European developer to co-launch $400m US opportunity fund

Central and Eastern European developer Plaza Centers is to co-invest $100m in a fund to be managed by Elbit Partners USA aimed at taking advantage of the “current dislocation in the US financing and real estate markets”.

Plaza Centers, the London-listed developer traditionally focused on Eastern and Central Europe, is aiming to capitalise on the “current dislocation” in US real estate prices by committing equity to a $400m opportunity fund.

Plaza, a subsidiary of Tel-Aviv-listed real estate investment firm Elbit Imagining, is to commit $100 million alongside its parent company to the five-to-seven year fund. The fund will be managed by a joint venture company between Plaza and Elbit and Eastgate Property, an affiliate of New York-based real estate and private equity firm NCH Capital. Eastgate will also commit $100 million to the vehicle with the remainder to be raised from institutional investors.

It will predominately invest in the retail sector, an area in which Plaza has built a reputation as developer in Europe, either directly or via joint ventures with “local business partners” and over a two year period. With leverage, the joint venture plans to have $1 billion to invest.

Plaza, which owned more than €1 billion of assets across countries including Poland, Bulgaria, Czech Republic and Romania according to its first half 2009 report released at the end of June last year, is yet to invest significantly outside of Europe, although it has launched an investment platform in India.

Ran Shtarkman, president and chief executive officer of Plaza Centers said: “We firmly believe the new fund will be ideally placed to take advantage of the current dislocation in the US financing and real estate markets. We currently have an opportunity to acquire high quality operating properties at very attractive valuations not seen in the recent past, with potential for significant appreciations.”

Both Plaza, Elbit and Eastgate will asset manage the investments made by the fund, which will be led by Alex Berman who will assume the role of chief executive of Elbit Plaza USA.