Atrium European Real Estate Limited, an owner and manager of shopping centres and retail real estate in Central and Eastern Europe, has announced its results for the second quarter and six months ended 30 June 2016.
Profit before taxation was €63.7m compared to a loss of €4.8m in the first half of 2015 with the increase primarily driven by a €13.6m revaluation in the core markets (compared to a €36.7m devaluation during the same period last year due to the Russian portfolio) and a €11.3m decrease in finance expenses. EBITDA, excluding revaluation and disposals, was €76.1m (6M 2015: 81.3m), mainly as result of lower income in Russia.
The value of Group's portfolio of 62 standing investments stood at €2.6 billion (31 December 2015: 77; €2.7 billion).
Portfolio repositioning highlights:
- In March 2016, the first extension in stage one of the Atrium Promenada extension and redevelopment in Warsaw, Poland, was completed.
- In May 2016, the Board of Directors approved the second stage of Atrium Promenada which has an estimated cost of €51m and comprises a remodelling and renovation of an additional part of the shopping centre.
- The Board has also approved in May the first phase of a 9,000 sqm GLA extension to Atrium Targowek in Warsaw. This initial phase, which precedes construction of the main extension, is expected to cost around €11m and will comprise land assembly, project design and the construction of additional parking.
Acquisitions and sales:
- In February 2016 the company completed the sale of a portfolio of ten retail assets in the Czech Republic for a consideration of €102.6m, reflecting an 8% premium to fair value prior to the receipt of initial offers.
- In April 2016, the Group signed a framework agreement for the sale of a wholly owned subsidiary which owns two land plots in Pushkino, Russia, for a consideration of €10m.
- In May 2016, the Group acquired the 46.5% co-ownership share of the Zilina Duben Shopping Centre in Slovakia for a total consideration of €7m, giving it full ownership of the asset .
- In June 2016, the Group completed the sale of three Polish assets with a total lettable area of approximately 15,700 sqm for a total consideration of €17.5m.
- In July 2016, the Group signed a preliminary sale agreement for the sale of Atrium Azur in Latvia for a total value of €12.5m. The sale is expected to be completed in the fourth quarter of the year.
Commenting on the results, Josip Kardun, Group CEO, said: "During the first half we continued with our portfolio repositioning strategy and the progress we have made in this regard is reflected in the positive performance across our overall portfolio excluding Russia. Against the backdrop of economic growth, robust consumer spending and investor demand in our core markets, we will continue to make selective asset sales and undertake acquisitions, if the price and opportunity are compelling. We will also increase our focus on upgrading the existing assets in our portfolio and have identified a number of shopping centres where we believe a significant investment and modernisation will enhance their value and performance over the long term."