Hystead Limited

completed

IFC proposes to provide an A Loan of up to EUR60 million and syndicate a Parallel Loan of up to EUR45 million (Senior Loans) through the managed co-lending portfolio program (MCPP), to support the EUR329.9 million expansion of Hyprop (“Hyprop” or the “Group”) a South African Real Estate Investment Trust (JSE: HYP) and PDI Investments Limited (PDI), a Mauritius incorporated investment vehicle with Homestead Group (BVI), as its majority shareholder, into Central and Eastern Europe (“CEE”) through the 100% acquisition of three shopping malls in Belgrade, Serbia; Podgorica, Montenegro; and Skopje, FYR Macedonia (“the Malls”) and the related upgrades and/or expansion of these existing malls (the “Project”). The Senior Loans will be provided to Preduzece Delta City 67 D.O.O Beograd, Delta M CG Podgorica D.O.O Montenegro and Balfin MK Dooel Skopje (jointly the Companies). Hyprop operates a portfolio of shopping centers across Sub-Saharan Africa and more recently, CEE. In December 2015, Hyprop and PDI established Hystead Limited (“Hystead” or “Company”), a UK private limited company for acquisition, management and development of its CEE assets. Hysead is held 60% by Hyprop and 40% by PDI. Hystead is expected to list on the Luxembourg Stock Exchange and Johannesburg Stock Exchange by the end of 2017, where it will target pension funds and other financial investors seeking exposure to income-generating commercial property in the CEE. Proceeds from the IPO will be used to recapitalize the balance sheets of Hystead and its subsidiaries and this is expected to position Hystead for sustainable growth. To date Hystead has acquired [four] shopping malls: (i) Delta City shopping mall with Gross Leasable Area (GLA) of 23,718 m2, Podgorica, Montenegro; (ii) Delta City shopping mall with GLA of 29,876 m2, Belgrade, Serbia; and (iii) Skopje City shopping mall with GLA of 36,999 m2, Skopje, FYR Macedonia and [more recently] (iv) The shopping mall with GLA of approximately 52,000 sqm in Sofia, Bulgaria (not financed by IFC). The malls are modern shopping centers in the relevant cities. They are two to three levels above ground, and include shopping area, supermarket, food court, parking lot and entertainment (e.g. cinemas). Delta City mall in Podgorica plans to expand on the adjacent land plot by constructing additional 9,000 m2 of GLA and 9,000 m2 of parking space. The Skopje and Belgrade shopping malls plan increase their GLA by optimizing the use of existing space through filling some of the voids in the shopping area. No major construction is expected.