Linstow Varner Retail

completed

The Project involves the expansion of Linstow Varner’s retail operations in Latvia through extensions to an existing retail center and the development of two new “retail park” concepts.During the past 4 years, Linstow Varner purchased, renovated and started operating four retail centers in Riga (“Centrs”, “Dole”, “Mols” and “Purvciems”). In addition, the Company has acquired/leased two prime properties (“Alfa” and “Riga Railway Station”), which are being developed into retail parks and represent part of the Project. As of year-end 2000, the total value of the Company’s investments was around US$80 million, covering approximately 29,000 square meters of floor space. To improve the operations and competitiveness of the malls, the Company now plans to expand one of the smaller malls (Mols) to more efficient scale, and develop the two new properties (Alfa and the Riga Railway Station) with new retail concepts. The Project would create 100,000 square meter of new retail space within the next three years.The rationale for investing in shopping centers in Latvia is based on the need for modernizing the retail sector in this transitioning economy. In particular, metropolitan Riga with a population of 900,000, does not have adequate retail floor space to serve the growing and the changing needs of the local shoppers. The long-term goal of Linstow Varner is to be a leading shopping center operator in the Baltic region. Riga is the largest and most centrally located city in the Baltic. It also represents a gateway to the East and LV believes that a strong market position in Latvia can be used as a starting platform for expansion into Lithuania and Estonia, as well as into Russia, Belarus, and Ukraine.The Project involves redevelopment of an old and abandoned industrial site (the Alfa “Retail Park”), renovation of buildings within UNESCO World Heritage List area (the Riga Railway Station “Travel Mall”), promotion of public/private partnership in renovating and improving the old Riga Central Railway Station, and resolving traffic problems congesting the Railway Station square.