London, UK, February 26, 2018—IFC, a
member of the World Bank Group, and EBRD are boosting the retail sector
in Serbia, Montenegro and FYR Macedonia with €164 million in loans to
the investment firm Hystead.
Hystead is a London-based company and an important investor in the Western
Balkans. It owns Delta City shopping malls in Belgrade and Podgorica as
well as Skopje City Mall. The company was established by Hyprop Investments
Limited, South African real estate investment trust (REIT) with a strong
track record of operating shopping malls together with its joint venture
partner PDI, a company associated with Louis Norval a non-executive director
of Hyprop Investments Limited.
The financial package includes a €60 million loan from the EBRD and a
€104 million loan from IFC. IFC’s financing includes a €60 million “A”
loan from IFC’s own account and a loan of €44 million from IFC’s Managed
Co-Lending Portfolio Program (MCPP). Funding for the loan under IFC’s
MCPP is provided by the People’s Bank of China.
The funds will refinance an existing loan and improve the company’s capital
structure. They will also support the expansion and upgrade of the three
Upgrades will focus on adopting international environmental and social
standards, implementing green building practices, efficient use of energy,
rational water and resource management, waste minimisation and recycling,
as well as the use of high-performing equipment and technologies. These
improvements will enable the company to certify the retail centres under
an international sustainability scheme. The retail centres in Skopje and
Podgorica will be the first ones in their respective countries to receive
such certification. Their example will pave the way to more sustainable
building management in the region.
In addition, Hystead is committed to creating opportunities for young people
and preparing them for the job market. The company is planning to partner
with local education institutions in the three countries to develop curricula
on sustainable building management.
Furthermore, IFC and EBRD loans will help Hystead develop as a platform
to attract future funding for retail property growth in the eastern Europe
In the Western Balkans region, local companies that operate income-generating
commercial property have not been able to access international capital
markets to fund their growth. Such companies have not yet been structured
as REITs and lacked the scale, diversification, and standards required
by international and regional institutional investors.
With the help of IFC and EBRD financing, Hystead, a REIT focused on retail
property assets in the region, will address these challenges. Hystead intends
to aggregate a diversified portfolio of quality income-generating commercial
properties with the scale, standards and diversification needed to attract
institutional investors seeking property exposure in the region.
Hystead CEO Alex Papageorgiou says: “We are pleased to partner with the
EBRD and IFC and their loan is testament to the quality of Hystead’s portfolio
and asset management expertise. We strive to create value for stakeholders,
while balancing our impact on the environment and the communities in which
we operate; this is evident through our planned commitment to sustainable
building management and youth development programmes.”
Phil Bennett, EBRD First Vice President, said: “We in particular applaud
the company’s commitment to offering greater training and job opportunities
to young people. Sustainable management of buildings is a complex, interdisciplinary
area and on-the-job learning is crucial for those who seek a career in
real estate project planning and management with focus on environment.
Hystead is a great example of foreign investment bringing know-how, creating
jobs and boosting the regional economy.”
“This is IFC’s third capital markets-focused investment in commercial
property in the eastern Europe region in the last 18 months. It’s an exciting
time for IFC, as we find innovative ways to support the property sector,”
said Lukas Casey, IFC Manager for Manufacturing and Services for the Europe,
Middle East and North Africa regions. “We are very pleased to support
skills training, retail infrastructure, green buildings, south-south investments
and attracting commercial capital to the region.”
Supporting job-generating foreign direct investment in the Balkans countries
is among the priorities of both the EBRD and IFC.
IFC—a sister organisation of the World Bank and member of the World Bank
Group—is the largest global development institution focused on the private
sector in emerging markets. We work with more than 2,000 businesses worldwide,
using our capital, expertise and influence to create markets and opportunities
in the toughest areas of the world. In the financial year 2017, we delivered
a record US$ 19.3 billion in long-term financing for developing countries,
leveraging the power of the private sector to help end poverty and boost
shared prosperity. For more information, visit www.ifc.org
About the EBRD
The EBRD is a multilateral bank committed to the development of market-oriented
economies and the promotion of private and entrepreneurial initiative in
more than 30 countries from Morocco to Mongolia and from Estonia to Egypt.
The Bank is owned by 66 countries, the EU and the EIB. The EBRD’s strategic
plan for the countries where it invests for the period 2016-18 has three
priorities: strengthening economic resilience, addressing global challenges
and supporting regional integration. In 2017, the EBRD’s total annual
financing across all economic sectors rose to a new record of €9.7 billion.
The number of individual EBRD projects in 2017 rose to a new high of 412.
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