ECM Real Estate Investments, a Czech firm that usually operates in Central and Eastern Europe, has acquired a retail shopping center under development in China via forward purchase for $160 million (€119 million), with an option to acquire an adjacent office building currently under development.
ECM said a quarter of the deal cost would come from equity, with the remainder sourced through mezzanine and senior funding.
The retail shopping center, ‘Globe Plaza,’ and office building, ‘Metropolis Tower,’ will be developed jointly with Beijing Science Park Development, which has already committed to the development and construction of the Zhongguancun Science Park. It is expected that BSPD will retain ownership of the hotel and serviced apartments.
Milan Janku, ECM’s President and Chairman of the Board, says he expects these two investment projects to bring an expected blended IRR of 25 percent. The center is scheduled for shell and core completion in May 2008, with its grand opening by January 2009. The project has a market value based on an external independent appraisal of approximately $220 million (€163 million), according to the firm.
The ‘Metropolis Tower’ office project is scheduled for final completion in May 2009 but ECM’s option to acquire the project will expire in late October 2007.
ECM began its investing in the Czech Market in 1991 and today focuses its activities on real estate development in the Czech Republic and Russia. In December 2006 shares of ECM were listed on the Prague Stock Exchange. As of March the ECM portfolio consisted of 17 development projects and four investment projects.