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Citi, Gazit close €800m Meinl deal

Citi Property Investors and Gazit-Globe have finalized their deal to invest in listed European developer Meinl European Land. Meinl will now be known as Atrium European Real Estate targeting the retail real estate markets of Central and Eastern Europe.

Citi Property Investors and international development firm Gazit-Globe have closed a deal to invest €800 million ($1.2 billion) in Vienna-listed European developer Meinl European Land.

The deal follows an extraordinary general meeting of Meinl investors last month during which shareholders approved the cash injection by Citi and Gazit. Meinl will now be known as Atrium European Real Estate and will target the retail real estate markets of Central and Eastern Europe.

According to a statement from Gazit yesterday, Atrium has more than 160 properties across the Central and Eastern European region, with 34 properties under development and redevelopment. It also owns a land bank of 11 parcels of land with more than 1.9 million square meters of developable land. Listed on the Vienna Stock Exchange, the company’s market capitalization is around €1.8 billion.

As part of the deal, Citi and Gazit – through joint venture vehicle, CPI/Gazit Holdings Limited – have invested €800 million in Atrium, comprising €500 million of convertible securities and a €300 million rights issue to Atrium shareholders, which will be completed within six months.

Chaim Katzman, chairman of Gazit-Globe, said the Central and Eastern European region posed a “significant opportunity” for Gazit and Citi, particularly in the retail sector.

The deal follows a surprise share buyback by Meinl last August. The decision to buy back 17 percent of its shares for €1.1 billion was done without shareholder approval and led to a loss of credibility and concerns about governance. The action sparked a strategic review of the company.

CPI, the property investment arm of Citi Alternative Investments, currently manages more than $13.5 billion in real estate assets globally. In June, Roger Orf was promoted to CPI president and chief executive officer following the departure of Joe Azrack. Azrack left to “pursue an entrepreneurial career opportunity,” according to the firm. At the time of the announcement, CPI said Orf would be based in London but also spend a “considerable” time at the firm’s New York headquarters.