News Article EPP investment Poland Redefine retail stock exchange
by Property Forum | Investment

On March 8th 2022, EPP was delisted from the Johannesburg and Luxembourg stock exchanges with the support of the vast majority of the company's shareholders. The new owner of EPP is Redefine Properties, the second-largest Real Estate Investment Trust (REIT) listed on the Johannesburg Stock Exchange. There have also been changes in the EPP portfolio. The company has sold part of the assets by establishing two joint ventures and signed preliminary sale agreements for the Towarowa 22 and Power Park Opole projects.

The company's decision to delist its shares and reorganise its portfolio by selling a significant part of its assets was influenced primarily by the two-year pandemic and related temporary restrictions on operations, which were particularly severe for the shopping centre industry in Poland. Regulations introduced by a special law act, exempting shopping centres’ tenants from the obligation to pay rents and service charges during the lockdown periods, had an impact on the company’s financial situation. Rental revenues were significantly reduced, and at the same time, credit obligations accumulated that the company has to settle.

“Our shareholders supported with a large majority the proposal to delist EPP and reorganise the company's portfolio. It was not an easy decision, but in the current situation, it was unavoidable. The proposed changes in the portfolio enabled us to raise funds for the repayment of credit liabilities while keeping the management of the majority of our assets in our hands. As a result, our first-class team and the market position in Poland have not changed," said Tomasz Trzósło, CEO of EPP.

“The measures we have taken, strengthen the company’s financial standing and allow us to repay part of the obligations under the loan agreements, which will have a positive impact on our debt ratios. Thus secured, we can fully concentrate on operations and develop in the future," said Jacek Bagiński, CFO of EPP.

As part of the reorganisation process, EPP entered into preliminary agreements for the sale of Towarowa 22 and Power Park Opole projects and sold about 50% of its portfolio by creating two joint ventures: Horse JV* and Community Properties JV**. The first covers nine M1 shopping centres and two retail parks. The second includes eleven retail properties and three office complexes. Within the established JVs, EPP is responsible for the overall management of the properties including property management, leasing and financing of the facilities. After completing the sale of Towarowa 22 and Power Park Opole, aside from the newly established JVs, six shopping centres and retail parks will remain in EPP's ownership: Galeria Echo, Pasaż Grunwaldzki, Galaxy, King Cross Marcelin, Outlet Park Szczecin and Power Park Olsztyn. EPP thus remains the largest asset manager of retail real estate located in Poland in terms of GLA.