Atrium European Real Estate Limited announces its results for 2017. The company is focusing on owning quality assets in well-connected, strong, urban locations in the region's largest and strongest economies. 20 smaller assets were sold during 2017 and early 2018 for €80 million, with the effective exit from Hungary and the Czech portfolio rotation completed.
Asset sales focused the portfolio on 40 larger, more dominant shopping centres, 16 of which are over 30,000 sqm. Average asset value and size have now increased to €64.5 million (2016: €43.9 million) and 25,000 sqm (2016: 18,900 sqm).
A portfolio rotation has been completed in the Czech Republic with disposals in September 2017 and February 2018, respectively, of a development site and a shopping centre gallery in Brno for a total of €23.7 million.
The company completed its effective exit from Hungary through the sales in December 2017 and early 2018 of 13 Penny leased supermarkets for €11.1 million and a portfolio of assets for €44.8 million.
These disposals were made at approx. an 8% premium to the book value as at 30 September 2017. The €4.9 million gain on assets sold in the Czech Republic and in Hungary was offset by €15.1 million non-cash currency translation reserve loss resulting in a €10.2 million net disposals loss in 2017.
Upgrades, redevelopment and extensions
Atrium extended its redevelopment and extension pipeline to €330 million of which €88 million had been spent cumulatively by the end of 2017. In total, this will add 70,000 sqm of GLA, including 60,000 sqm in Warsaw.
The redevelopments aim to improve portfolio quality and drive rental growth and are focused on four of our largest assets comprising Atrium Promenada, Atrium Targowek and Atrium Reduta in Warsaw, together with Atrium Biala in Bialystok.
Commenting on the results, Liad Barzilai, Group CEO, said: "Over the course of the year and into 2018 we have significantly progressed with our portfolio repositioning programmes, having continued our sales of non-core assets and effectively exited Hungary. As a result, our portfolio continues to be concentrated towards larger, higher quality shopping centres that are most relevant to today's omni-channel shopping environment and offer our customers a variety of leisure, retail and entertainment experiences. We believe there is still more to come as we continue to identify opportunities to make improvements to our existing assets, with further redevelopment and extension projects. Our €330 million redevelopments pipeline will add over 70,000 sqm of GLA to Atrium's portfolio and 29,600 sqm by the end of 2018 in Warsaw.”