Hystead acquires Bulgarian shopping mall owner AP Retail for €156m


UK-based investment company Hystead has acquired Bulgarian shopping centre operator AP Retail for €156m.

Hystead is co-owned by Hyprop Investments (Hyprop) and PDI Investment Holdings (PDI), a company represented by Louis Norval. Hyprop has a 60% interest and the remaining 40% is held by PDI.

Subject to approval by the Bulgarian competition authority, the deal is Hystead’s fourth acquisition in South-East Europe, with the combined gross value of the deals amounting to €460m.

"Our ultimate intention is to dual-list Hystead and we believe this acquisition will add substantial critical mass to our portfolio."

Hyprop CEO Pieter Prinsloo said: "The acquisition ties in with our objective of owning a high-quality shopping centre portfolio in South-Eastern Europe and The Mall meets our strategic investment requirements in terms of quality, tenant mix, location in a capital city and dominance in the market.

"Our ultimate intention is to dual-list Hystead and we believe this acquisition will add substantial critical mass to our portfolio.

“We expect this investment to enhance Hyprop’s future income distributions."

Marking Hystead’s first acquisition in an EU member state, the agreement is expected to improve the overall quality of the fund’s portfolio.

Hystead owns the Mall, which is regarded as one of the best shopping centres in Bulgaria. It has 52,000m² of gross lettable area (GLA), with around 200 tenants.

The tenants include the Inditex Group (Zara and four other brands), Peek & Cloppenburg, H&M, Reserved, LC Waikiki, Arena Cinemas, Cortefiel Group (three brands), Starbucks, Intersport, Technopolis, New Yorker, CCC, Mango and Deichmann.

The Mall is currently 99.7% leased and connects the city centre with the Trakia Highway, leading towards the centre of the country.

AP Retail recently signed an agreement for exclusive rights to acquire the vacant and separately owned hypermarket space, formerly occupied by Carrefour, which forms part of the complex.

If exercised, the right would allow The Mall to execute a major refurbishment of the area, which will add 14,000m² of GLA and increase the total size of the shopping centre to 66,000m².

The refurbished mall will include more than 30 new stores, anchored by a supermarket of up to 4,000m² and new market entries for international retailers.

The company noted that discussions with potential tenants have already been held and are at an advanced stage, with retailer interest exceeding the available GLA.

Hyprop’s strategy for South-East Europe is to acquire leading shopping centres via Hystead.