungary.

• Finally, Plaza also sold its interest in a SPV which owns a site in

Roztoky, Czech Republic which was being held for a potential

residential development.

To date, 26 of the completed centers have been subsequently sold

with an aggregate gross value of circa €1.16 billion. These disposals

comprise seventeen shopping centers in Hungary, seven in Poland

and two in the Czech Republic, with the remaining seven shopping

centers currently being held as operational assets, of which three are

located in Poland, one in the Czech Republic, one in Latvia, one in

Serbia and one in India (agreement to sell is in place).

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plaza centers/overview

comp

Plaza focuses upon creating an attractive tenant mix, including

In addition, as stated above, Plaza reached an agreement to sell

fashion, hypermarkets, food courts, electronics, sports and other

Koregaon Park Plaza, a retail, entertainment and ofﬁ ce scheme

retailers, with a special focus on entertainment. Most centers include

located in Pune, India, subject to the satisfaction of certain closing

a cinema multiplex, as well as a Fantasy Park, a state-of-the-art

conditions.

entertainment and amusement facility operated by Plaza’s subsidiary,

which includes bowling alleys, billiard tables, video arcades, internet

With two major JV developments in India due to be delivered in the

cafés, children’s playgrounds, bars and discos.

next few years, the Company’s substantial local platform means

Flexible business model

During the years 1996-2004, when exit yields were high, the Group

retained and operated shopping centers on completion and earned

rental income. Once property yields decreased, between 2004-2008,

the Group sold 26 shopping centers in line with the Company’s

commercial decision to focus its business more on development and

sale rather than operational management.

Mindful of the impact of the ongoing issues in the Eurozone on

the economies in which Plaza operates, the Company will continue

to ﬁ nd the optimal blend of reducing its levels of gearing while

progressing its limited developing programme into the strongest

economies of the CEE. Plaza’s cautious but opportunistic approach

is set to unlock signiﬁ cant value on behalf of its shareholders. It will

continue to sell completed developments as appropriate, but will

hold them on its balance sheet and beneﬁ t from the rental income

until sufﬁ cient sale prices are achieved.

Diversiﬁ cation

Plaza is strategically placed to create shareholders value from this

growth market.

Having monitored the US real estate market for a number of

years, Plaza announced its ﬁ rst transaction in the region in 2010

through the acquisition of a strategic stake in EDT Retail Trust

with its joint venture partners. During 2011, Plaza achieved its

aim of repositioning the portfolio through reducing debt levels,

improving occupancy rates as well as lengthening lease maturities.

Consequently, in June 2012, EPN Group, Plaza’s US-based joint

venture, completed the sale of 47 of its 49 US-based assets in a

transaction valued at US$1.428 billion, which reﬂ ects an ROE for

Plaza of nearly 50% in a period of little over 18 months. In July

2012, EPN Group completed the disposal phase of the Company’s

highly successful ﬁ rst venture in the US with the sale of its two

remaining US assets, and in March 2013, Plaza received the

remaining proceeds from the dissolution of the US holding entity.

Limited number of active developments

In light of market conditions, Plaza took the strategic decision in

The Group is well diversiﬁ ed and active in eight countries in CEE

the second half of 2008 to scale back on the commencement of

and India, while additional countries are being examined for further

new projects and to focus on projects with availability of external

expansion.

Plaza sees strong importance in its investment in India, which has

been less affected by the global economic crisis and will offer Plaza

attractive development prospects for at least the next 10 years. Plaza

has maintained its long-term view of the strong potential demand for
residential and commercial Indian real estate, especially for welllocated

large scale development projects. The sentiment towards the Indian

real estate market remains extremely positive, underpinned by funda-

mentals which are driving the country’s long-term economic growth.

Phase one of the Kharadi Plaza project known as “Matrix One”, a

50:50 joint venture with a local partner, was completed in February
2012. Located in Pune, India, “Matrix One”, a 28,000m2 GLA ofﬁ ce,
was 70% pre-sold upon opening, and in May 2013, Plaza sold its

50% stake in a vehicle which primarily holds interest in Kharadi

Plaza project.

ﬁ nancing and strong tenants demand. Plaza will progress a selected

number of projects in the CEE, such as Poland , Serbia and Romania

where GDP growth and forecasts remain above the average for

Europe. The deferral of the repayment of our debt maturities enables

us to progress with the initiation of projects and investment as

appropriate, including actively managing our income generating

assets to prepare for their ultimate sale, whilst continuing to identify

exit opportunities from our remaining non-core assets. Construction

is planned to commence on Belgrade Plaza (Visnjicka) in Serbia,

Casa Radio, Timisoara Plaza and Cina in Romania, and Chennai in

India. The Company’s cautious but opportunistic approach is set to

unlock signiﬁ cant value on behalf of its shareholders.

Conservative leverage

The Group’s debt position remains conservative, with gearing of

64% at the year end. Plaza continued to focus on deleveraging its

PLAZA CENTERS N.V. ANNUAL REPORT 2013

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balance sheet during the period but, as a result of impairment losses

recorded in the period and ﬁ nance costs incurred, the gearing level

Highly skilled management team

Extensive local and business knowledge with a proven ability

to source strategic development sites, as well as purchasing

yielding assets at an attractive price and designing projects that

meet the demands of the local market. A signiﬁ cant proportion of

management team members have been with Plaza for several years.

Extensive network

A vast and extremely well established network of business

connections with most anchors and large international tenants and

extensive business relationships with large international funds and

real estate market participants. This has been demonstrated by our

proven ability to pre-sell projects (before or during the construction)

and achieve high levels of pre-lets.

Thorough project evaluation

Prior to each project, Plaza goes through a carefully developed,

structured evaluation process involving each of the relevant

disciplines (economics, engineering, marketing, etc.).

increased.

In November 2013, the Company’s Latvian 50% subsidiary signed

a new €59.3 million investment loan with a consortium comprising

two banks for its shopping and entertainment center in Riga,

Latvia. The new facility has duration of four years and therefore

substantially lengthens the duration of the debt compared to the

previous loan facility, which was due for repayment on 30 June

2014.

Total bank borrowing reduced to €175 million. This decrease is

primarily the result of loans disposed of and repaid during the year.

All loans were accounted for as current liabilities following the

suspension of payments by Plaza and the uncertainty surrounding

the restructuring plan.

Clearly identiﬁ ed pipeline and acquisitions

Plaza is engaged in 27 development projects, and owns two ofﬁ ce

buildings and seven operational assets, located across the CEE

region and in India. The Group has the ability to identify new growth

opportunities, constantly targeting attractive returns in fastgrowing

emerging markets.

Capital markets

On 20 November 2012, the Board approved the extension of the

Company’s second bond buyback programme of A and B series

Notes traded on the Tel-Aviv Stock Exchange. The bond buyback

programme will conclude on 31 December 2014 with a maximum

amount to be purchased of up to NIS 600 million, increased from

NIS 150 million. Under the two bond buyback schemes (the ﬁ rst

was concluded on 28 November 2011 in which the target of

NIS 150 million was fully executed), Plaza has to date repurchased

and cancelled NIS 38.6 million par value of its A and B series bonds

and as of 31 December 2013 the outstanding amount was

NIS 15.9 million par value of bond series B, as a result of bond

repayments and bonds resale.

Strong brand name

Plaza Centers has become a widely recognized brand name for

successful property development in CEE which is beneﬁ cial at

all stages of project execution (e.g. following portfolio sales to

Klépierre, Dawnay Day and aAIM, the purchasers continue to use the

“Plaza Centers” trade name under license).

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Our markets

Europe

Poland

Serbia

Romania

Latvia

Czech Repp.

Hungary

Greece

Bulgaria

India

* Source: CIA – The World Factbook.

PLAZA CENTERS N.V. ANNUAL REPORT 2013

Marrkket daataa

CurCurrrCuCu renrennt mt maarkrkeet

Population (m)*

Poland

Serbia

Romania

Latvia

Czech Republic

38.4

7.2

21.8

2.2

10.6

GDP per capita*

Hungary

Greece

Bulgaria

India

10.8

1,221

Serbia Romania

Latvia

Czech
Republic

Hungary Greece Bulgaria

India

Unemployment*

Serbia Romania

Latvia

Czech
Republic

Hungary Greece Bulgaria

India

CPI - Change in 2013*

Serbia Romania

Latvia

Czech
Republic

Hungary

Bulgaria

India

Greece

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Our portfolio
at a glance

Total of 29 assets located across CEE region and in India.
Estimated value of €2,039 million on completion.

Portfolio composition – by country

Market value of the land and project (€m)2

Active

Under development/planning

Ofﬁ ces

Poland

Serbia Romania

Latvia

Czech
Republic

Hungary Greece Bulgaria

India

Project

Complete and active projects

Current developments

Pipeline projects

Total as at 31 December 2013

1 Value of Plaza Centers’ stake by Cushman and Wakeﬁ eld as of 31 December 2013.

2 Excluding Koregaon Park Plaza, as there is an agreement for sale in place.

3 Some of the assets were valued with the comparative sales price method, no value at completion was estimated.

Group NAV at 31 December 2013

Market value of land and projects by Cushman and Wakeﬁ eld4

Assets minus liabilities as at 31 December 20135

Total

NAV per issued share

4 Except for Târgu Mures¸ (Romania) project, where the company has applied a more conservative value.

5 Excluding book value of assets which were valued by Cushman and Wakeﬁ eld.

180

177

Serbia Romania

Latvia

Czech
Republic

Hungary Greece Bulgaria

India

200

160

120

Market value on
completion (€m)1

Market value of the land
and the project (€m)1

261.52

1,067.9

709.13

2,038,5

261.52

195.8

90.5

547.8

€’000

545,142

(271,370)

273,772

£0.79

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Timis¸oara
Plaza
Romania

38,000m2
GLA

Plaza owns a plot of land with an area of 32,000m2 in
Timis¸oara, on which it is intending to develop a shopping

and entertainment center. The planned center will
have a GLA of approximately 38,000m2 and includes a
supermarket, a hypermarket complex, fashion retailers, a

fantasy park, a food court and restaurants. Plaza intends

to commence construction in 2014/2015 and the center is

scheduled to open in 2016.

Development
focus

The Company took the strategic
decision to scale back on starting
new projects and acquisitions, and to
focus on projects with availability of
external ﬁ nancing or strong tenants
demand. In the near future the Group
plans to progress in a selected
number of projects which are: Casa
Radio (ﬁ rst phase), Timis¸oara Plaza
and Cina in Romania; Łódz´ Plaza in
Poland; Belgrade Plaza (MUP) and
Belgrade Plaza (Visnjicka) in Serbia
and Chennai in India. Out of these
seven projects Plaza presents here
three, which it intends to complete in
the upcoming years.

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Łódz´
Plaza
Poland

35,000m2
GLA

Łódz´ is the second largest city in Poland with over 740,000

inhabitants. The site owned by Plaza is located in a residential

district of the city with a catchment area of 270,000 people.

Łódz´ Plaza is planned to be a two-ﬂ oor shopping and entertain-

ment center with approximately 35,000 m² of GLA anchored

by a supermarket, a department store as well as a multi-screen

cinema and bowling and entertainment center. The project

is currently under Master Plan stage which is expected to be

completed by the end of 2014. Plaza intends to commence

construction in 2015/2016, with completion targeted for 2017.

Belgrade
Plaza
(Visnjicka)
Serbia

32,000m2
GLA

Plaza owns a 31,000m2 plot of land in Belgrade, the capital
of Serbia. The Belgrade market offers particular potential,

with its large populated catchment area of approximately

2.5 million people. Plaza intends to develop a new shopping

and entertainment center with a GLA of approximately
32,000m2. The Group intends to commence construction
in 2014/2015 and the center is scheduled to open in

2015/2016.

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Current
portfolio

Poland

Project

City

Ownership

GLA (m2)

Market value Market value of the

Expected

Torun´ Plaza

Suwałki Plaza

Torun´

Suwałki

Zgorzelec Plaza

Zgorzelec

Łódz´ Plaza

Kielce Plaza

Leszno Plaza

Łódz´ (Residential)

Łódz´

Kielce

Leszno

Łódz´

100%

* Operating ** Under planning and feasibility examination

1 In 2013 the Company applied a more conservative approach, and lower value was used

in the ﬁ nancial statements than in the valuation report.

2 Asset was valued with the comparative sales price method, no value at completion was

estimated.

3 GBA

Plaza has already completed 10 shopping and entertainment

centers in Poland of which seven have already been sold.

Currently the Group owns and operates three completed shopping

and entertainment centers across Poland. During the year, each

of the centers have delivered notable asset management success,
with over 6,800m2 of new lettings achieved, improving overall
occupancy throughout the Polish portfolio from 87% in 2012 to

90% as at the reporting date.

on completion

land and project

completion

31 December

2013 (€)

97,580,000

97,580,000 Opened in Q4 2011*

43,525,000

43,525,000 Opened in Q2 2010*

17,125,000

17,125,000 Opened in Q1 2010*

74,214,000

7,925,000

2017

75,502,000

5,350,0001

n/a2

1,719,000

6,500,000

40,000

20,000

13,000

35,000

33,000

16,000

80,0003

89,331,000

Torun´ Plaza

Torun´ Plaza: complete and active project

Zgorzelec Plaza: complete and active project

Torun´ Plaza is located in Torun´, an almost 800-year-old city of

Zgorzelec Plaza is located in Zgorzelec in south west Poland,

approximately 200,000 inhabitants. Torun´ is one of the most

near the German border. Thanks to two roads border crossing

beautiful cities of Poland located at the intersection of ancient trade

(including one of the largest in Poland), a railway border crossing

routes. The gothic buildings of Torun´’s old town were designated as

and the restored old town bridge which connects the old towns

a world heritage site by UNESCO in 1997. Torun´ Plaza, which opened

of Zgorzelec and Goerlitz (58,000 citizens on the German side),

in November 2011, is the Group’s tenth completed development

Zgorzelec is a “gate” between Germany and Poland. The shopping

in Poland. The two-ﬂ oor shopping and entertainment center with
approximately 40,000m2 of GLA, is anchored by Zara, Reserved,
Home & You, New Yorker, H&M, Media Expert, Carry, TK Maxx, a

multi-screen Cinema City, Pure ﬁ tness center as well as a Fantasy

and entertainment center is situated less than ﬁ ve minutes walking

distance from the railway station. Zgorzelec Plaza comprises
approximately 13,000m2 of GLA anchored by H&M, KappAhl,
Douglas, Carry, a Fantasy Park entertainment area, a ﬁ tness center,

Park bowling and entertainment area. In 2013, occupancy of the

the only cinema in the area and 300 parking spaces. In 2013,

mall increased to 89% compared to 84% in 2012. The contract with
TK Maxx, the multinational fashion retailer was signed for 2700m2,
creating a new two-level store which was opened in March 2014.

The letting represents circa 7% of the total lettable area of the mall.

occupancy increased to 91% from 89% in 2012 and the center

achieved a 58% growth in turnover on a year-to-year basis.

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Suwałki Plaza

Leszno Plaza

Suwałki Plaza: complete and active project

Kielce Plaza: pipeline project

Suwałki Plaza is located in Suwałki, a city crossed by expressway

Plaza has won a competitive tender and acquired a site from PKS

E67(8), which links Augustow with the Lithuanian border. Suwałki

Kielce S.A. (the local branch of the Polish National Bus Company)

is a city with approximately 70,000 inhabitants and is located 45km

for the development of a major new shopping and entertainment

from the Polish-Lithuanian border. The creation of Suwałki special

center in Kielce. The new center will be located on a 30,000m² plot

economic zone offers new opportunities for trade, commerce and

alongside a major road and two km from the heart of Kielce. Kielce

tourism. Suwałki Plaza, which was opened in May 2010, is located

has over 200,000 inhabitants and an estimated catchment area of

in the main commercial and residential district of the city and is

approximately 350,000 people, and is located in Central Poland on

fronted by an important arterial route to the east. It is also located

the main motorway linking Warsaw and Kraków. On completion,

on a junction of a street which links directly into the city center. The

the scheme will have a GLA of 33,000m², and approximately

PKS bus terminal and main railway station are located approximately

1,000 car parking spaces. The Company will be targeting a mixture

one km from the shopping and entertainment center. Suwałki

of domestic and high-proﬁ le international retailers and entertainment

Plaza is a three-ﬂ oor shopping and entertainment center with
approximately 20,000m2 of GLA anchored by Delima delicatessen,
H&M, KappAhl, Deichmann, Carry, HeBe, Douglas and Empik. The

operators as potential tenants for the center. The project is under

planning and feasibility examination.

entertainment area comprises a three-screen cinema and bowling

Leszno Plaza: pipeline project

and entertainment center. In 2013, occupancy increased to 91%

compared to 90% in 2012.

Łódz´ Plaza: current development

Plaza has a perpetual usufruct over a 18,000m² site in Leszno,

for the development of a new shopping and entertainment center.

The site is ideally located in the center of Leszno, a city with

65,000 inhabitants, situated in western Poland between the two

Łódz´ Plaza is located in Łódz´ , the second largest city in Poland with

big economic centers of Poznan´ and Wrocław, and is close to

over 740,000 inhabitants.

the central railway and bus station. On completion, the shopping

Łódz´ is recognized as an important academic and cultural center

and entertainment center is intended to have a GLA of 16,000m²

in Poland, hosting well-known cultural events. The site is located

providing space for over 70 shops and 450 car parking spaces. The

in a residential district of the city with a catchment area of 270,000

project is under planning and feasibility examination.

people. Łódz´ Plaza is planned to be a two-ﬂ oor shopping and

entertainment center with approximately 35,000m² of GLA anchored

Łódz´ (Residential): pipeline project

by a supermarket, a department store as well as a multi-screen

cinema and bowling and entertainment center. The project is

Plaza owns part of a development site and has a perpetual usufruct

currently under Master Plan stage, which shall be prepared by the

over the remaining part of the site, located in the center of Łódz´, which

city municipality and the process is expected to be completed by

is suitable for use as a residential and ofﬁ ces area. The city of Łódz´,

the end of 2014. The Group intends to commence construction in

which is the administrative capital of the Łódzkie region, is situated in

2015/2016, with completion targeted for 2017.

the center of Poland approximately 140km south west of Warsaw, and,

with a population of over 740,000, it is the second most populous city

in Poland. The site is located in the central university district, within

500 meters of the popular Piotrkowska pedestrian street. The site is

also located in close proximity to large high density housing estates.

The planned development will comprise built area of approximately
80,000m2. The Group is also considering selling the plot.

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Current
portfolio

Serbia

Project

City

Ownership

GLA (m2)

Market value Market value of the

Expected

on completion

land and project

completion

31 December

2013 (€)

Kragujevac Plaza

Kragujevac

Belgrade Plaza (Visnjicka)

Belgrade

Belgrade Plaza (MUP)

Belgrade

100%

22,000

32,000

41,775,000

41,775,000 Opened in Q1 2012*

108,309,000

19,025,000

2015-2016

63,0001

145,729,000

16,150,000

2017

* Operating

1 GBA

In March 2012, Plaza completed its ﬁ rst shopping and

entertainment center in Serbia, Kragujevac Plaza. It is the ﬁ rst

western-style shopping and entertainment center to be opened

outside the capital, Belgrade. As of the reporting date, the center

is fully let to remarkable tenants, demonstrating the success

of the Company’s ﬁ rst venture into Serbia. Currently the Group

has two additional sites for the development of mixed-use and

shopping and entertainment projects in the capital Belgrade.

Kragujevac Plaza: complete and active project

Kragujevac Plaza

Kragujevac is the fourth largest city in Serbia with a population of

180,000 inhabitants and a wider catchment area of approximately

Belgrade Plaza (MUP): current development

490,000 people. It is the largest city in the Sumadija region and the

administrative center of the region.

The shopping and entertainment center, which was opened to
the public in March 2012, comprises 22,000m2 of GLA and is
anchored by C&A, New Yorker, Home Center, Cineplexx, Deichmann,

McDonald’s, Adidas, Benetton and Idea.

Plaza won a competitive tender announced by the Government of

Serbia for a site located in the center of Belgrade, which it intends to

develop into an ofﬁ ce space together with a hotel and retail gallery.
The development is expected to comprise a total of 63,000m2 of GBA
including an apartment hotel, business center and shopping gallery

Kragujevac Plaza is the ﬁ rst western-style shopping center that has

as well as 700 car parking spaces.

been completed in Serbia outside the capital, Belgrade.

Belgrade Plaza (Visnjicka): current development

The Belgrade market offers particular potential, with its large

populated catchment area of approximately 2.5 million people. The

new complex will be located on the prominent site of the former

Plaza owns a 31,000m2 plot of land in Belgrade, the capital of
Serbia. The Belgrade market offers particular potential, with its large

Federal Ministry of Internal Affairs, situated on the main street

which runs through the center of Belgrade. The area is home to

populated catchment area of approximately 2.5 million people.

foreign embassies, the Serbian Government, the Serbian Ministry of

The Company intends to develop a new shopping and entertainment
center with a total GLA of approximately 32,000m2. The Group
intends to commence construction in 2014/2015 and the center is

Finance, the Belgrade Chamber of Commerce and Belgrade’s largest

public hospital as well as the city fair and the future railway station.

The Group intends to commence construction in 2015/2016 and the

scheduled to open in 2015/2016.

center is scheduled to open in 2017.

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Belgrade
Plaza
(MUP)
Serbia

63,000m2
GBA

The building is located in the center of Belgrade in

a neighborhood of government ofﬁ ces and foreign

embassies. On completion, Belgrade Plaza (MUP) will

comprise a shopping gallery, an apartment hotel and

business center. Construction is planned to commence in

2015/2016 and completion is scheduled for 2017.

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Current
portfolio

Romania

Project

City

Ownership

GLA (m2)

Market value Market value of the

Expected

on completion

land and project

completion

31 December

2013 (€)

700

1,800,000

Operating

38,000

76,965,000

10,825,000

555,0001

622,880,000

130,613,000

2016

20172

4,786

58,000

14,000

17,000

14,000

10,000

18,000

n/a4

2015-2016

94,946,000

11,550,000

14,868,000

40,920,000

9,959,000

5,620,000

1,650,000

2,375,000

72,344,000

6,175,0005

n/a6

6,300,000

100%

75%

100%3

100%

Palazzo Ducale

Timis¸oara Plaza

Casa Radio

Cina Plaza

Ias¸i

Bucharest

Timis¸oara

Bucharest

Ias¸i

Csíki Plaza

Miercurea Ciuc

Slatina Plaza

Slatina

Hunedoara Plaza

Hunedoara

Târgu Mures¸ Plaza

Târgu Mures¸

Constant¸a Plaza

Constant¸a

* Under planning and feasibility examination

1 GBA

2 First phase

3 Development rights

4 External valuation was not conducted.

5 In 2013 the Company applied a more conservative approach, and lower value was used

in the ﬁ nancial statements than in the valuation report.

6 Asset was valued with the comparative sales price method, no value at completion was

estimated.

Plaza has a signiﬁ cant development pipeline in Romania,

with nine sites for shopping and entertainment centers and

mixed-use schemes in various stages of development.

The Company continues checking the feasibility and planning of

the projects, including obtaining permits.

Timis¸oara Plaza

Palazzo Ducale (Bucharest): operational ofﬁ ce

Timis¸oara Plaza: current development

In October 2007, the Company acquired a prestigious French-style

villa converted into an ofﬁ ce building. The building is located in the

Plaza owns a plot of land with an area of 32,000m2 in Timis¸oara, on
which it is intending to develop a shopping and entertainment center.

center of Bucharest and was completely renovated in 2005. The total
constructed area is approximately 700m2, built on a plot of around
600m2 and consists of three ﬂ oors, a basement and a garage.
All three ﬂ oors are currently leased.

The site is situated in the north east of Timis¸oara, a city in western

Romania, close to the border with Hungary with a population

of 320,000 inhabitants and a catchment area of approximately

700,000 inhabitants. The site is situated on a three-way junction

and enjoys excellent visibility. The planned center will have a GLA of
approximately 38,000m2 which is intended to include a supermarket,
a hypermarket complex, fashion retailers, a fantasy park, a food

court and restaurants. The Group intends to commence construction

in 2014/2015 and the center is scheduled to open in 2016.

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Casa
Radio
Romania

555,000m2
GBA

Casa Radio will include a 76,000m2 GLA shopping mall
with an 11,000m2 hypermarket and indoor leisure center
(one of the largest in Europe), ferris wheel, approximately
148,000m2 GLA of ofﬁ ces, hotel complex with conference
center and 300 rooms, an apartment hotel with 150

apartments, casino and approximately 4,500 underground

car parking spaces.

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Romania

Casa Radio (Bucharest): current development

In February 2007, the Company consummated a transaction for the

acquisition of a 75% interest in a company (the “Project Company”),

which under a public-private partnership agreement with the

Government of Romania is expected to develop the Casa Radio

(Dambovit¸a) site in central Bucharest. The property comprises a
site covering an approximate area of 92,000m2 (97,000m2 including
5,000m2 for Public Authority Building (“PAB”)).
The proposed scheme will comprise the refurbishment of the existing

building as well as the development of additional space annexed

to the building and on adjoining land. The development of Casa
Radio comprises approximately 555,000m2 of built area, including
a 76,000m2 GLA shopping mall with an 11,000m2 hypermarket and
indoor leisure center (one of the largest in Europe), ferris wheel,
approximately 148,000m2 GLA of ofﬁ ces, hotel complex with
conference center and 300 rooms, an apartment hotel with 150

apartments, casino and approximately 4,500 underground car parking

Ias¸i Plaza: pipeline project

Ias¸i Plaza

Hunedoara Plaza

spaces. The Company expects to complete the ﬁ rst phase of the pro-

ject, which includes the shopping center, parking and PAB, in 2017.

Plaza has purchased a 46,500m2 plot of land in Ias¸i, on which it
is expecting to develop a shopping and entertainment center and

ofﬁ ce space. Ias¸i Plaza is situated in Ias¸i, a city in the north east of

Romania, with a population of approximately 350,000 inhabitants

and a catchment area of approximately 820,000 inhabitants. The
shopping center is planned to comprise approximately 40,000m2 of
GLA, and is intended to include an anchor supermarket, a cinema,

fashion retailers, a fantasy park, a food court and restaurants. In
addition, the project is intended to include ofﬁ ce space of 18,000m2
GLA. The project is under planning and feasibility examination.

Csíki Plaza: pipeline project

Slatina Plaza

Plaza purchased a plot of land with an area of 36,500m2 in Miercurea
Ciuc, for the development of a shopping and entertainment center.

Cina (Bucharest): current development

Plaza has lease rights for 49 years (starting 12/2007) for an existing

building in Cina, Bucharest. Cina is located in Bucharest city center,

on Calea Victoriei Venue, next to Romanian Athenaeum, among

central iconic landmarks: Romanian Art Museum, Revolution

Csíki Plaza is situated in the center of Miercurea Ciuc, a city in

Romania, with a population of 50,000 inhabitants and a catchment

area of approximately 300,000 inhabitants. The site is situated

400 meters from the city hall. The shopping center is planned to
have a GLA of approximately 14,000m2, and is intended to include
a supermarket, fashion retailers, a food court and restaurants.

Construction commenced in late 2008 and stopped during 2009

Square, Central University Library and more. The Group intends to

due to lack of interest from tenants derived from the economic

develop the building into an exclusive ofﬁ ce building with luxury
retail space with a GLA of approximately 5,000m2. The Group intends
to commence construction in 2014 and the center is scheduled to

crisis. Currently the Group intends to sell the project or alternatively

checking the option to lease-up the project parallel to the

development of other sites in Romania – subject to leasing progress

open in 2015/2016.

and ﬁ nancing.

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Cina
Plaza
Romania

4,786m2
GLA

Cina Plaza is located in Bucharest city center, on Calea

Victoriei Venue, next to Romanian Athenaeum. The Group

intends to develop the building into an exclusive ofﬁ ce

building with luxury retail space with a GLA of approximately
5,000m2. The Group intends to commence construction in
2014 and the center is scheduled to open in 2015/2016.

PLAZA CENTERS N.V. ANNUAL REPORT 2013

Slatina Plaza: pipeline project

Plaza has acquired a site in Slatina, in southern Romania. The site
totals approximately 24,000m2 and is located in the north west part
of Slatina. Slatina is a city with around 80,000 inhabitants and is

considered a major city in the county of Olt which has approximately

520,000 inhabitants. The Company plans to build a shopping and
entertainment center with approximately 17,000m2 of GLA.
The project is under planning and feasibility examination.

Hunedoara Plaza: pipeline project

Plaza has acquired a 41,000m2 site in Hunedoara. The site is
intended to be developed into a modern, western-style shopping and
entertainment center, with 14,000m2 of GLA. It is ideally located on
the main entry to the city from Deva which is near the city center.

It has 70,000 inhabitants and catchment area of 200,000 people.

The project is under planning and feasibility examination.

Târgu Mures¸ Plaza: pipeline project

Plaza has acquired a 31,500m2 site in Târgu Mures¸, to develop
a power center, with a planned GLA of 10,000m2. The proposed
development is ideally located near to the city center, close to the

main road that links to the neighbouring towns of Cluj-Napoca and

Alba Iulia. The project is under planning and feasibility examination.

Constant¸a: pipeline project

Plaza has acquired a 26,500m2 plot in Constant¸a. The plot is
conveniently located on one of the two main entrance roads to the

city and consists of an existing shopping center and an open parking
lot of 8,500m2. Constant¸a is located on the Black Sea bank and is
one of Romania’s main industrial, commercial and tourist centers.

The Group is investigating the option of adapting the existing
shopping center to create approximately 18,000m2 of GLA which will
be suitable for one big anchor such as a leading supermarket and/or

a DIY store together with some smaller retail units.

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Current
portfolio

India

Project

City

Ownership

GLA (m2)

Market value Market value of the

Expected

Koregaon Park Plaza

Chennai

Bangalore

Pune

Chennai

Bangalore

100%

40%

25%

41,000

230,0002

310,0003

on completion

land and project

completion

31 December

2013 (€)

SOLD1

2013 (€)

SOLD1 Opened in Q1 2012*

39,899,000

11,272,000

2014-2019

90,665,000

12,251,000

* Operating ** Under planning and feasibility examination

1 The Company signed an agreement for the sale of Koregaon Park Plaza (subject to the

fulﬁ lment of certain closing conditions), therefore no valuation was conducted.

The book value of the asset is circa €40 million.

2 For sale.

3 GBA

In May 2013, the Group has completed its ﬁ rst transaction in India

with the sale of its 50% interest in a vehicle which mainly holds

interest in an ofﬁ ce complex project located in Pune, India.

In November 2013, the Group reached an agreement to

sell Koregaon Park Plaza, its ﬁ rst completed shopping and

entertainment center in India which was opened in 2012.

Currently the Group has interest (through a joint venture with Elbit

Imaging) in two sites for residential developments located in the

cities of Chennai and Bangalore.

Bangalore

Koregaon Park Plaza: complete and active project

Chennai: current development

Koregaon Park Plaza shopping and entertainment center comprises
a 41,000m2 GLA and it was completed and opened to the public in
March 2012. It is the Group’s ﬁ rst completed project in India and

The Indian JV Vehicle (in which Plaza’s share is 50%) has an

80% stake in a company which holds a 75 acres plot (and paid

advances in order to secure acquisition of an additional 8.4 acres)

is located in the upmerket area of Pune, Maharashta State. In June

in Chennai, India’s fourth largest city with a population of over

2012, a ﬁ re event occurred at the center (due to a tenant’s faulty

electrical equipment), which required a temporary close-down,

but did not consume it entirely. The center’s safety and evacuation

procedures were implemented quickly and efﬁ ciently and no injuries

eight million people. The site will be developed into a residential
project consisting of approximately 160,000m2 of plotted area for
development and approximately 70,000m2 for high quality villas. The
Company anticipates that the project will be completed in phases

occurred in the incident. Although roughly two thirds of the center’s

between 2014/2015 to 2018/2019.

rentable area was reopened in August 2012, the reminder of the cen-

ter required extensive renovation and these works were completed

Bangalore: pipeline project

in the second quarter of 2013. In June 2013 the Company collected

INR 529 million (€6.9 million) refund from the insurance company

The Indian JV Vehicle currently has a 50% stake in a company which

in connection with the damage occurred in the ﬁ re in Koregaon Park

has rights on a 54 acres plot in Bangalore. The site located on the

shopping center, which covered all the renovation costs.

eastern side of Bangalore, India’s ﬁ fth largest city, with a population

In November 2013 Plaza reached an agreement to sell the Koregaon

of over eight million people. The JV Vehicle intends to develop

Park Plaza, subject to the fulﬁ lment of certain closing conditions.

the site into a mega mixed-use project with a total built area of
310,000m2. The project will comprise over 1,100 luxury residential
units. The project is under planning and feasibility examination.

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Koregaon Park Plaza, India

PLAZA CENTERS N.V. ANNUAL REPORT 2013

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Latvia
Czech Republic
Hungary
Greece
Bulgaria

Project

City

Ownership

GLA (m2)

Market value Market value of the

Expected

on completion

land and project

completion

31 December

2013 (€)

Latvia

Riga Plaza

Czech Republic

Liberec Plaza

Hungary

Riga

50%

49,000

43,863,000

43,863,000 Opened in Q1 2009*

Liberec

100%

17,000

17,675,000

17,675,000 Opened in Q1 2009*

David House

Budapest

Arena Plaza extension

Budapest

100%

2,000

40,000

3,950,000

Operating

88,941,000

7,800,000

Greece

Pireas Plaza

Bulgaria

Athens

100%

26,000

94,555,000

15,300,000

Shumen Plaza

Shumen

100%

20,000

31,260,000

2,125,000

* Operating ** Under planning and feasibility examination

Plaza owns two operating shopping centers in Latvia and in the

Czech Republic, three developments in Hungary, Greece and

Bulgaria, and one ofﬁ ce building in Hungary.

Latvia

Riga Plaza: complete and active project

Liberec Plaza, Czech Republic

Riga Plaza is located on the west coast of the Daugava river, south

west of Riga’s city center. Riga, the capital of Latvia and the largest

city in the Baltic States, has a population of approximately 750,000

inhabitants. Riga Plaza has excellent connections to the city center

(a three to ﬁ ve-minute drive), as well as outstanding connections

to the nearby main roads. There are eight public transport stops

Czech Republic

(trolleybus and bus) located within 500 meters, with the nearest

Liberec Plaza: complete and active project

public transport stop located directly in front of Riga Plaza. The

primary catchment area is made up of the 350,000 inhabitants

Liberec Plaza is located in the center of Liberec, a city in the north of

of Riga’s west coast. Riga Plaza is a two-ﬂ oor shopping and
entertainment center with a GLA of approximately 49,000m2,
anchored by a hypermarket, an eight-screen multiplex cinema
and 2,000m2 of Fantasy Park. In 2013, occupancy of the mall has
increased to 97% from 94% in 2012. H&M, a multinational fashion
retailer signed a contract for 2,700m2 store which was opened in
April 2014. It is expected that the mall will be fully let by the end

of 2014.

the Czech Republic, close to the border with Germany and Poland,

with a population of 101,000 inhabitants and catchment area of

approximately 350,000 inhabitants. The site is situated 20 meters from

the main square. The complete center comprises of approximately
17,000m2 of GLA, and includes an anchor supermarket, fashion
retailers, a squash and sports center, a Dinopark, a food court and

restaurants. The center is also comprising a residential area of
514m2 (ﬁ ve apartments) and 1,100m2 of ofﬁ ce space. The center
was opened to the public in March 2009. Occupancy of the mall

increased in 2013 to 86% compared to 80% in 2012.

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Riga
Plaza
Latvia

49,000m2
GLA

Riga Plaza is a two-ﬂ oor shopping and entertainment
center with a GLA of approximately 49,000m2, anchored
by a hypermarket, an eight-screen multiplex cinema and
2,000m2 of Fantasy Park. It is expected that the mall
will be fully let by the end of 2014.

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Latvia
Czech Republic
Hungary
Greece
Bulgaria

Hungary

Bulgaria

David House (Budapest): operational ofﬁ ce

Shumen Plaza: pipeline project

The Company owns an ofﬁ ce building located on Andrássy

Boulevard, a prestigious location and one of the most sought-

Plaza has purchased a 26,000m2 plot of land in Shumen, one of the
largest cities in north-eastern Bulgaria, 80km from Varna. The site is

after streets in the center of Budapest. Several foreign embassies

ideally situated at the crossroads of the two major trafﬁ c arteries in

are situated nearby. The building facades of all buildings on the

Shumen, within a short walking distance to the city center, railway

Andrássy Boulevard, including David House, are listed in the “World

station and university.

Heritage” list. The building was reconstructed / refurbished by

Plaza during 2000-2001 in cooperation with the local monument

preservation authority. Many of the original features have been

Shumen Plaza is expected to be the ﬁ rst western-style shopping
center in the district and to serve the city population of approximately

retained, including the inner courtyard, staircases, stucco, ornate

100,000 people and a larger catchment of 205,000 people. Shumen

metalwork and ﬁ ne wood carvings. The building is located on a
800m2 plot and consists of four ﬂ oors, an atrium and a basement,
with a total constructed area of approximately 2,000m2.

Plaza is planned to be a three-ﬂ oor commercial and entertainment
center with 20,000m2 GLA and 650 parking spaces. The project is
under planning and feasibility examination.

Arena Plaza extension (Budapest): pipeline project

The Arena Plaza extension is a planned ofﬁ ce addition to Arena Plaza
that is intended to comprise approximately 40,000m2 GLA of “class
A” ofﬁ ces. The Arena Plaza extension will occupy part of the former
historic Kerepesi trotting track in the 8th district of Budapest. The
project is under planning and feasibility examination.

Greece

Pireas Plaza (Athens): pipeline project

Plaza currently owns a plot of approximately 15,000m2 in the city
of Piraeus, a commercial-industrial center 10km from the heart of

Athens. The site has an ideal highly visible and commercial position

at the junction of two of the biggest arteries in Attica: National

Highway, running from the north to the south of Greece and Piraeus

Avenue, connecting the center of Athens with the port of Piraeus.

Conveniently located in front of the ISAP metro line, bus stations

and in a walking distance from Europe’s largest passenger port, the

project will be easily accessed by a large catchment of more than

one million people. Pireas Plaza is planned to be a three-storey
commercial and entertainment center with 26,000m2 GLA and will be
served by four underground parking levels for 775 cars. The project

is under planning and feasibility examination.

PLAZA CENTERS N.V. ANNUAL REPORT 2013

Arena Plaza extension, Hungary

Shumen Plaza, Bulgaria

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Pireas
Plaza
Greece

26,000m2
GLA

Plaza owns a plot of approximately 15,000m2 in the city
of Piraeus, a commercial-industrial center 10km from the

heart of Athens, in a walking distance from Europe’s largest

passenger port. Pireas Plaza is planned to be a three-storey
commercial and entertainment center with 26,000m2 GLA
and will be served by four underground parking levels for

775 cars, easily accessed by a large catchment of more

than one million people.

PLAZA CENTERS N.V. ANNUAL REPORT 2013

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President and
Chief Executive
Ofﬁ cer’s
statement

Ran Shtarkman
President and Chief Executive Ofﬁ cer

I am pleased to report that we are making
good progress with the restructuring process
whilst continuing to leverage the ability and
expertise of our management team to enhance
the quality of our income generating assets
across all key parameters such as occupancy
levels, footfall and turnover.

Central and Eastern Europe economies are experiencing signs of

a change in sentiment, with Poland and the Czech Republic both

reporting increased investment activity in 2013. However, we have

seen marked differences between the countries north of the region,

which have proved more resilient, and the struggling southern

economies, including Romania and Bulgaria. It was as a result of

the sustained challenging market conditions, combined with the

lack of transactional liquidity in a number of the countries in which

we operate, that we took the decision in November to withhold

payments on the upcoming maturities of our outstanding corporate

bonds and suggest a restructuring plan to creditors.

• In October, a consortium of shareholders of Dream Island, in

which Plaza holds a 43.5% stake, completed the sale of its Dream

Island project land holding to the Hungarian State for circa €16.5

million (HUF 5 billion). The proceeds of the transaction were

used by the Consortium to repay a proportion of the securitised

related bank debt held against the asset. As a result of a previous

non-cash, market driven writedown, the asset was held on Plaza’s

balance sheet at the value of the loan, which was non-recourse so

no accounting loss was incurred in the 2013 ﬁ nancial statements.