Real estate investment group GTC, registered in Poland but operating in three other capitals in the region, announced on April 27 it has acquired Mall of Sofia in Bulgaria – one of the most successful shopping malls located in the country. Europa Capital, the seller, confirmed the deal on the same day.

“The acquisition of Mall of Sofia was an excellent opportunity to buy a stable cash-flow generating building, at the heart of Sofia,” Thomas Kurzmann, GTC’s CEO, said in a statement. “This acquisition will appreciate value by taking advantage of fast-growing customer spending power and is another step in reaching our mid to longer term NAV growth targets.” 

Europa Capital (a member of the Rockefeller Group) took over the Mall of Sofia in 2011, reportedly for €100mn. At that time, the Irish Times reported that the sale had generated a gain of more than €20mn to be shared equally by Avestus Capital Partners and Irish GE Real Estate.

The terms of the GTC-Europa Capital deal were only partly disclosed, but its value is understood to have been close to €100mn. Judging from the current €7.55mn annual net operating income (as revealed by GTC), the exit was successful.

To facilitate a high FFO yield from the asset, GTC (through the acquired subsidiary) has obtained an attractive loan facility from a consortium of OTP and DSK banks, GTC explained.

OTP and DSK banks will finance 65% of the acquisition price, GTC disclosed.GTC says that “through the acquisition of €7.55mn in-place NOI [net operating income] with less than €30mn equity, GTC will improve its profitability[…]”. 

Mall of Sofia is a prime commercial property in the Central Business District of Sofia providing 23,700 sq. m GLA of retail space and 10,300 sq m of office space and more than 600 underground parking places.

The retail occupancy rate is currently at 98% and office occupancy rate is 100%. Anchor retail tenants include Billa, H&M Fashion, Benetton, Terranova, Technomarket, McDonald's, KFC and Cinema City. Office tenants include Deloitte and Quintiles.